Circular No. 115/1999/TT-BTC guides the trading of government bonds between organizations permitted to trade government bonds and organizations or individuals.

CIRCULAR
OF THE MINISTRY OF FINANCE NUMBER 115/1999/TT-BTC SEPTEMBER 24, 1999
GUIDELINES FOR THE BUSINESS OF PURCHASING AND SELLING GOVERNMENT SECURITIES BETWEEN
LICENSED ORGANIZATIONS ENGAGED IN THE BUSINESS OF GOVERNMENT SECURITIES AND ORGANIZATIONS AND INDIVIDUALS

Pursuant to Ordinance No. 12/1999/UBTVQH10 dated April 27, 1999 on the issuance of government bonds for national construction;

Pursuant to Decree No. 34/1999/NĐ-CP dated May 12, 1999 of the Government on the issuance of government securities for national construction in 1999;

Pursuant to the Law on Corporate Income Tax No. 03/1997/QH9 dated May 10, 1997;

To facilitate the business of purchasing and selling government securities between organizations engaged in the business of government securities and organizations and individuals, ensuring the rights and legitimate interests of all parties, especially those who own government securities, the Ministry of Finance hereby provides specific guidelines as follows:

I/ GENERAL PROVISIONS:

Article 1- This Circular guides the business of government securities by organizations permitted to engage in such business.

Organizations without the function of engaging in the business of government securities are not allowed to participate in the business of government securities under any form. For government securities currently owned that were directly purchased from the State Treasury during the issuance period, organizations without the function of engaging in the business of government securities may only sell government securities when necessary.

Article 2- Organizations permitted to engage in the business of government securities as stipulated in this Circular include:

- Credit institutions that are Vietnamese legal entities operating under the Law on Credit Institutions;

- Securities companies established in accordance with the provisions of the law.

Article 3- Organizations engaged in the business of government securities must separately monitor and account for their activities in the business of government securities and have the obligation to pay taxes to the state budget in accordance with the provisions of this Circular.

Article 4- Organizations engaged in the business of government securities are subject to inspection and supervision by financial authorities and specialized state management agencies over their business activities in accordance with the provisions of the law.

II/ SPECIFIC PROVISIONS:

Article 1- Organizations within the scope of being permitted to engage in the business of government securities do not need to obtain permission from state management agencies when conducting business activities in government securities.

Article 2- During the process of engaging in the business of government securities, organizations engaged in the business of government securities must publicly announce the purchase and sale prices of government securities and must conduct purchases and sales at the announced prices.

For government bonds purchased less than 12 months from the issuance date indicated on the bond, the minimum purchase price shall not be lower than 90% of the face value indicated on the bond.

For government securities with a purchase period of 12 months or more from the date of issuance indicated on the security, the purchase price of the government security shall be determined based on the face value of the government security and accrued interest up to the time of purchase and must be greater than the face value of the government security.

Article 3- Organizations engaged in the business of government securities must open accounting books to monitor and separately account for their activities in purchasing and selling government securities.

Article 4- Organizations engaged in the business of government securities have the obligation to pay corporate income tax in accordance with the Corporate Income Tax Law and current legal documents. The determination of taxable income in each case is as follows:

a/ For income derived from the purchase and sale of government securities in business operations, if there is any taxable income, it is determined as follows:

b/ For income derived from government securities purchased and paid directly to the State Treasury upon maturity (after five years) or paid early, corporate income tax (if applicable) must also be paid. Taxable income is determined as follows:

Article 5- For government securities that organizations engaged in the business of government securities have purchased before this Circular takes effect, when selling these government securities, they must declare and pay corporate income tax (if applicable) according to regulations, and the purchase price for determining the tax is the actual purchase price implemented.

Article 6- Strictly prohibited are organizations and individuals engaging in speculation in the business of government securities, causing market disruption, and artificially affecting the increase or decrease in the purchase and sale prices of government securities.

Article 7- If organizations engaged in the business of government securities purchase government securities at a price lower than the minimum price specified in Clause 2, Section II of this Circular, the difference amount must be collected and paid into the state budget. In case of recurrence, the organization engaged in the business of government securities will be permanently suspended from engaging in the business of government securities.

III/ IMPLEMENTATION PROVISIONS:

Article 1- This Circular takes effect from the date of signature. Government securities purchased for the first time from the State Treasury by organizations engaged in the business of government securities are not within the scope of regulation of this Circular.

Article 2- Credit institutions engaged in the business of government securities are responsible for complying with the provisions of this Circular and related guidance documents issued by the State Bank of Vietnam.

Article 3- During the implementation process, if encountering difficulties or obstacles, please promptly reflect them to the Ministry of Finance for research and resolution.