Decree No. 11/2024/NĐ-CP stipulates interest rates on loans, reasonable profits, payment methods, settlement of BOT investment projects; exemption from corporate income tax and personal income tax within Ho Chi Minh City.

DECREE

Regulations on interest rates for loans, reasonable profits, payment methods, final settlement of investment projects under Build-Transfer (BT) contracts; exemption from corporate income tax and personal income tax in Ho Chi Minh City

Pursuant to the Law on Organization of the Government dated June 19, 2015; the Law Amending and Supplementing Certain Provisions of the Law on Organization of the Government and the Law on Organization of Local Administration dated November 22, 2019;

Pursuant to the State Budget Law dated June 25, 2015,

Pursuant to the Corporate Income Tax Law dated June 3, 2008; the Law Amending and Supplementing Certain Provisions of the Corporate Income Tax Law dated June 19, 2013;

Pursuant to the Personal Income Tax Law dated November 21, 2007; the Law Amending and Supplementing Certain Provisions of the Personal Income Tax Law dated November 22, 2012;

The Law Amending and Supplementing Certain Provisions of Tax Laws dated November 26, 2014;

Pursuant to the Law on Construction dated June 18, 2014; the Law Amending and Supplementing Certain Provisions of the Law on Construction dated June 17, 2020;

Pursuant to the Law on Public Investment dated June 13, 2019;

Pursuant to the Law on Tax Administration dated June 13, 2019;

Pursuant to the Public-Private Partnership Investment Law dated June 18, 2020;

Pursuant to Resolution No. 98/2023/QH15 dated June 24, 2023 of the National Assembly on piloting certain special mechanisms and policies for the development of Ho Chi Minh City;

At the proposal of the Minister of Finance;

The Government promulgates this Decree regulating interest rates for loans, reasonable profits, payment methods, final settlement of investment projects under Build-Transfer (BT) contracts; exemption from corporate income tax and personal income tax in Ho Chi Minh City.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

Article 1. This Decree provides detailed regulations on certain provisions of Resolution No. 98/2023/QH15 dated June 24, 2023 of the National Assembly on piloting certain special mechanisms and policies for the development of Ho Chi Minh City (hereinafter referred to as Resolution No. 98/2023/QH15), including:

a) Interest rates for loans after the construction period, reasonable profits, payment methods, final settlement of investment projects under Build-Transfer (BT) contracts (hereinafter referred to as BT projects) in Ho Chi Minh City as stipulated in Point d Clause 5 Article 4 of Resolution No. 98/2023/QH15;

b) Exemption from corporate income tax and personal income tax as stipulated in Points a and b Clause 1 Article 8 of Resolution No. 98/2023/QH15.

Article 2. This Decree does not regulate the following contents:

a) Interest rates during the construction period of BT projects shall be implemented in accordance with the laws on construction;

b) The proportion of equity capital raised by investors to implement BT projects shall be carried out in accordance with Article 77 of the Law on Investment under Public-Private Partnership.

Article 2. Applicability

This Decree applies to the following subjects:

1. Parties in BT contracts, agencies, organizations, and individuals related to investment activities in BT projects in Ho Chi Minh City.

2. Enterprises, agencies, organizations, and individuals related to startup innovation and creative entrepreneurship activities in Ho Chi Minh City.

Chapter II
INTEREST RATES AFTER CONSTRUCTION PERIOD, REASONABLE PROFIT,
PAYMENT METHODS AND FINAL SETTLEMENT OF COMPLETED BT PROJECT INVESTMENT CAPITAL
FINAL JUDGMENT

Section 1
INTEREST RATES AFTER CONSTRUCTION PERIOD, REASONABLE PROFIT

Article 3. Basis for determining the ceiling interest rate for loans after the construction period and the ceiling ratio of post-tax profit to equity capital

1. Reference interest rate proposed for the ceiling interest rate for loans after the construction period

a) Average medium- and long-term loan interest rates of four commercial banks in Ho Chi Minh City provided by the State Bank of Vietnam Branch in Ho Chi Minh City, including: Joint Stock Commercial Bank for Foreign Trade of Vietnam, Joint Stock Commercial Bank for Investment and Development of Vietnam, Joint Stock Commercial Bank for Industry and Trade of Vietnam, and Agricultural Bank of Vietnam and Rural Development.

b) Interest rate of loans for similar BT projects (if available).

