Latest guidance on assessment of operations of valuation enterprises in Vietnam

Latest guidance on assessment of operations of valuation enterprises in Vietnam (Internet image)

On May 16, 2024, the Minister of Finance issued Circular 38/2024/TT-BTC on prescribing assessment of operations of valuation enterprises; establishment of provisions for professional risks, operational reporting by valuation enterprises, and costs associated with valuation operations of valuation councils in Vietnam.

Latest guidance on assessment of operations of valuation enterprises in Vietnam

Article 3 of Circular 38/2024/TT-BTC stipulates the assessment of operations of valuation enterprises in Vietnam as follows:

* Contents of assessment

- Maintenance of fulfillment of eligibility requirements to provide valuation services;

- Compliance with regulations of law on valuation and fulfillment of obligations of valuation enterprises;

- Cooperation in formulating and organizing the implementation of legislative documents on prices and valuation with the Ministry of Finance of Vietnam that plays the leading role in performing such tasks;

- Cooperation in performing international cooperation tasks;

- Cooperation in performing state management of prices and valuation with Ministries, central-government authorities and local governments;

- Cooperation in doing scientific researches in the field of valuation.

* Assessment period: from January 01 to December 31 of the year preceding the year in which the assessment is carried out.

During the period from April 15 to the end of May 31 of each year, the Department of Price Management shall carry out assessment of operations of the valuation enterprises that meet all of the following conditions:

- Have been issued with certificate of eligibility to provide valuation services before the assessment period;

- Have fulfilled eligibility requirements to be satisfied by valuation enterprises for at least 06 months in the assessment period;

- Have fulfilled eligibility requirements to be satisfied by valuation enterprises during the period in which the assessment is carried out.

Valuation enterprises shall submit the reports prescribed in point a clause 1 Article 5 of Circular 38/2024/TT-BTC which shall be then used as the basis for assessment of their operations.

* The assessment shall be carried out by scoring assessment contents on the basis of the following information:

- Information/data in the reports prescribed in Point a Clause 1 Article 5 of Circular 38/2024/TT-BTC;

- Information/data obtained during the performance of state management of valuation in respect of valuation enterprises and valuers;

- Information received from Ministries, central-government authorities, local governments, and other organizations and individuals (if any).

* Each assessment content shall be considered a criterion comprising a set of subcriteria given specific scores (see Appendix I enclosed with Circular 38/2024/TT-BTC).

Appendix I

* The purpose of an assessment is to improve the operational quality of the assessed valuation enterprise. Assessment results will be published by the Department of Price Management on the website of the Ministry of Finance of Vietnam before June 30 each year. Assessment results do not reflect the quality of specific valuation certificates or valuation reports issued or made by valuers or valuation enterprises.

Clause 1, Article 5 of Circular 38/2024/TT-BTC stipulates the periodic reporting regime on valuation activities of valuation enterprises in Vietnam as follows: - Within the period from January 01 to March 31 each year, each valuation enterprise shall make a periodic report on its current status and certain valuation criteria using the form in Appendix II enclosed with Circular 38/2024/TT-BTC. The report includes data collected from January 01 to December 31 of the year preceding the year in which the report is submitted. Such a report must be submitted by March 31 of the year preceding the year in which the report is submitted. Appendix II - After December 15 each year, each valuation enterprise shall make a periodic report on the list of its valuers using the form in Appendix III enclosed herewith. The report includes data collected until December 15 of the reporting year. Such a report must be submitted by December 20 of the reporting year.

More details can be found in Circular 38/2024/TT-BTC, which comes into force from July 1, 2024.

To Quoc Trinh

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