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THE
GOVERNMENT OF VIETNAM
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SOCIALIST
REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
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No.
11/2024/ND-CP
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Hanoi,
February 02, 2024
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DECREE
ON
LOAN INTEREST, FAIR RETURN, PAYMENT METHODS, SETTLEMENT OF INVESTMENT PROJECTS
UNDER BT CONTRACTS; EXEMPTION FROM CORPORATE INCOME TAX, PERSONAL INCOME TAX IN
HO CHI MINH CITY
Pursuant to the Law on
Government Organization dated June 19, 2015; the Law on amendment to the Law on
Government Organization and the Law on Local Government Organization dated
November 22, 2019;
Pursuant to the Law on State
Budget dated June 25, 2015;
Pursuant to the Law on Corporate
Income Tax dated June 3, 2008; the Law on amendment to the Law on Corporate
Income Tax dated June 19, 2013;
Pursuant to the Law on Personal
Income Tax dated November 21, 2007; the Law on amendment to the Law on Personal
Income Tax dated November 22, 2012;
Law on amendment to tax laws
dated November 26, 2014;
Pursuant to the Construction Law
dated June 18, 2014; the Law on amendment to the Construction Law dated June
17, 2020;
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Pursuant to the Law on Tax
Administration dated June 13, 2019;
Pursuant to the Law on
Investment in Public-Private Partnerships dated June 18, 2020;
Pursuant to Resolution No.
98/2023/QH15 dated June 24, 2023 of the National Assembly on pilot
implementation of specific regulations and policies on Ho Chi Minh City
development;
At request of the Minister of
Finance;
The Government promulgates
Decree on loan interest, fair return, payment methods, settlement of investment
projects under BT contracts; exemption from corporate income tax, personal
income tax in Ho Chi Minh City.
Chapter I
GENERAL PROVISIONS
Article 1. Scope
1. This Decree elaborates
Resolution No. 98/2023/QH15 dated June 24, 2023 of the National Assembly on pilot
implementation of specific regulations and policies on Ho Chi Minh City
development (hereinafter referred to as “Resolution No. 98/2023/QH15”),
including:
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b) Exemption from corporate income
tax (CIT), personal income tax (PIT) in accordance with Point a and Point b
Clause 1 Article 8 of Resolution No. 98/2023/QH15.
2. This Decree does not provide
for:
a) Loan interest during
construction phase of BT projects which conforms to construction laws;
b) Equity mobilized by investors
for implementation of BT project which conforms to Article 77 of the Law on Investment
in Public-Private Partnerships.
Article 2. Regulated entities
This Decree applies to:
1. Parties to BT contracts,
agencies, organizations, and individuals relevant to investment in BT projects
in Ho Chi Minh City.
2. Enterprises, agencies,
organizations, and individuals relevant to renovation start-up and business
start-up in Ho Chi Minh City.
Chapter II
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Section 1. POST-CONSTRUCTION
INTEREST AND FAIR RETURN
Article 3. Basis for determining
top limit of post-construction interest and top limit of after-tax return rate
on equity
1. Reference interest rate for the
purpose of proposing post-construction interest rate
a) Average interest rates for
medium-term and long-term loans of 4 commercial institutions in Ho Chi Minh
City provided by State Bank of Vietnam branch in Ho Chi Minh City: Joint Stock
Commercial Bank for Foreign Trade of Vietnam, Joint Stock Commercial Bank for
Investment and Development of Vietnam, Vietnam Joint Stock Commercial Bank for
Industry and Trade, Vietnam Bank for Agriculture and Rural Development or
Agribank;
b) Loan interest rates of similar
BT projects (if any).
2. Average after-tax return rate on
equity of enterprises operating in respective sectors and fields of BT projects
in Ho Chi Minh City consolidated and reported to People’s Committee of Ho Chi
Minh City by professional departments and authorities affiliated to People’s
Committee of Ho Chi Minh City.