2. The ratio of post-tax profit to average equity capital of enterprises operating in the industry and field of BT projects in Ho Chi Minh City compiled and proposed for reporting to the People's Committee of Ho Chi Minh City by relevant departments and sectors under the People's Committee of Ho Chi Minh City.

Article 4. Authority, procedures, and formalities for approving the ceiling interest rate for loans after the construction period and the ratio of post-tax profit to equity capital of investors

1. Based on the list of BT projects, the ability to balance funding sources in the medium-term and annual investment plans, the ability to issue local government bonds, and the loan interest rates and the ratio of post-tax profit to equity capital of investors as stipulated in Article 3 of this Decree, the People's Committee of Ho Chi Minh City shall submit a resolution to the People's Council of Ho Chi Minh City to set the ceiling for post-construction loan interest rates and the ceiling for the ratio of post-tax profit to equity capital of investors at the last session of the People's Council of Ho Chi Minh City in the year.

2. The ceiling for post-construction loan interest rates and the ceiling for the ratio of post-tax profit to equity capital proposed by the People's Committee of Ho Chi Minh City as stipulated in Clause 1 of this Article shall not exceed the reference interest rates and profit ratios to equity capital specified in Article 3 of this Decree.

3. Based on the resolution of the People's Council of Ho Chi Minh City as stipulated in Clause 1 of this Article, the People's Committee of Ho Chi Minh City shall issue a decision to specify the post-construction loan interest rates according to the term of the BT contract and the principle of applying the ceiling for post-construction loan interest rates; the ratio of post-tax profit to equity capital of investors by industry and field before December 31 each year to implement BT projects in Ho Chi Minh City in the following year.

4. The provisions in Clause 3 of this Article serve as the basis for determining the cost of interest on loans after the construction period and the reasonable profit of investors in the total investment cost of BT projects when:

a) Preparing and reviewing feasibility studies, proposals for investment policy approval of BT projects; approving the investment policy of BT projects;

b) Preparation, review, and approval of feasibility studies and BT project proposals;

c) Selecting investors, negotiating, and signing BT contracts;

d) Paying and settling the investment capital of completed BT projects.

5. In case the average medium- and long-term loan interest rates in the credit market fluctuate, leading to adjustments in the ceiling for post-construction loan interest rates of BT projects, the People's Committee of Ho Chi Minh City shall be responsible for reporting to the People's Council of Ho Chi Minh City for consideration and decision.

6. Regarding the issuance of post-construction loan interest rates and the ratio of post-tax profit to equity capital in 2024

a) The People's Committee of Ho Chi Minh City shall submit a resolution to the People's Council of Ho Chi Minh City to set the ceiling for post-construction loan interest rates and the ceiling for the ratio of post-tax profit to equity capital of investors as stipulated in Clause 1 of this Article at the nearest session of the People's Council of Ho Chi Minh City from the date this Decree takes effect;

b) Based on the resolution of the People's Council of Ho Chi Minh City issued in accordance with point a of this clause, the People's Committee of Ho Chi Minh City shall issue a decision to specify the post-construction loan interest rates according to the term of the BT contract and the principle of applying the ceiling for post-construction loan interest rates; the ratio of post-tax profit to equity capital of investors by industry and field.

Article 5. Basis for determining the interest expense on capital loans after the construction period to be paid by the State

1. The period for calculating interest on capital loans after the construction period

a) The period for calculating interest on capital loans after the construction period starts from the completion date of the BT project, handover, and commissioning until the completion of payment to the investor;

b) Interest on capital loans after the construction period for the portion of loan capital that has been paid by the State will cease from the date the State pays the investor;

c) The time when investors submit settlement documents for completed BT project investment capital later than the time specified in this Decree shall not be counted in the period for calculating post-construction loan interest paid by the state.

2. Interest rate on capital loans after the construction period

a) The interest rate on capital loans after the construction period is calculated based on the actual interest rate on capital loans raised by the investor to implement the BT project;

b) In cases where the post-construction actual interest rate on borrowed capital is higher than that stipulated in the BT contract and the BT contract appendix (if any), the maximum interest rate on borrowed capital to be paid by the State shall be equal to the interest rate stipulated in the BT contract and the BT contract appendix (if any).

