Circular No. 23/2020/TT-BTC on advance payments and borrowing from the state treasury of the state budget

CIRCULAR

Regulations on Advance Payments and Borrowing from State Treasury Funds of the State Budget

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

Pursuant to the Law on Public Debt Management dated November 23, 2017;

Pursuant to Decree No. 163/2016/NĐ-CP dated December 21, 2016 of the Government detailing the implementation of certain provisions of the Law on State Budget;

Pursuant to Decree No. 24/2016/NĐ-CP dated April 5, 2016 of the Government stipulating the management regime for state treasury funds;

Pursuant to Decree No. 87/2017/NĐ-CP dated July 26, 2017 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

At the proposal of the General Director of the State Treasury;

The Minister of Finance promulgates this Circular regulating advance payments and borrowing from state treasury funds of the state budget.

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular regulates advance payments from state treasury funds of the central budget and provincial budgets; borrowing from state treasury funds of the central budget.

Article 2. Applicability

1. The Ministry of Finance.

2. People's Committees of provinces and centrally governed cities (hereinafter referred to as provincial People's Committee).

3. State Treasury.

4. Provincial State Treasuries (hereinafter referred to as provincial State Treasury).

5. Departments of Finance of provinces and centrally governed cities (hereinafter referred to as Department of Finance).

6. Relevant agencies, organizations, and individuals related to advance payments and borrowing from state treasury funds of the state budget.

Article 3. Purpose of Advance Payments and Borrowing from State Treasury Funds

1. For the central budget:

a) Advance payment from state treasury funds to address temporary shortfalls in the central budget fund.

b) Borrowing from state treasury funds to offset the central budget deficit for development investment within the annual limit set by the National Assembly.

c) Borrowing from state treasury funds to repay the principal of loans taken by the central budget within the annual limit set by the National Assembly for repayment of the principal of the central budget debt.

2. For provincial budgets: advance payment from state treasury funds to address temporary shortfalls in provincial budget funds.

Article 4. Principles of Advance Payments and Borrowing from State Treasury Funds of the State Budget

1. Advance payments and lending to the state budget from state treasury funds shall only be carried out within the capacity of temporarily idle state treasury funds; ensuring that it does not affect the State Treasury's ability to make payments and disbursements and adhering to the temporary idle state treasury funds advance payment limit for the state budget stipulated in Circular No. 314/2016/TT-BTC dated November 28, 2016 of the Ministry of Finance guiding certain provisions of Decree No. 24/2016/NĐ-CP dated April 5, 2016 of the Government stipulating the management regime for state treasury funds, and shall be implemented in the following priority order:

a) Advance payment and lending to the central budget from state treasury funds.

b) Advance payment to provincial budgets from state treasury funds.

2. All advance payments from state treasury funds to address temporary shortfalls in the central budget fund and provincial budget funds must be fully repaid by no later than December 31 of the year in which the advance payment from state treasury funds was made; at the same time, no extension shall be granted.

3. Advance payments and lending to the central budget from state treasury funds shall be conducted at the State Treasury; advance payments from state treasury funds to provincial budgets shall be conducted at provincial State Treasuries.

Chapter II

SPECIFIC PROVISIONS

Section 1

ADVANCE PAYMENTS FROM STATE TREASURY FUNDS

Article 5. Conditions for Temporary Advance of State Treasury Funds

1. In cases where the central government budget fund or provincial government budget fund experiences temporary deficits, they may temporarily advance state treasury funds.

2. The provincial government budget that requests a temporary advance of state treasury funds must meet the following conditions:

a) There is no overdue temporary advance of state treasury funds at the time of requesting the advance.

b) There is a document approving the temporary advance of state treasury funds to address the temporary deficit of the provincial government budget fund, issued by the Standing Committee of the Provincial People's Council (the Standing Committee of the Provincial People's Council is responsible for reporting to the Provincial People's Council at the nearest session).

c) The amount requested for the temporary advance does not exceed the maximum level of temporary advance of state treasury funds prescribed in Clause 2, Article 6 of this Circular.

Article 6. Level of Temporary Advance of State Treasury Funds

1. The level of temporary advance of state treasury funds for the central government budget to address the temporary deficit of the central government budget fund shall be decided by the Minister of Finance within the scope of temporarily idle state treasury funds in the quarter.