Article 4. Entitlement and
procedures for approving top limit of post-construction interest rates and
after-tax return rate on equity of investors
1. Based on list of BT projects,
capacity for balancing funding sources in medium-term and annual public
investment plans, capacity for issuing bonds of local government, interest
rates, and after-tax return rate on equity of investors under Article 3 hereof,
the People’s Committee of Ho Chi Minh City shall request the People’s Council
of Ho Chi Minh City to promulgate Resolution on top limit of post-construction
interest rates and top limit of after-tax return rate on equity of investors in
the year-end meeting of People's Council of Ho Chi Minh City.
2. Top limit of post-construction
interest rates and top limit of after-tax return rate on equity proposed to the
People’s Council of Ho Chi Minh City by the People’s Committee of Ho Chi Minh
City under Clause 1 of this Article must not be higher than reference values
under Article 3 hereof.
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4. Regulations under Clause 3 of
this Article shall serve as the basis for determining post-construction
interest rates and fair return of investors in total investment of BT projects
for the purpose of:
a) producing and appraising
pre-feasibility study report, reports proposing investment guidelines of BT
projects; approving investment guidelines of BT projects;
b) producing and appraising
feasibility study report; approving BT projects;
c) choosing investors, negotiating
and signing BT contracts;
d) paying and settling investment
of finished BT projects.
5. If average interests of
medium-term and long-term loans in credit market fluctuate in a manner that
leads to adjustment top limit of post-construction interest rates of BT
projects, People’s Committee of Ho Chi Minh City is responsible for requesting
People’s Council of Ho Chi Minh City to consider.
6. Regarding issuance of
post-construction interest rates and return rate on equity of 2024
a) People’s Committee of Ho Chi
Minh City shall request People's Council of Ho Chi Minh City to promulgate
Resolution on top limit of post-construction interest rates and top limit of
return rate on equity of investors in accordance with Clause 1 of this Article
in the next meeting of People’s Council of Ho Chi Minh City from the date on
which this Decree comes into force;
b) Based on Resolution promulgated
by the People’s Council of Ho Chi Minh City under Point a of this Clause,
People’s Committee of Ho Chi Minh City shall promulgate Decision on
post-construction interest rates in accordance with term of respective BT
contracts and rules for applying top limit of post-construction interest rates;
return rate on equity of investors in respective sectors and fields.
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1. Calculation of post-construction
interests
a) Post-construction interests
shall be calculated from the date on which BT projects are finished,
transferred, and used to the date on which payment to investors is fully made;
b) Post-construction interests of
loans incurred by the Government shall cease to be accumulated from the date on
which the Government pays investors;
c) The period past the time limit
prescribed under this Decree in which investors submit documents on settlement
of investment of finished BT projects shall not be counted towards period in
which post-construction interests are calculated to be paid by the Government.
2. Post-construction interest rates
a) Post-construction interest rates
shall be calculated in accordance with actual interests of capital mobilized by
investors for the purpose of executing BT projects;
b) If actual post-construction
interest rates are higher than what is prescribed under BT contracts and
appendices of BT contracts (if any), the Government shall only incur up to the
post-construction interest rates specified under BT contracts and appendices of
BT contracts (if any).
3. Loan capital mobilized by
investors for the purpose of executing BT projects shall at most equal loan
capital under BT contracts and appendices of BT contracts (if any).
4. The date on which loans are
disbursed, disbursement percentage between equity and loan capital shall
conform to signed BT contracts and appendices of BT contracts (if any).
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Article 6. Basis for determining
return of investors incurred by the Government
1. Calculation of fair return of
investors
a) Return of investors is
calculated from the date on which BT projects are finished, transferred, and
used to the date on which payment to investors is made;
b) In respect of independently
operated work items and constructions affiliated to BT projects paid in
accordance with BT contracts: return of investors shall be calculated from the
date on which the work items, constructions affiliated to BT projects are
commissioned and used to the date on which the Government pays the investors;
c) Return of investors
corresponding to equity paid for by the Government shall cease from the date on
which the Government pays the investors;
d) The period past the time limit
prescribed under this Decree in which investors submit documents on settlement
of investment of finished BT projects shall not be counted towards period in
which investor return is calculated to be paid by the Government.
2. Actual equity with which the
investors participate in BT projects shall equal at most the equity specified
under BT contracts and appendices of BT contracts (if any).
3. Return rate on equity shall be
specified under BT contracts and appendices of BT contracts (if any).