3. The actual amount of loan capital raised by the investor to implement the BT project, up to the amount of loan capital stipulated in the BT contract and the BT contract annex (if any).

4. The disbursement date of the loans, the ratio of disbursement between equity and loan capital as stipulated in the signed BT contract and the BT contract annex (if any).

5. The date when the State pays the public investment capital to the investor as stipulated in the BT contract and the BT contract annex (if any).

Article 6. Basis for determining the investor's profit to be paid by the State

1. The period for calculating reasonable investor's profit

a) Investor's profit is calculated from the completion date of the BT project, handover, and commissioning until the completion of payment to the investor;

For individual project components and construction works under independent-operating BT projects, the investor's profit shall be calculated from the time such project components and construction works are completed, accepted, and put into operation until the time the State pays the investor according to the provisions of the BT contract.

c) Investor's profit for the portion of equity capital that has been paid by the State ceases from the date the State pays the investor;

The period during which the investor submits the final settlement documents for the BT project later than the time specified in this Decree shall not be included in the calculation period for the investor's profit to be paid by the State.

2. The actual amount of equity capital invested by the investor in the BT project, up to the amount of equity capital stipulated in the BT contract and the BT contract annex (if any).

3. The profit margin on equity capital stipulated in the BT contract and the BT contract annex (if any).

4. The date when the State pays the public investment capital to the investor as stipulated in the BT contract and the BT contract annex (if any).

Section 2
PAYMENT FOR THE BT PROJECT

Article 7. Principles for controlling and settling public investment capital

Clause 1. The State Treasury shall perform the tasks of controlling and settling public investment capital sourced from the state budget in accordance with the provisions of this Decree.

Clause 2. The contracting agency of the BT project shall open an account at the State Treasury location convenient for transactions. Account opening for control and settlement shall be carried out in accordance with the Government's regulations on administrative procedures within the domain of the State Treasury and the Ministry of Finance's guidelines on registering and using accounts at the State Treasury.

Clause 3. Upon receipt of detailed allocation documents for public investment capital plans (including adjustments and supplements if any) issued by the People's Committees at various levels of Ho Chi Minh City, for tasks and projects that have completed investment procedures in accordance with Resolution No. 98/2023/QH15 and have been allocated or adjusted in capital allocation, the State Treasury shall base its payments on the payment request documents submitted by the BT contract signing agency, the payment terms stipulated in the BT contract and the BT contract appendix (if any), the number of payments, payment stages, payment dates, payment conditions, and the value of each payment.

If the payment request documents submitted by the BT contract signing agency do not comply with the prescribed regulations or are missing required documents as stipulated in this Decree, the State Treasury shall refuse payment. Within three working days from the date of receiving the payment request documents, the State Treasury must issue a specific notification of the reasons for refusal and send it once to the BT contract signing agency to complete and supplement in accordance with this Decree.

4. The maximum period for the State Treasury to control and settle funds is three working days from the date of receipt of complete payment documents of the agency signing the BT contract as stipulated in this Decree.

Clause 5. The total amount of capital settled for the BT project shall not exceed the approved total investment ceiling. The amount of public investment capital disbursed in a year for the project shall not exceed the planned capital allocation for that year.

6. The State Treasury has the responsibility to timely, fully, and properly settle funds for the project when all settlement conditions and documents are in compliance with the regulations.

Clause 7. The BT contract signing agency shall be responsible for managing and utilizing capital for the intended purpose, for the designated recipients, economically, and efficiently; complying with current laws, and bearing responsibility for the accuracy of the volume of work performed, unit prices, proposed payment values, and documents provided to the State Treasury.

Article 8. Conditions for Settling BT Projects

Clause 1. The period for allocating public investment capital to settle BT projects from the completion and handover to the State shall not exceed six years for Class A projects, four years for Class B projects, and three years for Class C projects.

Clause 2. The BT contract and the BT contract appendix must specify the equity ratio and loan ratio, conditions, deadlines, and the number of times the State will pay the BT project enterprise or the investor (in cases where a BT project enterprise is not established).

The State will pay the BT project enterprise or the investor (in cases where a BT project enterprise is not established) after the BT project or individual project components and construction works under independent-operating BT projects have been confirmed as completed by the BT contract signing agency in accordance with construction law regulations and have been audited for the completed BT project value and individual project components and construction works under independent-operating BT projects.

