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THE
MINISTRY OF FINANCE
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SOCIALIST
REPUBLIC OF VIET NAM
Independence - Freedom - Happiness
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No.
46/2003/TT-BTC
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Hanoi,
May 15, 2003
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CIRCULAR
GUIDING THE
FIRST-TIME BOND PURCHASE BY ENTERPRISES AS WELL AS BOND PURCHASE/SALE BUSINESS
ACTIVITIES OF ORGANIZATIONS LICENSED TO TRADE IN BONDS
Pursuant to Ordinance No. 12/1999/UBTVQH10 of
April 27, 1999 on the issuance of the national construction bonds;
Pursuant to the Government’s Decree No. 28/2003/ND-CP of March 31, 2003
prescribing the issuance of the 2003 national construction bonds – education
bonds;
Pursuant to Enterprise Income Tax Law No. 03/1997/QH9 of May 10, 1997;
The Ministry of Finance hereby guides in detail the use of capital for the
first-time bond purchase by enterprises as well as bond purchase/sale business
activities of organizations licensed to trade in bonds as follows:
I. GUIDANCE ON THE USE OF CAPITAL FOR THE
FIRST-TIME PURCHASE OF BONDS BY ENTERPRISES
1. Capital sources for bond purchase: Enterprises
must not use funds which are allocated by the State budget for the performance
of public-utility duties, national reserve or price stabilization reserve or
which are assigned by the State for the realization of the State-designated
objectives, to purchase bonds.
Apart from the above-said funds originated from
the State budget, enterprises may use all capital sources within their
management scope as prescribed by law to purchase bonds according to the
State’s general undertakings.
2. Income from bonds: Enterprises of all
economic sectors shall be exempt from income tax on the interests gained from
the first-time purchased bonds, which are issued by the State Treasuries.
3. Accounting of the earned bond interests: The
interests earned from the above-said purchase of bonds shall be accounted on
the principle of temporary inclusion in the enterprises’ income from annual
financial activities (particularly for credit institutions, such interests
shall be accounted into turnover) according to the following formula:
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=
Money
amount used for bond purchase
x
8%
x
The
number of months during which capital is used for bond purchase in the year
12 (months)
Of which: The money amount used for bond
purchase shall be calculated according to bond denominations
The difference, which is the 5-year actual
inflation rate plus (+) the 5-year interest rate, being higher than 40%, shall
be additionally repaid by the State and accounted into financial activities’
income (or turnover, for credit institutions) of the final year.
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- In 2003: (10 x 8%) x 8/12 = VND 0.533 billion
- In 2004: (10 x 8%) x 12/12 = VND 0.8 billion
- In 2005: (10 x 8%) x 12/12 = VND 0.8 billion
- In 2006: (10 x 8%) x 12/12 = VND 0.8 billion
- In 2007: (10 x 8%) x 12/12 = VND 0.8 billion
- In 2008: (10 x 8%) x 4/12 + {10 x (45% - 40%)}
= VND 0.767 billion
The above-said interest amounts shall be
accounted into the enterprises’ annual incomes from financial activities (or
turnover, for credit institutions), but not calculated into the enterprises’
incomes liable to enterprise income tax in that fiscal year because income tax
is exempt as prescribed in Ordinance No. 12/1999/UBTVQH10 on the issuance of
the national construction bonds.
II. GUIDANCE ON BOND PURCHASE/SALE BUSINESS
ACTIVITIES OF ORGANIZATIONS LICENSED TO TRADE IN BONDS
1. Organizations licensed to trade in bonds are
those being Vietnamese legal entities operating under the Law on Credit
Institutions, which are licensed to purchase and/or sell bonds with different
organizations and individuals according to the provisions in Article 10 of the
Government’s Decree No. 28/2003/ND-CP of March 31, 2003 on the issuance of the
2003 national construction bonds – education bonds.
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3. The bond-trading organizations shall be
subject to the inspection and supervision by the finance agencies and
specialized State management agencies regarding their bond-trading activities
according to law provisions.
4. Organizations falling into the subjects
licensed to trade in bonds, when conducting bond-trading activities, shall not
have to carry out procedures to apply for permission of State management
agencies.
5. In the course of bond trading, the
bond-trading organizations must publicly announce the bond purchase and sale
prices, and purchase and sell bonds at the announced prices.
For bonds purchased for under 12 months as from
the issuance date inscribed thereon, their minimum purchase prices shall not be
lower than 90% of the denominations inscribed thereon.
For bonds purchased for full 12 months or more
as from the issuance date inscribed thereon, their purchase prices shall be
determined on the basis of the bond denominations and interests earned till the
time of bond purchase, which must be larger than the bond denominations.
6. The bond-trading organizations must pay
income tax according to the provisions of the Enterprise Income Tax Law and
current legal documents. The determination of taxable income in different cases
shall be as follows:
a/ For income gained from bonds purchased and
sold in business activities, the taxable income (if any) shall be determined as
follows:
In cases where the bond-trading organizations
open accounting books, monitor and separately account all revenues and
expenditures related to bond purchase/sale activities:
Bond Purchase price of Corresponding
Taxable income = sale - corresponding - reasonable
price volume of bonds expenses
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Bond Purchase price of Taxable income = sale -
corresponding price volume of bonds
b/ For incomes gained from the purchased bonds,
which are not sold but directly repaid by the State treasuries maturely or
prematurely, the taxable income (if any) shall be determined as follows:
In cases where the bond-trading organizations
open accounting books, monitor and separately account all revenues and
expenditures related to bond purchase/sale business activities:
Bond Purchase money price of Corresponding
Taxable income = to be repaid - corresponding - reasonable (principals volume
expensesand interests) of bonds
In cases where the bond-trading organizations
cannot separately account revenues and expenditures related to bond
purchase/sale business activities:
Bond money to be Purchase price of Taxable
income = repaid (principals - corresponding and interests) volume of bonds
c/ Corresponding reasonable expenses stated at
Items a and b above mean the expenses related to purchase capital and
organization of bond purchase/sale activities.
7. To strictly prohibit organizations and
individuals to speculate in bond trading, thus causing market disorder and
resulting in the false increase or decrease of bond purchase/sale prices.
8. For the bond-trading organizations which
purchase bonds at the prices lower than the minimum prices prescribed in Clause
5, Section II of this Circular, the difference thereof must be retrospectively
collected and remitted into the State budget. If re-committing such violations,
they shall be suspended from bond trading activities.
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1. This Circular applies to the drive of
issuance of the 2003 national construction bonds – education bonds, and takes
effect as from the effective date of the Government’s Decree No. 28/2003/ND-CP
of March 31, 2003.
2. Apart from the provisions in this Circular,
enterprises being credit institutions shall also have to strictly implement the
current regulations.
3. Any difficulties or problems arising in the
course of implementation should be promptly reported to the Ministry of Finance
for study and settlement.
FOR THE FINANCE MINISTER
VICE MINISTER
Le Thi Bang Tam