Decree of the Government of the Czechoslovak Socialist Republic No. 139 / 1971 Coll.

Q: Is Decree of the Government of the Czechoslovak Socialist Republic No. 139 / 1971 Coll. still valid?

Yes, Decree of the Government of the Czechoslovak Socialist Republic No. 139 / 1971 Coll. is still valid and effective.

139

GOVERNMENT REGULATION

Czechoslovak Socialist Republic

of 18 November 1971

on the financial management of state economic and certain other socialist organisations

The Government of the Czechoslovak Socialist Republic hereby orders pursuant to § 391 of the Economic Code No. 109 / 1964 Coll., as amended by Act No. 138 / 1970 Coll., pursuant to § 30 of Act No. 53 / 1966 Coll., on the Protection of the Agricultural Soil Fund and on the Implementation of Act No. 134 / 1970 Coll., on the Rules of the State Budget of the Czechoslovak Federation and on the Principles of the Management of State Budget Funds of the Federation and Republics (Budget Rules) and Act No. 111 / 1971 Coll., on contributions to the State Budget and Social Security Contribution:

Preliminary provisions

§ 1

Financial management is part of a system of planned management of the economy. Financial plans, financial economic instruments *) and the principles of financial management are active in drawing up the State Plan and the Economic Plans for their effectiveness, ensuring its implementation after the Plan has been established and responding to deviations arising during the implementation of the Plan. Financial management is organised in such a way as to co-create a material interest in good management results.

§ 2

(1) The provisions of Part One apply to state economic organisations with industrial, construction and mainly commercial activities, to foreign trade organisations with the exception of cooperative foreign trade undertakings and to state economic organisations whose financial management is not governed by the provisions of Part Two to the fourth.

(2) The provisions of Part Two apply to state economic organisations under the responsibility of the ministries of agriculture and nutrition in the agricultural sector with the exceptions provided for in Section 33 (2).

(3) The provisions of Part Three shall apply to State economic organisations whose relationship to the State budget is determined by a financing plan.

(4) The provisions of Part Four apply to state economic organisations governed by national committees.

(5) The provisions of Part Five shall be governed by the ministries, other central government bodies of the Federation and of the Republics ("central authorities'), the State Economic Organisation and the organisation of external trade, with the exception of cooperative foreign trade undertakings.

(6) The provisions of Part Six shall be governed by all economic management bodies and all socialist organisations.

(7) The management method of the organisation shall be governed by the provisions applicable to its main activity, unless otherwise specified. In the cases at issue, the competent Ministry of Finance shall determine which provisions of Part One to Part Four apply to the organisation concerned.

§ 3

(1) Economic management bodies for the purposes of this Regulation are central authorities, the Directorate-General (hereinafter referred to as the Directorate-General) and national committees.

(2) For the purposes of this Regulation, an economic unit shall mean a branch undertaking with associated national undertakings and special purpose vehicles or a trust of undertakings consisting of a branch office and subordinate national undertakings and special purpose vehicles. A trade firm without associated national enterprises and special purpose vehicles shall be considered as a production economic unit only in terms of stage of planning; create only corporate funds and technical development sectoral fund.

(3) For the purposes of this Regulation, the Directorate-General for Production of the Economic Unit shall be the Directorate-General for Trade.

(4) For the purposes of this Regulation, an undertaking shall mean a branch undertaking without associated national undertakings and special purpose vehicles, a state economic organisation subordinate to a branch office or national committee, a national undertaking or a special purpose vehicle associated with a branch undertaking, as well as a state economic organisation directly managed by a central authority. The provisions on undertakings shall apply mutatis mutandis to branches in respect of their business activities.

(5) Where this Regulation provides for an obligation to carry out contributions to the State Budget, this shall mean the State Budget of the Federation, the State Budget of the Czech Socialist Republic or the Slovak Socialist Republic according to the seat of the company for the contributions of undertakings managed by the Federation.

ČÁST PRVNÍ

STATE ECONOMIC ORGANISATION IN INDUSTRY, CONSTRUCTION AND TRADE SECTORS AND ORGANISATION OF FOREIGN TRADE

HLAVA 1

Use of profit and depreciation of basic assets in enterprises

§ 4

Financial resources of enterprises

(1) Undertakings create financial resources from which part is paid in the form of contributions and taxes for the needs of the company, part is left for the needs of the enterprises.

(2) The basic financial source of enterprises is profit. *)

§ 5

Use of profit

(1) The undertaking is obliged to use the profit first to fulfil its obligations, namely:

(a) in particular to pay contributions and taxes to the State budget, to the national committee budget and to the State funds;

(b) contributions from the branch headquarters;

(c) to fulfil other obligations.