2. The maximum level of temporary advance of state treasury funds to address the temporary deficit of the provincial government budget fund shall not exceed the remaining portion of the local government budget expenditure plan allocated by the Ministry of Finance to each locality at the time of requesting the temporary advance of state treasury funds; meanwhile, it shall not be included in the level of local government budget debt as stipulated in Clause 6, Article 7 of the State Budget Law.

Article 7. Procedures and Formalities for Temporary Advance of State Treasury Funds for the Central Government Budget

1. When there is a need for a temporary advance of state treasury funds, the State Treasury Department of the Ministry of Finance (hereinafter referred to as the State Treasury Department) shall issue a document requesting a temporary advance of state treasury funds to the State Treasury, clearly stating the amount requested for the advance and the repayment period.

2. Based on the document from the State Treasury Department and the availability of temporarily idle state treasury funds, the State Treasury shall report to the Minister of Finance to decide on the temporary advance of state treasury funds for the central government budget, including the level of the advance and the repayment period for the temporary advance of state treasury funds.

3. Based on the Decision on Temporary Advance of State Treasury Funds for the Central Government Budget issued by the Minister of Finance, the State Treasury Department shall prepare two copies of the Temporary Advance State Treasury Withdrawal Form (Form 03/TU issued together with this Circular) to send to the State Treasury to implement the temporary advance of state treasury funds for the central government budget.

Article 8. Procedures and Formalities for Temporary Advance of State Treasury Funds for the Provincial Government Budget

1. When there is a need for a temporary advance of state treasury funds, the provincial people's committee shall prepare a request for a temporary advance of state treasury funds to submit to the Ministry of Finance (State Treasury), including:

a) A document requesting a temporary advance of state treasury funds from the provincial people's committee, clearly stating: the amount requested for the advance; the repayment period; the source of funds for repayment; the implementation status of the local government budget expenditure plan up to the time of requesting the temporary advance of state treasury funds (including: the amount of the local government budget expenditure plan allocated by the Minister of Finance, the amount already implemented, the remaining amount); commitment to fully and timely repay the temporary advance of state treasury funds.

b) A document approving the temporary advance of state treasury funds issued by the Standing Committee of the Provincial People's Council.

2. Within fifteen working days from the date of receiving a complete and valid request for a temporary advance of state treasury funds from the provincial people's committee, based on the availability of temporarily idle state treasury funds, the State Treasury shall take the lead and coordinate with the State Treasury Department to report to the Minister of Finance regarding the temporary advance of state treasury funds for the provincial government budget.

3. If the temporary advance of state treasury funds is approved, the Minister of Finance shall issue a Decision on Temporary Advance of State Treasury Funds for the Provincial Government Budget, specifying the level of the advance and the repayment period for the temporary advance of state treasury funds.

If the temporary advance of state treasury funds is not approved, the Minister of Finance shall issue a document responding to the provincial people's committee.

4. Withdrawal of Funds at the Provincial State Treasury

a) Based on the Decision on Temporary Advance of State Treasury Funds for the Provincial Government Budget and the need to use the temporarily advanced funds, the Department of Finance shall prepare two copies of the Temporary Advance State Treasury Withdrawal Form (Form 03/DP issued together with this Circular) to send to the Provincial State Treasury.

b) The withdrawal of temporarily advanced state treasury funds shall be carried out when meeting the following conditions:

- The amount requested for withdrawal and the cumulative amount withdrawn (if any) must be within the level of temporary advance of state treasury funds decided by the Minister of Finance.

- The withdrawal period for temporarily advanced state treasury funds complies with the provisions of Clause 2, Article 9 of this Circular.

c) If the request for withdrawal of temporarily advanced state treasury funds from the Department of Finance does not comply with the provisions of point a and point b of this clause, the Provincial State Treasury shall issue a document responding to the Department of Finance; simultaneously, report to the provincial people's committee and the State Treasury.

Article 9. Time limit for repayment of advance payments and withdrawal of state reserve funds

1. The time limit for repaying advance payments from the state reserve fund to the state budget shall be decided by the Minister of Finance, ensuring that it is no later than December 31 of the year in which the advance payment from the state reserve fund was made.

