Can Debt And Asset Trading Corporation use money from debt collection, debt and asset settlement in Vietnam?

Can Debt And Asset Trading Corporation use money from debt collection, debt and asset settlement in Vietnam?

Pursuant to Article 9 of Circular 07/2022/TT-BTC stipulating the use of proceeds from collection and settlement of debts and assets as follows:

1. Debt And Asset Trading Corporation shall manage the proceeds from recovery, handle the received debts and excluded assets according to the provisions of the Charter, Financial Regulations of the Company and the following regulations:

a) Deduct 30% of the amount from debt recovery and sale of received assets, receive compensation for assets on land upon land recovery, and leave it for the Debt And Asset Trading Corporation to use to cover related expenses such as: receiving, organizing the recovery, management, exploitation and handling of debts and assets (including costs of destruction and dismantling of assets), valuation, other related auction and other costs.

b) Deduct 10% of the proceeds from debt recovery and handling of received assets to transfer and return to the enterprise in order to cover expenses for management, property keeping, debt collection, coordination and support to receive compensation for assets on land upon land recovery.

In case the property is put into operation (share capital contribution, joint venture, association, lease), the cost of keeping the property shall be paid according to the actual date from the date of signing the handover minutes, but not exceeding 10% of the appraised value of the organization with the valuation function when the property is put into operation.

2. For receipt and handling of debts and assets as designated by the Government or the Prime Minister:

a) In case the revenue from the settlement of debts and assets as designated is not enough to cover the costs of debt and asset recovery and handling, the Debt And Asset Trading Corporation shall report to the representative agency of the owner of the organization that has the debt and the transferred assets for consideration and handling according to its competence or report to the Government or the Prime Minister for decision in case of exceeding the authority of the representative agency of the owner.

b) In case the Debt And Asset Trading Corporation receives the property as designated for handling and recovery for the State, it is entitled to a property handling fee under the guidance of the Ministry of Finance on a case-by-case basis on the principle of fully covering the cost of handling the property plus (+) a part of the management cost.

3. The remaining amount after deducting the expenditures specified in Clauses 1 and 2 of this Article shall be remitted to the state budget according to the provisions of Decree No. 148/2021/ND-CP.

In case the payable amount is under VND 100 million each time it is incurred, the Debt And Asset Trading Corporation collects and pays monthly (within 05 working days from the end of the preceding month).

Thus, the Debt And Asset Trading Corporation is allowed to use money from the collection and settlement of debts and assets for the above purposes in Vietnam.

What is handling of proceeds from collection, debt and asset settlement before handing over to Debt And Asset Trading Corporation in Vietnam?

Pursuant to Article 10 of Circular 07/2022/TT-BTC stipulating handling of proceeds from collection, debt and asset settlement before handing over to Debt And Asset Trading Corporation as follows:

1. For the proceeds from debt collection and disposal, except before handing over to the Debt And Asset Trading Corporation, the enterprise or public non-business unit is responsible for submitting it to the Debt And Asset Trading Corporation within 05 working days from the date of collection. In there:

a) In case of late payment to the Debt And Asset Trading Corporation, the enterprise or public non-business unit must additionally bear interest on late payment for the entire amount mentioned above. The interest on late payment shall comply with the provisions of Clause 3, Article 8 of this Circular.

In case there is a court decision on the payment obligation to the Debt And Asset Trading Corporation (including late payment principal and interest), the enterprise or public non-business unit shall comply with the court's decision and shall not be entitled to offset expenses as prescribed in Clause 1, Article 9 of this Circular.

b) Fines for late payment specified at Point a of this Clause are not included in reasonable expenses when calculating corporate income tax; Enterprises may only use profits after corporate income tax to compensate after deducting compensations from collectives and individuals related to late payment (if any).

2. For the proceeds from debt recovery and disposal of assets excluded under court decisions, the judgment enforcement agency shall, based on the actual recovered amount, submit it to the Debt And Asset Trading Corporation within 05 working days from the date of collection. In case of late payment, enterprises and public non-business units must bear additional interest on late payment as prescribed in Clause 1 of this Article.

3. In case the enterprise or public non-business unit fully pays the principal (including the collection of debts and handling the property before handing over) within 12 months from the date the enterprise commits to pay off the principal, the Debt And Asset Trading Corporation considers and cancels the late payment interest (including late payment interest in case of court decision) after the enterprise has fully paid off the principal as committed.

4. For enterprises and organizations with debts that have ceased to operate or are dissolved or gone bankrupt, after receiving the certification of competent authorities and the Court's bankruptcy decision, the Debt And Asset Trading Corporation shall monitor off the balance sheet the proceeds from debt recovery and disposal and excluded assets before handing over to the Debt And Asset Trading Corporation and handle them in accordance with Clause 9 Article 7 of this Circular. In case the Court's decision determines that the bankrupt debtor enterprise or organization is unable to repay the debt to the Debt And Asset Trading Corporation, the Debt And Asset Trading Corporation is excluded from continuing to track on the books of the irrecoverable value.

5. In case an enterprise or public non-business unit collects money from debt recovery and disposal of excluded assets within the period from the time of determining the value of the enterprise or public non-business unit to the date the owner's representative agency announces the value of the enterprise or public non-business unit, the enterprise shall submit it to the Debt And Asset Trading Corporation within 15 working days from the date on which the enterprise or public service agency declares the value of the enterprise or public non-business unit. In case of late payment, enterprises and public non-business units must bear additional interest as prescribed in Clause 1 of this Article.

In the above case in Vietnam, your company is allowed to use 10% of the amount of debt collection and settlement of received assets to pay the costs of the Debt And Asset Trading Corporation.

Best regards!