Clause 4. The final payment shall only be made after the completed public investment capital value of the BT project has been approved by the competent authority for the final settlement of the BT project capital.

Article 9. Methods for Implementing State Capital Payment Procedures through the State Treasury

1. Submitting documents and receiving results directly at the State Treasury's office.

2. Submitting documents and receiving results through the State Treasury's public service information website in cases where the entity participates in electronic transactions with the State Treasury (the entity accesses and follows the instructions on the State Treasury's public service information website).

3. Submitting documents and receiving results through the National Public Service Portal.

Article 10. Control and Payment Documents

1. Legal Project Documents for BT Contracts

The contracting agency sends the legal project documents for BT contracts to the State Treasury (sent initially when transacting with the State Treasury or when there are changes, adjustments, or supplements) as follows:

a) Decision approving the BT project by the competent authority and any adjustment decisions for the BT project (if any) (original or certified true copy made by the contracting agency);

b) Signed BT contract and BT contract appendices (if any) (original or certified true copy made by the contracting agency);

c) Annual government investment plan assigned by the competent authority (original or certified true copy made by the contracting agency);

d) For payment of construction items or construction works under independent operation BT projects upon completion: confirmation document for completed construction items or construction works under independent operation BT projects according to construction laws (original or certified true copy made by the contracting agency).

2. Payment Documents

a) For payment of construction items or construction works under independent operation BT projects upon completion: audit report on the value of construction items or construction works under independent operation BT projects (original or certified true copy made by the contracting agency);

b) For payment after completion of BT projects: decision approving the final settlement of investment capital for completed BT projects (original or certified true copy made by the contracting agency);

c) Document from the authorized person approving the BT project determining interest costs for interest accrued after the audit date (original or certified true copy made by the contracting agency) for post-construction period interest payments after the audit date;

d) Payment request form of the contracting authority for the BT contract (Form No. 01 attached as an appendix to this Decree);

d) Withdrawal voucher (Form No. 02 Appendix attached to this Decree).

Section 3
SETTLEMENT OF INVESTMENT CAPITAL FOR COMPLETED BT PROJECT

Article 11. Final Settlement of Investment Capital for Completed BT Projects

1. The final settlement of investment capital for completed BT projects shall be carried out in accordance with the laws on public investment and the provisions of this Decree.

2. Principles for the settlement of investment capital for completed BT projects

a) Completed BT projects must undergo audit of the settlement report.

b) The final settlement of investment capital for completed BT projects is based on the decision approving the project, the provisions of the BT project contract, the final settlement report of investment capital for completed BT projects, and the document from the authorized person approving the BT project determining interest costs for interest accrued by the investor after the audit date.

Article 12. Agency Preparing the Final Settlement Report of Investment Capital for Completed BT Projects, Documents for Review and Approval of Final Settlement of Investment Capital for Completed BT Projects

1. The BT project enterprise or the investor (in case of not establishing a BT project enterprise) is the agency preparing the final settlement report of investment capital for completed BT projects and submitting the documents to the authorized person deciding on the approval of the final settlement and the agency responsible for reviewing the final settlement of investment capital for completed BT projects.

2. The documents for review and approval of the final settlement of investment capital for completed BT projects shall comply with the regulations on documents for review and approval of the final settlement of investment capital for completed public investment projects; in which the contract is the BT project contract and any appendices to the BT project contract (if any).

Chapter III
EXEMPTION FROM ENTERPRISE INCOME TAX,
INCOME TAX

Article 13. Exemption from Corporate Income Tax

1. Innovative start-up enterprises, scientific and technological organizations, innovation centers, and intermediary organizations supporting innovative start-ups (collectively referred to as enterprises) that generate income from innovative start-up activities occurring within Ho Chi Minh City shall be exempted from corporate income tax on such income.

Enterprises benefiting from the exemption of corporate income tax under this clause must comply with the preferential fields, criteria, conditions, and content of innovative start-up activities as prescribed by the People's Council of Ho Chi Minh City.