2. The time limit for withdrawing funds for advance payments from the state reserve fund shall be no later than December 20 of the year in which the advance payment from the state reserve fund was made. After this deadline, the advance payment from the state reserve fund will expire and be canceled.

Article 10. Repayment of advance payments from the state reserve fund and handling of overdue advance payments from the state reserve fund

1. For the central budget

a) At least ten working days before the due date for repayment of the advance payment from the state reserve fund, the State Treasury shall send a written notice to the State Budget Department regarding the due date for repayment of the advance payment from the state reserve fund; the notice shall clearly specify the repayment period, the amount to be repaid, and the remaining costs of using the state reserve fund.

b) Based on the Decision of the Minister of Finance approving the advance payment from the state reserve fund for the central budget, the State Budget Department shall allocate the central budget resources to fully repay the advance payment from the state reserve fund on time.

c) An advance payment from the state reserve fund that is not fully repaid within the specified period shall be considered overdue and must bear the cost of using the state reserve fund beyond the due date as stipulated in Clause 2, Article 16 of this Circular.

2. For provincial budgets

a) At least ten working days before the due date for repayment, the provincial State Treasury shall send a written notice to the Provincial Department of Finance; at the same time, report to the provincial People's Committee about the due date for repayment of the advance payment from the state reserve fund; the notice shall clearly specify the repayment period, the amount to be repaid, and the remaining costs of using the state reserve fund; if the advance payment from the state reserve fund for the provincial budget is not fully repaid by the due date, the provincial State Treasury shall implement measures to recover the advance payment according to the provisions of point c of this clause.

b) Based on the Decision of the Minister of Finance approving the advance payment from the state reserve fund for the provincial budget, the Provincial Department of Finance shall report to the provincial People's Committee to allocate budget resources to fully repay the advance payment on time.

c) If the advance payment from the state reserve fund for the provincial budget is not fully repaid by the due date, it shall be considered overdue and must bear the cost of using the state reserve fund beyond the due date as stipulated in Clause 2, Article 16 of this Circular. The procedures for handling overdue advance payments from the state reserve fund for the provincial budget shall be carried out as follows:

- Within ten working days after the due date for repayment, if the advance payment from the state reserve fund has not been fully repaid, the provincial State Treasury shall deduct from the provincial budget reserve to recover the advance payment from the state reserve fund, collect the cost of using the state reserve fund (including both within and beyond the due date). In cases where the deduction does not fully recover the advance payment as required, the provincial State Treasury shall immediately deduct again from the provincial budget reserve upon availability to fully recover the advance payment from the state reserve fund, collect the cost of using the state reserve fund (including both within and beyond the due date).

- After deducting from the provincial budget reserve, the provincial State Treasury shall notify the Provincial Department of Finance, report to the provincial People's Committee; simultaneously, report to the State Treasury to report to the Ministry of Finance about the deduction from the provincial budget reserve to recover the overdue advance payment from the state reserve fund, collect the cost of using the state reserve fund (including both within and beyond the due date).

Section 2

BORROWING OF THE STATE RESERVE FUND BY THE CENTRAL BUDGET

Article 11. Level of Borrowing from State Treasury Reserve

The level of borrowing from the state treasury reserve of the central budget must be within the scope of the annual state budget estimate for borrowing to offset the deficit or borrowing to repay the principal of the central budget as decided by the National Assembly.

Article 12. Procedures and Formalities for Borrowing from State Treasury Reserve

1. When there is a need to borrow from the state treasury reserve, the State Budget Department shall issue a request for borrowing from the state treasury reserve to the State Treasury; specifying clearly the amount borrowed, purpose of borrowing, term of borrowing, and repayment period for the borrowed state treasury reserve.

2. Based on the document from the State Budget Department and the temporary idle capacity of the state treasury reserve, the State Treasury shall report to the Minister of Finance for approval of the central budget to borrow from the state treasury reserve, including: the amount borrowed, purpose of borrowing, term of borrowing, and repayment period for the borrowed state treasury reserve.

3. Based on the approval document of the Minister of Finance, the State Treasury and the State Budget Department shall sign a Loan Agreement for Borrowing from the State Treasury Reserve (in accordance with Model 01 issued together with this Circular).

