New regulations on lottery business, Vietlott

The Government has just issued Decree No. 122/2017/ND-CP, which stipulates a number of specific contents on financial management mechanisms and performance evaluation for lottery businesses.

The Decree stipulates that lottery businesses are only allowed to invest outside in industries directly related to lottery business activities. Revenue of lottery businesses includes revenue from business activities of permitted lottery types, revenue from other business activities, revenue from financial activities as prescribed by law and other income.

For the cumulative prizes of computerized lottery products, if the prize-claiming period expires and the winner does not come to claim the prize, the lottery business enterprise is allowed to operate computerized lottery and account it as other income of the enterprise.

Lottery businesses are allowed to deduct certain specific expenses when calculating corporate income tax, such as prize payment expenses; commissions for lottery agents; authorization expenses for prize payment to winning customers; lottery drawing expenses and expenses for supervision by the Lottery Supervisory Council; expenses to support the work of preventing lottery numbers and making fake lottery tickets; expenses for setting up a reserve fund for prize payment risks; expenses for lottery tickets; expenses for information on lottery tickets and drawing and drawing prizes, and prize results; expenses for contributing to the activities of the Regional Lottery Council.

People buy lottery tickets.

Regarding prize payment costs, Decree No. 122/2017/ND-CP stipulates that prize payment costs for traditional lottery, manual lotto and instant lottery are the actual amount paid to winners for winning lottery tickets according to the provisions of law.

Particularly for the traditional lottery type issued under the joint issuance mechanism, the prize payment cost includes the actual prize payment cost paid for winning lottery tickets under the self-payment responsibility of the lottery business enterprise according to the regulations in the Regulations on the operation of the Regional Lottery Council; The actual prize payment cost paid is allocated to the lottery business enterprise according to the allocation ratio for winning lottery tickets under the common payment responsibility of the Council as specifically stipulated in the Regulations on the operation of the Regional Lottery Council.

The prize payment cost for the computerized lottery type is the actual amount paid to the winners for winning lottery tickets and the value of accumulated unwon prizes transferred to the next drawing period as specifically stipulated in the Participation Rules according to the provisions of the law on lottery.

Vietlott's obligations

In addition, Decree No. 122/2017/ND-CP also clearly stipulates the determination of actual revenue from business activities of Vietlott's computerized lottery products in each province and centrally run city.

Specifically, Decree No. 122/2017/ND-CP stipulates that, for the method of distributing computerized lottery tickets through terminal devices: Revenue from computerized lottery business activities arising from terminals registered to sell computerized lottery tickets within the administrative boundaries of each province or centrally-run city according to the lottery agency contract signed with Vietlott or the stores and ticket sales points established by the enterprise in the area.

For the method of distributing computerized lottery tickets via phone and internet, revenue is determined according to the location where the customer registers to participate in the lottery when opening a lottery account according to the provisions of law on computerized lottery business.

The Decree stipulates that lottery businesses are only allowed to invest abroad in industries directly related to lottery business activities.

Vietlott is responsible for declaring and settling value added tax, special consumption tax and corporate income tax at its headquarters. Based on the amount of tax payable for each tax, Vietlott allocates the tax payable to the local budget according to the actual revenue generated in each locality.

At the same time, deduct, declare and settle the personal income tax payable at the head office. Vietlott allocates the personal income tax payable to the local budget according to the provisions of law, specifically as follows:

Personal income tax on commissions paid to computerized lottery agents is distributed according to each province or centrally run city where the computerized lottery agent generates taxable income; personal income tax on winners is distributed according to the province or centrally run city where the individual registers to participate in the prize for distribution methods via telephone or internet and the place where computerized lottery tickets are issued for distribution methods via terminal devices.

In case the remaining profit after corporate income tax is paid to the local budget as prescribed in Clause 1, Article 7 of this Decree, Vietlott shall declare at the head office and allocate to the local budget according to the actual revenue generated in each province or centrally run city.

According to Hanoi Moi Newspaper