(2) After making the payments referred to in paragraph 1, the undertaking shall use the profits in particular to produce and supplement:

(a) the turnover fund;

(b) the construction fund;

(c) a fund of cultural and social needs;

(d) the remuneration fund;

(e) other special-purpose funds (Sections 16 to 18).

(3) Where an undertaking has not used the profit referred to in paragraphs 1 and 2, it shall treat it as an undistributed profit which shall be transferred to the following year.

§ 6

Application of depreciation of basic funds

Deductions of basic funds are used by undertakings

(a) allocations to the construction fund;

(b) the levy on the reallocation of funds.

Company contributions and how they are implemented

§ 7

(1) Undertakings shall:

(a) tax payments and payments in accordance with special rules, *)

(b) additional contributions;

(c) contributions from the Directorate-General for Trade pursuant to § 8 (1) (b) and (c);

(d) the levy on the withdrawal of agricultural land from agricultural production (Section 11).

(2) Undertakings directly managed by a central authority shall make a contribution to the competent central authority in accordance with Article 8 (1) (b) instead of a levy.

(3) Undertakings shall contribute to the cost of the business of the branch.

§ 8

(1) Undertakings may be charged these contributions to the Directorate-General for Trade

(a) additional contributions for the reallocation of funds (Paragraph 29);

(b) contributions to technical development, geological work and damage and compensation funds;

(c) the levy on the payment of additional contributions pursuant to Article 18 (1) (g) of Act No. 111 / 1971 Coll., on contributions to the state budget and social security contributions (hereinafter referred to as "the Law on contributions") (§ 10 (2)).

(2) The Trade Directorate shall determine the amount of the contributions to the trade funds referred to in paragraph 1 (b) and the amount of the contribution referred to in paragraph 7 (3) by a single basis for all undertakings in the production unit, in accordance with the rules and for the period to be determined by the status of the production unit.

§ 9

(1) Additional charges

for the recovery of funds received by the organisation in breach of price regulations or in connection with price changes (Section 18 (1) (a) of the Indemnity Act), * *)

to withdraw part of the profit if the plant for the protection of workers is not installed or properly operated or if the plant does not comply with the rules on occupational safety or the health regulations (§ 18 (1) (b) of the Input Act), * * * *)

to withdraw profit for products of insufficient quality or technically obsolete (Section 18 (1) (d) of the Input Act), †)

for exceeding the limit on wage payments paid from the remuneration fund and, where applicable, from profits [Paragraph 18 (1) (f) of the Fee Act], † †)

they shall be carried out in the bank accounts of the State budget within 15 days of delivery of the order of the authorities imposing the levy, unless otherwise provided for in the specific regulation.

(2) Additional charges for the reallocation of funds (Section 18 (1) (c) of the Law on contributions)

(a) undertakings subordinate to the Directorate-General for Trade, at the level and time limits set by the Directorate-General for Trade (§ 29);

(b) production units and undertakings directly subordinate to a central authority at the level and time limits set by the central authority (§ 32).

(3) The additional contribution of construction companies from the single base determined by the Government (Paragraph 18 (1) (e) of the Law on contributions) is carried out by construction companies in the state budget within the time limit set by the relevant Ministry of Finance.

(4) Paragraph 26 (6) of the Law on contributions applies to the enforcement of a decision relating to the additional contributions referred to in paragraphs 1 and 3.

§ 10

(1) The additional contribution of part of the savings of wage resources resulting from the redundancy of workers in the liquidation of inefficient operations, establishments, undertakings, or part of the savings of wage resources due to various rationalisation measures (Section 18 (1) (g) of the FIFG) is carried out on a quarterly basis by the branch directorates and economic organisations directly subordinate to the central authority to a special fund set up in the relevant Ministry of Finance, at the latest by the 25th day following the end of the quarter, at the latest.

(2) The levy provided for in Article 8 (1) (c) is implemented by the economic organisations subordinate to the Directorate-General for Trade on a quarterly basis at the level and time limit set by it.

§ 11

Fee for the withdrawal of agricultural land from agricultural production

(1) In the case of permanent withdrawal of agricultural land from agricultural production *), the contribution from investment funds to the State funds for the fertilisation of land shall be paid. * *)

(2) For the temporary withdrawal of agricultural land from agricultural production, the amount referred to in the specific rules shall be paid annually for the period of withdrawal; *) the levy shall be paid on the profits of the holding.

(3) For the temporary withdrawal of agricultural land from agricultural production for construction site facilities, the investor's contribution from investment funds is paid.

(4) The withdrawal of agricultural land from agricultural production referred to in paragraphs 1 and 3 shall increase the cost of the construction.