4. The date on which the Government
pays public investment for investors shall be specified under BT contracts and
appendices of BT contracts (if any).
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Article 7. Rules for
controlling, paying public investment
1. The State Treasury shall control
and settle public investment from state budget sources in accordance with this
Decree.
2. Agencies signing BT contracts
shall open accounts at the State Treasury to facilitate transactions. The
opening of accounts for control and payment shall conform to regulations of the
Government on administrative procedures of the State Treasury and the Ministry
of Finance regarding guidelines for registration and use of accounts at the
State Treasury.
3. Upon receiving documents on
detail allocation of public investment plan (including amendments, if any) of
People’s Committees of Ho Chi Minh City, in respect of tasks and projects that
have met all investment procedures according to Resolution No. 98/2023/QH15 and
have had plan capital allocated and/or revised, the State Treasury shall rely
on request for payment of agencies signing BT contracts, payment clauses under
BT contracts and appendices of BT contracts (if any), installments, payment
stages, payment date, payment conditions, and value of each installment to pay
capital of projects.
If documents requesting payment of
agencies signing BT contracts are inadequate in accordance with this Decree,
the State Treasury shall reject payment and, within 3 working days from the
date on which they receive payment request sent by agencies signing BT
contracts, state reasons for rejection in writing and send to agencies signing
BT contracts once for revision in accordance with this Decree.
4. The State Treasury shall perform
capital control and payment within 3 working days from the date on which
adequate documents requesting payment sent by agencies signing BT contracts are
received in accordance with this Decree.
5. Total capital of BT projects
that is paid must not exceed total investment approved by competent authority. Public
investment of projects disbursed in a year must not exceed capital plan of the
year.
6. The State Treasury is
responsible for controlling and paying capital in a timely, adequate, and
law-compliant manner when payment conditions are met and payment documents are
adequate as per the law.
7. Agencies signing BT contracts
are responsible for managing and using capital for the right purposes,
beneficiaries, efficiently, effectively; complying with applicable regulations,
accuracy of workload, unit price, amount requesting payment, and documents
provided to State Treasury.
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1. Allocation of public investment
for payment of BT projects shall be implemented within 6 years in respect of
group A projects, 4 years in respect of group B projects, 3 years in respect of
group C projects from the date on which the projects are finished.
2. BT contracts and appendices of
BT contracts must include specific regulations proportion of equity and loan,
conditions, term, number of occasions where the Government pays BT project
enterprises or investors (if BT project enterprises are not established).
3. The Government shall pay for BT
project enterprises or investors (if BT project enterprises are not
established) after BT projects or independently operating work items,
constructions affiliated to BT projects are verified for completion by agencies
signing BT contracts in accordance with construction laws and audited for value
of finished BT projects, independently operating work items, constructions
affiliated to BT projects.
4. Final installment shall only be
made after public investment of finished BT projects are approved by competent
authority for settlement of investment of finished BT projects.
Article 9. Procedures for
settling state capital via the State Treasury
1. Send documents and receive
results directly at the State Treasury.
2. Send documents and receive
results via Public Service Portal of the State Treasury if entities engage in
electronic transactions with the State Treasury (entities shall access and
comply with instructions on Public Service Portal of the State Treasury).
3. Send documents and receive
results via National Public Service Portal.
Article 10. Documents on control
and payment
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Agencies signing BT contracts shall
send legal documents of BT projects to the State Treasury (upon initial
transactions with the State Treasury or when necessary):
a) Decision approving BT projects
of competent authority and decisions on amendment to BT projects (if any)
(original copies or copies created by agencies signing BT contracts);
b) Signed BT contracts and
appendices of BT contracts (if any) (original copies or copies created by agencies
signing BT contracts);
c) Annual public investment plans
assigned by competent authority (original copies or copies created by agencies
signing BT contracts);
d) In respect of payment for
independently operating work items and constructions affiliated to finished BT
projects: written verification of independently operating work items and
constructions affiliated to finished BT projects in accordance with
construction laws (original copies or copies created by agencies signing BT
contracts).
