Circular No. 169/2009/TT-BTC guiding the settlement of business loss subsidies for oil products in 2008

CIRCULAR

Guidelines for finalizing the settlement of losses from the sale of oil products in 2008

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Pursuant to the Decree No. 118/2008/NĐ-CP dated November 27, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Implementing the Prime Minister's directive as stated in the Government Office's Notification No. 172/TB-VPCP dated June 7, 2009, which announced the Prime Minister's conclusions on managing fuel prices;

To completely resolve the losses incurred by enterprises trading in petroleum products in 2008, the Ministry of Finance provides guidelines for finalizing the settlement of losses from the sale of oil products in 2008 as follows:

This technical regulation sets out technical requirements, testing methods, sampling procedures; management requirements; responsibilities of organizations and individuals producing, trading, and importing cigarettes.

1. Scope of application:

Enterprises that import petroleum products according to the quota assigned by the Ministry of Industry and Trade in 2008, sell imported oil products (diesel, gasoline, mazut) at state-set prices, and suffer losses from such sales.

II. SCOPE AND TIME PERIOD FOR APPLYING THE LOSS SUBSIDY POLICY:

- Losses from selling oil products imported by enterprises occurring from January 1, 2008 to December 31, 2008.

- Reconciling profits and losses among different types of oil products and between different periods of business operations within the year (including temporary imports for re-export profits).

- Excluding sales of domestically produced and processed oil products.

II. SPECIFIC PROVISIONS

1. Determination of the subsidy amount:

1.1 The subsidy amount for imported oil products sold in 2008 at each enterprise shall be determined as follows:

Subsidy amount = Cost value of oil products sold during the period + Business expenses of oil products sold during the period - Revenue from oil products sold during the period

* Cost value of oil products sold during the period = Quantity of oil products sold during the period x Average cost price of oil products sold during the period.

- Quantity of oil products sold during the period must be consistent with the enterprise's balance sheet of imports, exports, and inventory.

- Average cost price of oil products sold during the period is determined in accordance with the inventory accounting method registered with the tax authority.

The cost price of oil products sold during the period includes the loss rate as prescribed. Accounting for losses in the cost price is carried out in accordance with current regulations.

* Business expenses of oil products sold during the period include: sales expenses, management expenses of the enterprise, and financial results allocated to oil products sold during the period.

- The principle of allocating expenses to oil products sold during the period is based on production volume after deducting direct costs.

- Financial results are the difference between financial revenue and financial expenses related to the sale of oil products.

* Revenue from oil products sold during the period = Quantity of oil products sold during the period x Prescribed selling price of oil products during the period (excluding VAT and diesel fuel fee).

- Prescribed selling price of oil products during the period is the price set by the state for each period within the year.

- In cases where sales are made through general agents or agents, the commission rates are applied as follows:

+ Stage 1: From January 1, 2008 to July 21, 2008 (for mazut and gasoline); From January 1, 2008 to September 16, 2008 (for diesel), implemented according to Decision No. 0676/2004/QĐ-BTM dated May 31, 2004 of the Minister of Trade regarding agent fees for selling petroleum products.

+ Stage 2: After Stage 1 until December 31, 2008, implemented at the same rate as Stage 1.

1.2 Temporary advance subsidy amount:

The temporary advance subsidy amount for imported goods equals 95% of the losses incurred in 2008 from selling imported oil products.

2. Documentation and procedures:

Enterprises trading in petroleum products meeting the conditions specified in Section I above shall prepare and submit subsidy application documents to the Ministry of Finance (Enterprise Financial Department). The documents include:

- A letter requesting subsidies (attached with detailed calculation tables for each type of oil product).

- Annual financial report (including a report on losses from imported oil products incurred in 2008).

The enterprise is responsible for the accuracy and honesty of the documents.

3. Settlement of subsidies:

3.1 Accounting for subsidized losses: Enterprises shall record the government subsidy for losses from selling oil products in 2008 as government assistance revenue.

3.2 Based on the audit of the final settlement report of oil product losses in 2008 by the State Audit Agency, the Ministry of Finance will officially determine the subsidy amount according to this Circular, reducing 5% of management expenses calculated based on the revenue allocated to oil products in 2008 compared to 2007, and then provide the remaining subsidy amount.

If the temporarily advanced amount exceeds the final settlement subsidy amount, the enterprise trading in petroleum products must promptly repay the excess to the state budget, and the enterprise must bear interest penalties at 150% of the basic bank interest rate for the overdue state budget repayment.

III. IMPLEMENTATION ORGANIZATION

1. The Director of the Finance and Planning Department is responsible for guiding and supervising the implementation of this Circular.

This Circular replaces Circular No. 26/2009/TT-BTC dated February 6, 2009, guiding the finalization of the settlement of losses from the sale of oil products in 2008. Previous guidance documents on subsidizing losses from the sale of oil products that conflict with this Circular are abolished. During implementation, if there are difficulties, enterprises are advised to report to the Ministry of Finance for prompt resolution.

During implementation, if there are difficulties, enterprises are advised to report to the Ministry of Finance for prompt resolution./.