The exemption period is five years, calculated from the time when the enterprise generates corporate income tax payable from innovative start-up activities occurring within Ho Chi Minh City during the effective period of Resolution No. 98/2023/QH15. After the expiration of the effective period of Resolution No. 98/2023/QH15, if the exemption period under this clause has not yet ended, the enterprise shall continue to enjoy the exemption until the end of the exemption period.

In cases where enterprises are currently within the exemption period or are eligible for exemption under different conditions than those stipulated in this Decree, they may choose to benefit from the exemption under the different conditions or the exemption stipulated in this Decree for the remaining period.

2. During the effective period of Resolution No. 98/2023/QH15, organizations generating income from transferring capital contributions or rights to contribute capital to innovative start-up enterprises within Ho Chi Minh City shall be exempted from corporate income tax on such income.

Innovative start-up enterprises within Ho Chi Minh City specified in this clause must comply with the preferential fields, criteria, conditions, and content of innovative start-up activities as prescribed by the People's Council of Ho Chi Minh City.

Income from transferring capital or rights to contribute capital as stipulated in this clause refers to income obtained from transferring part or all of the capital or rights to contribute capital to innovative start-up enterprises within Ho Chi Minh City (including the sale of enterprises), excluding income from transferring shares, bonds, fund certificates, and other types of securities as prescribed.

In cases where a wholly-owned limited liability company owned by an organization is sold entirely through the transfer of capital tied to real estate, it shall declare and pay corporate income tax according to the activity of transferring real estate.

3. Where an enterprise engages in multiple production and business activities, the enterprise shall determine and account for income from activities exempted from tax under this Article in accordance with the provisions of the Corporate Income Tax Law.

4. Enterprises shall declare and pay taxes in accordance with the laws on tax administration.

Article 14. Exemption from Personal Income Tax

1. During the effective period of Resolution No. 98/2023/QH15, individuals generating income from transferring capital contributions or rights to contribute capital to innovative start-up enterprises within Ho Chi Minh City shall be exempted from personal income tax on such income.

Innovative start-up enterprises within Ho Chi Minh City specified in this clause must comply with the preferential fields, criteria, conditions, and content of innovative start-up activities as prescribed by the People's Council of Ho Chi Minh City.

Income from transferring capital or rights to contribute capital as stipulated in this clause refers to income obtained from transferring part or all of the capital or rights to contribute capital to innovative start-up enterprises within Ho Chi Minh City (including the sale of enterprises), excluding income from transferring shares, bonds, fund certificates, and other types of securities as prescribed.

In cases where an individual-owned enterprise is sold entirely through the transfer of capital tied to real estate, it shall declare and pay personal income tax according to the activity of transferring real estate.

2. The determination of income from transferring capital or rights to contribute capital and declaration to tax authorities shall be carried out in accordance with the laws on personal income tax and tax administration.

Chapter IV
RESPONSIBILITIES OF AUTHORITIES, ORGANIZATIONS, AND INDIVIDUALS

Article 15. Responsibilities of the Ministry of Finance

Coordinate with the People's Committee of Ho Chi Minh City to compile and report to the Prime Minister on difficulties encountered in implementing BOT projects as stipulated in this Decree.

Article 16. Responsibilities of the Ministry of Planning and Investment

Coordinate with the People's Committee of Ho Chi Minh City according to their assigned functions and tasks in implementing BOT projects as stipulated in Resolution No. 98/2023/QH15 and this Decree.

Article 17. Responsibilities of the Ministry of Construction

Guide difficulties related to construction investment costs for BT projects under the laws on construction investment.

Article 18. Responsibilities of the State Bank of Vietnam

Guide the State Bank of Vietnam branch in Ho Chi Minh City to provide average medium-term and long-term lending rates for the four commercial banks specified in point c, Clause 1, Article 3 of this Decree, based on the proposal of the People's Committee of Ho Chi Minh City.

Article 19. Responsibilities of the People's Council of Ho Chi Minh City

Issue a Resolution specifying the ceiling interest rate for borrowed capital after construction period, and the ceiling profit margin over equity of investors, at the session of the People's Council of Ho Chi Minh City as stipulated in Clause 1 and Clause 6, Article 4 of this Decree.

Article 20. Responsibilities of the People's Committee of Ho Chi Minh City

1. Organize the implementation of this Decree, ensuring compliance with the provisions of this Decree, Resolution No. 98/2023/QH15, construction laws, public investment laws, and state budget laws.