2. Payment documents
a) In respect of payment for
independently operating work items and constructions affiliated to finished BT
projects: audit reports of independently operating work items and constructions
affiliated to finished BT projects (original copies or copies created by
agencies signing BT contracts);
b) In respect of payment following
completion of BT projects: decisions approving settlement of investment of
finished BT projects approved by competent authority (original copies or copies
created by agencies signing BT contracts);
c) Documents of competent
individuals approving BT projects determining interests of loans that are taken
after the date on which audit is performed (original copies or copies created
by agencies signing BT contracts) in respect of payment for post-construction
interests for loans taken after the date on which audit organizations perform
audit;
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dd) Notice on capital withdrawal
(Form No. 2 under Appendix attached hereto).
Section 3. SETTLEMENT OF
INVESTMENT OF FINISHED BT PROJECTS
Article 11. Settlement of
investment of finished BT projects
1. Settlement of investment of
finished BT projects shall conform to public investment laws and this Decree.
2. Rules for settling investment of
finished BT projects
a) Settlement reports of finished
BT projects must be audited;
b) Settlement of investment of
finished BT projects relies on decisions approving projects, regulations under
BT contracts, settlement reports of investment of finished BT projects, and
documents of competent individuals approving BT projects on determining of
interests of loans taken by investors after the date on which audit
organizations perform audit.
Article 12. Agencies producing
settlement reports of investment of finished BT projects, documents requesting
approval of settlement of investment of finished BT projects
1. BT project enterprises or
investors (if BT project enterprises are not established) acting as agencies
producing settlement reports of investment of finished BT projects shall send
documents to competent individuals entitled to approve settlement and agencies
presiding approval for settlement of investment of finished BT projects.
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Chapter III
EXEMPTION FROM CORPORATE INCOME TAX AND PERSONAL
INCOME TAX
Article 13. Corporate income tax
exemption
1. Business start-up enterprises,
science and technology organizations, renovation centers, and intermediate
organizations assisting business start-up and renovation (hereinafter referred
to as “enterprises”) generating revenues from business start-up and renovation
in Ho Chi Minh City shall be eligible for exemption from CIT of these revenues.
Enterprises generating revenues
eligible for CIT exemption under this Clause must satisfy regulations of
People’s Council of Ho Chi Minh City on priority sectors; criteria, conditions,
and details of business start-up and renovation operations.
CIT exemption shall last 5 years
starting from the date on which eligible enterprises generate CIT payable from
start-up and renovation operations in Ho Chi Minh City during the effective
period of Resolution No. 98/2023/QH15. When Resolution No. 98/2023/QH15 expires
before CIT exemption period under this Clause, enterprises shall continue to
benefit from CIT exemption for the full duration of exemption.
If enterprises are benefiting from
or eligible for CIT exemption under eligibility other than those specified
under this Decree, they may choose to either benefit from CIT exemption under
other eligibility or eligibility under this Decree for the remainder of the
duration.
2. During the effective period of
Resolution No. 98/2023/QH15, organizations generating revenues from transfer of
capital, right to capital contribution to business start-up enterprises in Ho
Chi Minh City shall be eligible for CIT exemption for these revenues.
Business start-up enterprises in Ho
Chi Minh City under this Clause must meet regulations of People’s Council of Ho
Chi Minh City on priority sectors; criteria, conditions, and details of
business start-up and renovation operations.
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In case of total acquisition of
single-member limited liability companies owned by organizations in form of
transfer of capital attached to immovable property, CIT shall be declared and
paid in accordance with immovable property transfer.
3. If enterprises engage in
multiple production and business activities, the enterprises shall determine
and record revenues generated from activities eligible for CIT exemption under
this Article in accordance with corporate income tax laws.
4. Enterprises shall declare and
pay tax in accordance with tax administration laws.
Article 14. Personal income tax
exemption
1. During the effective period of
Resolution No. 98/2023/QH15, individuals generating revenues from transfer of
capital, right to capital contribution to business start-up enterprises in Ho
Chi Minh City shall be eligible for PIT exemption for these revenues.
Business start-up enterprises in Ho
Chi Minh City under this Clause must meet regulations of People’s Council of Ho
Chi Minh City on priority sectors; criteria, conditions, and details of
business start-up and renovation operations.