Enterprise funds

§ 12

Turnover Fund

The Turnover Fund serves to cover the permanent need for supplies. Its source is the allocation of the company's profit generated (Section 5 (2)) or, where appropriate, the subsidy from a superior body or from the state budget.

§ 13

Construction Fund

(1) In order to finance investment construction, project documentation, copyright and other investments, the company establishes a construction fund.

(2) The construction fund constitutes an allocation from depreciation of basic funds, from profit allocation and from revenue (sales) from the sale of basic funds and investments and from other sources under special rules. It may be supplemented by allocations from senior bodies (including special-purpose subsidies from the State Budget or the State Fund), contributions from other undertakings and authorities and transfers from other funds.

(3) The construction fund is also used for repayments of investment and rationalisation loans and for contributions to other investors provided under specific regulations. Transfers from this fund to other funds are not allowed.

§ 14

Cultural and social needs fund

(1) The Fund for Cultural and Social Needs is made up of a profit allocation at least at the level laid down in a specific regulation; This Regulation also provides for details of the creation and use of a fund of cultural and social needs.

(2) The cultural and social needs fund may be increased by transfers of funds from the sectoral reserve fund up to a maximum of the ceiling laid down by the special regulation. The funds may be transferred from the cultural and social needs fund to the construction fund; the transfer must be approved by the competent authority of the Revolutionary Trade Union Movement.

(3) If an undertaking does not make a fixed minimum profit allocation to a fund of cultural and social needs, it shall not pay annual remuneration to managers and economic performance shares.

§ 15

Remuneration fund

(1) The source of the remuneration fund is that part of the profit remaining to the company after the payment of its obligations under Paragraph 5 (1) and 2 (a) to (c).

(2) An undertaking may allocate a maximum amount of remuneration from profits to the fund determined in accordance with the special rules. * * *) This applies mutatis mutandis to the replenishment of the fund of remuneration from other sources, with the exception of the special-purpose subsidies provided by the State budget.

(3) The remuneration fund may be supplemented by remuneration from socialist competition, contributions and subsidies from supervisors or other, where appropriate, specifically authorised bodies and transfers from the professional reserve fund. Transfers from other funds to the remuneration fund and transfers between company remuneration funds are not allowed.

(4) The use of the funds of the remuneration fund is governed by specific rules, * * *) or collective agreements. In agreement with the competent authority of the Revolutionary Trade Union Movement, the fund may be transferred to other funds.

§ 16

Risk fund

Undertakings may create a risk fund with the agreement of the superior central authority. That authority may determine in which undertakings a risk fund must be set up. The arrangements for the creation and application of this fund shall be determined by the central authority in agreement with the relevant Ministry of Finance.

§ 17

Reserve Fund

The organisation of the research and development base shall constitute a reserve fund by allocation of profits. The amount of the reserve fund shall be determined by the supervisor. The resources of the reserve fund shall be used to cover exceptional economic risks arising from research and development activities in the form of a subsidy to the result of the management. Transfers of reserve funds to other funds are not allowed.

§ 18

In agreement with the relevant Ministry of Finance, the company may, with the agreement of the superior central authority, create additional special-purpose funds.

Financing of the firm's needs

§ 19

Financing of circulation

(1) The business funds are covered

(a) the resources of undertakings of an operational nature (turnover fund, permanent liabilities, free resources of corporate non-investment funds, retained earnings and other free resources);

(b) operating credits;

(c) the funds provided for this purpose by the superior authorities or, where appropriate, by the State budget.

(2) If the bank refuses the loan, the firm is obliged to finance the funds excluded from the loan from its own resources and, where appropriate, from the funds provided by the Directorate-General for the Sector (Section 25 (2)).

(3) The increase in the permanent need for stocks against the stocks on 1 January of the current year shall be covered by the own funds of the undertakings from the distribution of profits referred to in Article 5 (2) by the allocation to the turnover fund. In exceptional cases, undertakings shall be exempt from this obligation if such an addition is covered by subsidies from senior bodies or, where appropriate, from the state budget or credit according to the lending principles approved by the Government of the CSSR. The temporary increase in stocks and the increase in other funds shall be covered by permanent liabilities, balances of corporate non-investment funds, bank credit and other free funds of undertakings, possibly from financial resources of senior bodies.

(4) If the permanent need for stocks falls below the level of the previous year, the increase in the permanent need for stocks in the turnover fund in the coming years may not be supplemented until that need exceeds the original amount.

(5) The first sentence of paragraph 3 and paragraph 4 do not apply to undertakings having a predominantly commercial activity and their branch offices and to sales and supply organisations.