4. Based on the Loan Agreement for Borrowing from the State Treasury Reserve, the State Budget Department shall prepare two copies of the Withdrawal Notice for Borrowing from the State Treasury Reserve (in accordance with Model 04 issued together with this Circular) to send to the State Treasury for implementation.

Article 13. Term of Borrowing and Withdrawal Period for Borrowing from State Treasury Reserve

1. The term of borrowing from the state treasury reserve of the central budget shall be decided by the Ministry of Finance, not exceeding 12 months from the date the Loan Agreement for Borrowing from the State Treasury Reserve becomes effective.

2. The withdrawal period for borrowed state treasury reserve amounts shall be no later than December 31 of the year in which the borrowing occurred. After this deadline, the borrowed state treasury reserve amount will expire and be canceled.

Article 14. Repayment of Borrowed State Treasury Reserve Amounts and Handling of Overdue Borrowed State Treasury Reserve Amounts

1. At least 30 working days before the due date for repayment of the borrowed state treasury reserve amount, the State Treasury shall issue a document to the State Budget Department to notify about the due date for repayment of the borrowed state treasury reserve amount; specifying clearly the repayment deadline, the amount to be repaid, and the remaining cost of using the state treasury reserve.

2. Based on the Loan Agreement for Borrowing from the State Treasury Reserve, the State Budget Department shall allocate the central budget resources to fully and timely repay the borrowed state treasury reserve amount.

3. If the borrowed state treasury reserve amount of the central budget is not fully and timely repaid and not approved for extension by the Minister of Finance, it shall be considered overdue and subject to the cost of using the state treasury reserve beyond the due date as stipulated in Clause 2, Article 16 of this Circular.

Article 15. Extension of Borrowed State Treasury Reserve Amounts

1. In cases where the central budget has difficulties in allocating resources to repay the borrowed state treasury reserve amount, the borrowed state treasury reserve amount may be considered for extension.

2. The maximum extension period shall not exceed 12 months, starting from the repayment due date specified in the Loan Agreement for Borrowing from the State Treasury Reserve.

3. Procedures for Extending Borrowed State Treasury Reserve Amounts:

a) At least 20 working days before the due date for repayment of the borrowed state treasury reserve amount, the State Budget Department shall issue a request for extending the borrowed state treasury reserve amount to the State Treasury.

b) Based on the document from the State Budget Department and the temporary idle capacity of the state treasury reserve, the State Treasury shall report to the Minister of Finance for approval to extend the borrowed state treasury reserve amount of the central budget.

c) Based on the approval document of the Minister of Finance, the State Treasury shall cooperate with the State Budget Department to sign an Annex to the Loan Agreement for Borrowing from the State Treasury Reserve (in accordance with Model 02 issued together with this Circular).

Section 3

COST OF USING THE STATE TREASURY RESERVE AND COST OF USING THE STATE TREASURY RESERVE BEYOND THE DUE DATE

COST OF USING THE STATE TREASURY RESERVE AND COST OF USING THE STATE TREASURY RESERVE BEYOND THE DUE DATE

Article 16. Costs of using state treasury funds and overdue costs of using state treasury funds

1. Costs of using state treasury funds

The central budget when temporarily borrowing or borrowing state treasury funds and the provincial budget when temporarily borrowing state treasury funds shall be responsible for paying to the State Treasury on a monthly basis the cost of using state treasury funds at a rate of 0.10% per month (based on a month with 30 days) no later than the 10th day of the following month. Specifically, the cost of using state treasury funds for the month when the temporary borrowing or borrowing of state treasury funds is due for repayment shall be paid to the State Treasury simultaneously with the repayment of the temporary borrowing or borrowing of state treasury funds. The cost of using state treasury funds is determined as follows:

 

In which, the actual number of days of temporary borrowing or borrowing in the month (including holidays and public holidays) is calculated from the date of withdrawal (for the first period of calculating the cost of using state treasury funds) or the first day of the month (for subsequent periods of calculating the cost of using state treasury funds) to the last day of the month for calculating the cost of using state treasury funds or the day immediately preceding the repayment date of the temporary borrowing or borrowing of state treasury funds (for the final period of calculating the cost of using state treasury funds).