2. Issue a Decision specifying the interest rate for borrowed capital after the construction period corresponding to the term of the BOT contract and the principle for applying the ceiling interest rate for borrowed capital after the construction period as stipulated in Clause 3 and Clause 6, Article 4 of this Decree.

3. Report to the People's Council of Ho Chi Minh City on the allocation of public investment funds in the city's medium-term and annual investment plans to pay the BOT investor according to the provisions of the signed BOT contract and any supplementary agreements.

4. Coordinate with the State Bank of Vietnam to guide the State Bank of Vietnam branch in Ho Chi Minh City to provide average medium-term and long-term lending rates for organizations of the four commercial banks specified in point c, Clause 1, Article 3 of this Decree.

5. Coordinate with ministries and sectors to receive guidance and resolve any difficulties (if any) related to procedures and formalities for project establishment, review, approval, management, construction costs, quality, signing and managing BOT contracts.

Article 21. Responsibilities of the authority approving investment proposals and BOT projects

1. Shall be responsible for selecting the investment method of the BT project according to the BT contract; ensuring the effectiveness of investment and the effective use of public investment capital.

2. Monitor and evaluate the implementation of BT projects, the use of public investment capital to pay for BT projects and the investment effectiveness of BT projects.

Article 22. Responsibilities of the BOT project enterprise and investor

1. The BOT project enterprise or investor (in cases where a BOT project enterprise is not established) shall be responsible for performing the rights and obligations stipulated in the BOT contract and any supplementary agreements, as provided in this Decree, Resolution No. 98/2023/QH15, and relevant laws.

2. Coordinate with the agency signing the BT contract to complete payment documents and final settlement documents for completed BT projects.

Chapter V

IMPLEMENTING PROVISIONS

Article 23. Effectiveness of Implementation

1. This Decree takes effect from the date of issuance.

2. Provisions on exemption from corporate income tax and personal income tax as stipulated in Articles 13 and 14 of this Decree shall take effect from the date Resolution No. 98/2023/QH15 comes into force.

3. In cases where Resolution No. 98/2023/QH15 expires but the BOT contract was signed during its effective period and is still being implemented, the provisions of this Decree shall continue to apply.

4. Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, the People's Committee of Ho Chi Minh City, and related agencies, organizations, and individuals are responsible for implementing this Decree.

Form No. 01

OF THE CONTRACT SIGNING AUTHORITY

Based on the audit report on the value of construction items/projects under the BOT project completed or the decision approving the final settlement of the BOT project investment cost made by the competent authority.
Unit: VND

Respectfully submitted to: ...(supervisory and payment agency).

Project name, construction work: ...Investment project code ...

BT project enterprise (or BT investor in case no BT project enterprise is established):...

Contract signing authority: ...Agency registration number: ...

Based on BT contract No.: ... dated ... month...year..., BT contract annex No. ...dated...month...year (if any).

Value of construction item/project under the BOT project/BOT project completed

Cumulative value of construction works/sub-projects under the BT project/finished BT project proposed for payment: …VND.

Amount proposed for payment of construction works/sub-projects under the BT project/finished BT project: …VND.

Source of funds: …

Budget plan: …Year …

Abbreviation of the contract signing authority for BT contracts.

Cumulative value of construction item/project under the BOT project/BOT project completed that has been paid

Total amount proposed for payment in figures: …VND

-Retention money: ...

Where:

-Amount payable to beneficiary: ...

+ Domestic capital: ...

+ Foreign capital: ...

Beneficiary's name: ...

Beneficiary's account number: ... at: ...

Beneficiary's name: ... Beneficiary's account number: ... at ...

CERTIFIED BY THE AUDIT AND INSPECTION AUTHORITY

Capital

..., day ... month ... year ...

REPRESENTATIVE OF THE CONTRACT SIGNING AUTHORITY FOR BT CONTRACTS

(Signature, full name, position, stamp)

-Item, sub-item

Date of receipt of the payment application for investment capital: …

Form No. 02

Transfer

Account:...

Based on Payment Request Form No.: ... dated.../.../...

Taxpayer Code: ...

At Treasury: ...

Chapter Code
Payment to beneficiary

SUPERVISORY AND PAYMENT AGENCY

Date ... month ... year ...