§ 20

Financing of investment construction

(1) The source of financing for investment construction is the own funds of enterprises, resources centralized with senior bodies, bank credit, state budget, state funds, national committees' budgets, or other resources.

(2) The method of financing investment construction, the principles of granting investment subsidies, lending of investments, the pooling of investment funds and the rules on the selection procedure are laid down in specific rules.

§ 21

Financing of technical development costs

(1) The costs of dealing with R & D tasks and other costs of developing science and technology for the needs of the enterprise are included in the costs of the enterprise through the technical development reserve; the amount of reserve formation shall be determined by the central authority, in enterprises (production units) with activities in selected fields of activity in the agreement with the Federal Ministry for Technical and Investment Development and, where appropriate, the relevant Republic ministries of Construction and Technology.

(2) The details of the use of the technical development reserve are governed by a specific regulation. *)

§ 22

Evaluation of results

(1) When drawing up the annual accounts, the firm shall determine the definitive amount of profit, assess the results of the management over the preceding period, settle its liabilities and decide on the allocation of profits to each fund. The annual accounts shall be approved by the superior authority.

(2) The balance of the company's funds is transferred to the following year at the end of the year.

HLAVA 2

Financial management of the production unit

§ 23

Production unit resources

(1) The Trade Directorate shall manage separately:

(a) with own funds of a corporate nature, mutatis mutandis to undertakings; This appropriation is intended to cover, on the one hand, the revenue and revenues of own and associated activities and, on the other hand, the contributions of undertakings to cover the costs of the activities of the Directorate-General for Trade,

(b) with the means of the production unit generated by the additional and, where appropriate, other contributions from undertakings and with the means obtained by the reallocation between the production units; This appropriation is intended to cover the following expenditure:

(c) other means provided for in specific provisions.

(2) The Trade Directorate establishes a sectoral construction fund, a sectoral reserve fund and a technical development fund by centralising funds. Under the conditions laid down in Sections 27 and 28, the Trade Directorate shall establish a Geological Labour and Damage and Compensation Fund; it may also create (complement) a risk fund mutatis mutandis in accordance with § 16 and other sectoral special-purpose vehicles mutatis mutandis in accordance with § 18. In agreement with the relevant Ministry of Finance, the competent central authority may impose the creation of a specific dedicated branch fund.

(3) After payment of the amount referred to in Article 10 (1), the Trade Directorate shall separately manage the means to cover the costs of retraining and the physical security of workers before starting a new employment which are paid to them by economic organisations pursuant to Article 8 (1) (c).

(4) The Trade Directorate must not use centralised resources to cover its business activity.

§ 24

Trade Fund of Construction

(1) The trade fund of construction is created by centralising depreciation (parts of it) from subordinate enterprises, subsidies from the branch reserve fund, subsidies from a superior body, or subsidies from the state budget.

(2) The products of the sectoral construction fund are used

(a) to pay the contribution from the depreciation of the basic funds imposed by the central authority, which will be used to reallocate the funds between the production units or to transfer them to the State budget;

(b) in accordance with the investment construction plan for the allocation to the funds for the construction of subordinate undertakings;

(c) to finance planned investments of the production unit for which the investor is directly the branch head,

(d) repayments of investment credits by the production unit and, where appropriate, the pooling of investment funds.

§ 25

Sector reserve

(1) The branch reserve is created by a one-off withdrawal of funds from the reserve funds of subordinated undertakings (§ 92) and by centralising part of their profits according to the principles set out in § 29. It is not possible to centralise depreciation and sales from the implementation of excluded basic funds into the sectoral reserve fund.

(2) The resources of the sectoral reserve fund are used

(a) to supplement the turnover funds of subordinated undertakings;

(b) to support in-house socialist competition and selected extremely important tasks; any allocation to the remuneration fund may be made only within the limits of the remuneration fund,

(c) to cover losses and, where appropriate, additional costs incurred by undertakings under decisions of the Directorate-General for Trade;

(d) temporary financial assistance to subordinate undertakings to bridge fluctuations in their financial management;

(e) allocations to the sectoral construction fund,

(f) to cover additional levies to reallocate funds between production units (Section 32 (7));

(g) to supplement the fund of cultural and social needs of subordinate undertakings;

(h) grants to subordinate undertakings for the result of the business.

(3) The branch directorates in charge of the ministries of agriculture and nutrition, which create a special reserve fund to cover the difference in the sugar digestion, are obliged to grant the corresponding amount in the years when the digestion exceeds 15% to cover the difference in cases where the digestion falls below 15%.