Revenues generated from transfer of
capital, right to capital contribution under this Clause mean revenues generated
by partial or total transfer of capital, right to capital contribution to
business start-up enterprises in Ho Chi Minh City (including merger and
acquisition of enterprises), except for revenues generated from the transfer of
shares, bonds, fund certificates, and other securities as per the law.
In case of total acquisition of
single-member limited liability companies owned by individuals in form of
transfer of capital attached to immovable property, PIT shall be declared and
paid in accordance with immovable property transfer.
2. Determination of revenues
generated by transfer of capital, right to capital contribution and declaration
to tax authority shall conform to personal income tax and tax administration
laws.
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RESPONSIBILITIES OF AGENCIES, ORGANIZATIONS, AND
INDIVIDUALS
Article 15. Responsibilities of
Ministry of Finance
Cooperate with People’s Committee
of Ho Chi Minh City in consolidating and reporting difficulties in
implementation of BT projects to Prime Minister in accordance with this Decree.
Article 16. Responsibilities of
Ministry of Planning and Investment
Cooperate with People’s Committee
of Ho Chi Minh City within their functions and tasks in implementing BT
projects in accordance with Resolution No. 98/2023/QH15 and this Decree.
Article 17. Responsibilities of
Ministry of Construction
Provide guidelines in respect of
difficulties relating to construction investment of BT projects in accordance
with construction laws.
Article 18. Responsibilities of
the State Bank of Vietnam
Instruct State Bank of Vietnam
branch of Ho Chi Minh City to provide average interests of medium-term and
long-term loans of 4 commercial institutions under Point c Clause 1 Article 3
hereof at request of People’s Committee of Ho Chi Minh City.
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Promulgate Resolution on top limit
of post-construction interests and top limit of return rate on equity of
investors at meeting of People’s Council of Ho Chi Minh City in accordance with
Clause 1 and Clause 6 Article 4 of this Decree.
Article 20. Responsibilities of
People’s Committee of Ho Chi Minh City
1. Organize implementation of this
Decree; ensure compliance with this Decree, Resolution No. 98/2023/QH15, construction
laws, public investment laws, and state budget laws.
2. Promulgate Decision on
post-construction interests depending on term of respective BT contracts and
rules for applying top limit of post-construction interests in accordance with
Clause 3 and Clause 6 Article 4 hereof.
3. Request People’s Council of Ho
Chi Minh City to allocate public investment in medium-term and annual public
investment plans of Ho Chi Minh City to pay BT investors in accordance with
signed BT contracts and appendices of BT contracts (if any).
4. Cooperate with State Bank of
Vietnam in guiding State Bank of Vietnam branch of Ho Chi Minh City to provide
average interests of medium-term and long-term loans of 4 commercial
institutions under Point c Clause 1 Article 3 hereof.
5. Cooperate with ministries and
central departments in order to receive guidelines and handle difficulties (if
any) relating to procedures for producing, appraising, approving, managing Bt
projects, construction investment, construction quality, signing and managing
BT contracts.
Article 21. Responsibilities of
competent authority approving investment guidelines and approving BT projects
1. Assume responsibility in
choosing investment format of projects according to BT contracts; ensuring
investment effectiveness and public investment use effectiveness.
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Article 22. Responsibilities of
BT project enterprises and investors
1. BT project enterprises or
investors (if BT project enterprises are not established) are responsible for
exercising rights and obligations under BT contracts and appendices of BT
contracts (if any), this Decree, Resolution No. 98/2023/QH15, and relevant law
provisions.
2. Cooperate with agencies signing
BT contracts to finalize documents on payment and settlement of finished BT
projects.
Chapter V
IMPLEMENTATION
Article 23. Entry into force
1. This Decree comes into force
from the date of signing.
2. Regulations on exemption from
CIT and PIT under Article 13 and Article 14 hereof shall enter into force from
the effective date hereof
3. If Resolution No. 98/2023/QH15
expires where BT contracts have been signed during effective period of
Resolution No. 98/2023/QH15 and are being implemented, BT contracts shall
conform to this Decree.
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ON
BEHALF OF. THE GOVERNMENT
PP. PRIME MINISTER
DEPUTY PRIME MINISTER
Le Minh Khai