§ 26

Technical Development Trade Fund

(1) The Technical Development Trade Fund is established by centralising part of the profit from subordinate undertakings, with a branch undertaking without associated national enterprises and special-purpose organisations by a profit allocation; may also be supplemented by special-purpose subsidies from a superior authority or from other sources in accordance with the Special Code *). The management central authority shall determine the minimum design of the technical development sectoral fund; for production units with activities in selected fields, it shall proceed in agreement with the Federal Ministry of Technical and Investment Development and, where appropriate, with the Republic ministries of Construction and Technology.

(2) The technical development sector fund is used to finance technical development.

(3) Further resources and further use of the Fund are laid down in a specific regulation. *)

(4) The Ministry of Trade of the Republic may designate a branch office which may not set up a technical development branch fund.

§ 27

Geological work branch fund

With the approval of the relevant Ministry of Finance, the Trade Directorate, which is responsible for extracting mineral resources, shall, with the agreement of the relevant Ministry of Finance, make contributions and, where appropriate, centralised resources, a branch fund of geological works. This fund is primarily used to finance, or reassess, preliminary and detailed geological surveys of deposits, including transfers of explored stocks to higher categories. This fund may not be transferred to other funds and for other purposes.

§ 28

Trade fund damage and compensation

The branch directorate responsible for the exploration and exploration of deposits, the construction or disposal of mining works and equipment, mining and mining, and their treatment and processing in connection with mining, may, with the approval of the Ministry of Finance concerned, create from contributions from undertakings, or from centralised funds, a sectoral fund of damages and compensation. This fund is mainly used to cover the damage caused by the said activity on the tangible assets of other socialist organisations and on the property of citizens. The funds of this fund cannot be transferred to other funds (except for the construction fund) and for other purposes.

§ 29

Redistribution of funds within the production unit

(1) The Trade Directorate shall carry out the planned redistribution of profits and depreciation within the production unit by centralising the funds from enterprises in the form of additional contributions to the relevant sectoral funds and using them pursuant to paragraphs 24 and 25.

(2) The additional contributions of undertakings to the reallocation of funds shall be determined on the basis of calculations of the planned resources and needs of undertakings. The following principles shall be followed:

(a) in calculating the planned needs, in addition to the obligations arising from the provisions on levies and taxes, account shall be taken of the allocation to the farm funds at the minimum (for the fund of cultural and social needs up to the maximum permitted level, for the fund of remuneration up to the limit) and of the optimal structure of the financial resources for investment (depreciation, profit, credit or grant, where applicable) up to the limit. Furthermore, the planned repayments of bank investment loans and loans, the repayment of long-term operating loans previously agreed and the increase in the permanent need for stocks are taken into account.

(b) in calculating resources, account shall be taken of the balance of the Funds and the retained earnings of previous years;

(c) the additional payment of funds for the purpose of reallocation after the calculation has been carried out shall be fixed by the Directorate-General for Industry in a uniform form. The amount of the additional contribution to the sectoral reserve shall be determined by the branch head of business; This amount may amount to up to 5% of the company's balance sheet profits. This limitation shall not apply to production units for which a reallocation of profits may be made pursuant to Paragraph 32 (7) and where the superior central authority so provides in agreement with the competent Ministry of Finance. The amortisation shall be determined by the absolute amount;

(d) in addition to the amount of the additional levy fixed by the percentage, the branch may also set a minimum amount, namely the absolute amount.

(3) The redistribution of funds must not obscure the differences between well-run and poorly run enterprises.

(4) When reallocating funds within production units managed by the authorities of the Republic with undertakings in the territory of the two Republics, the authorities implementing or proposing reallocation shall be required to discuss proposals for reallocation with the competent authorities of the other Republic; in respect of production units managed by federal authorities, the authorities implementing or proposing reallocation of such proposals shall inform the competent authorities of both Republics.

(5) The additional contributions and subsidies provided for the reallocation of the funds may be amended during the year only if such a change of plan makes it necessary to change the company's relationship with the production unit.

§ 30

Paragraphs 20 and 22 (2) apply mutatis mutandis to the production unit.

HLAVA 3

Cooperation between central authorities in the management of state economic organisations

§ 31

Central authority funds

Citation	Decree of the Government of the Czechoslovak Socialist Republic No. 139 / 1971 Coll., on the Financial Management of State Economic and Certain Other Socialist Organisations
Regulation Type	-
Author	-
Collection	Code of Laws

Date of Promulgation	20.12.1971
Effective from	01.01.1972
Effective until	-
Status	Valid

Decree of the Government of the Czechoslovak Socialist Republic on the financial management of state economic and certain other socialist organisations

Contents

§ 1

§ 2

§ 3