2. Overdue costs of using the state treasury

In case the temporary borrowing or borrowing of state treasury funds of the central budget, the temporary borrowing of state treasury funds of the provincial budget exceeds the repayment deadline, the central budget and the provincial budget shall be responsible for paying the overdue cost of using state treasury funds at a rate of 150% of the cost of using state treasury funds specified in Clause 1 of this Article. The overdue cost of using state treasury funds is paid once to the State Treasury upon recovery of the overdue temporary borrowing or borrowing of state treasury funds and is determined as follows:

In which, the number of overdue days of temporary borrowing or borrowing (including holidays and public holidays) is calculated from the due date of repayment of the temporary borrowing or borrowing of state treasury funds that has not been repaid until the day immediately preceding the actual repayment date of the overdue temporary borrowing or borrowing.

3. In case the borrowing of state treasury funds of the central budget has exceeded the deadline but has been extended by the Ministry of Finance, it shall not be considered as overdue borrowing of state treasury funds and shall apply the cost of using state treasury funds specified in Clause 1 of this Article until the end of the extended period.

Section 4

ACCOUNTING AND REPORTING REGIME

Article 17. Accounting entries

1. Temporary borrowings, borrowings of state treasury funds; repayments of temporary borrowings, borrowings of state treasury funds; extensions of borrowings of state treasury funds shall be recorded according to the state budget accounting regime.

2. Revenue from the costs of using state treasury funds and the costs of using overdue state treasury funds shall be recorded and consolidated into the operational revenue and expenditure of the State Treasury according to the financial mechanism of the State Treasury prescribed by the Prime Minister.

Article 18. Reporting System

1. For the State Treasury: periodically every six months (no later than June 22 and December 22), the State Treasury reports to the Ministry of Finance to report to the Prime Minister the situation of temporary borrowings and lending of state treasury funds.

2. For the provincial State Treasury: periodically every six months (no later than June 18 and December 18), the provincial State Treasury reports to the State Treasury the situation of temporary borrowings of state treasury funds for the provincial budget according to Model 05 issued together with this Circular.

Chapter III

IMPLEMENTATION

Article 19. Duties, powers, and responsibilities of agencies, organizations, and individuals related to the temporary advance and borrowing of state budget funds

1. The Minister of Finance

a) Decides on the temporary advances, loans, and extensions of loan periods for central government budgets from the state budget fund.

b) Decides on the temporary advances of state budget funds for provincial budgets.

2. The State Budget Department

a) Prepares the application for temporary advances, loans, and extensions of loan periods for central government budgets from the state budget fund.

b) Signs the Loan Contract with the National Treasury after the Minister of Finance approves the loan period for central government budgets from the state budget fund.

c) Allocates the central government budget sources to fully and timely repay the temporary advances and loans from the state budget fund.

d) Cooperates with the National Treasury to report to the Minister of Finance on decisions regarding temporary advances of state budget funds for provincial budgets.

3. Provincial People's Committees

a) Prepares the application for temporary advances of state budget funds; bears responsibility for the authenticity of information in the application for temporary advances of state budget funds.

b) Directs the Provincial Finance Departments to repay the temporary advances of state budget funds, pay the costs of using state budget funds, and overdue costs of using state budget funds (if any) as prescribed.

4. Provincial Finance Departments

a) Advises the provincial People's Committees on temporary advances, repayment of temporary advances, and costs of using state budget funds for provincial budgets as prescribed.

b) Implements withdrawals of temporary advances, repayments of temporary advances, payments of costs of using state budget funds, and overdue costs of using state budget funds (if any) in accordance with this Circular.

5. The National Treasury

a) Takes the lead in reporting to the Minister of Finance on decisions regarding temporary advances, loans, and extensions of loan periods for central government budgets from the state budget fund.

b) Takes the lead and cooperates with the State Budget Department to report to the Minister of Finance on decisions regarding temporary advances of state budget funds for provincial budgets.

c) Signs the Loan Contract with the State Budget Department after the Minister of Finance approves the loan period for central government budgets from the state budget fund.

d) Calculates the costs of using state budget funds, overdue costs of using state budget funds (if any) for the central government budget, and notifies the State Budget Department to implement payment according to regulations.

6. Provincial National Treasuries

a) Implements withdrawals of temporary advances of state budget funds for provincial budgets in accordance with Clause 4, Article 8 of this Circular.

b) Calculates the costs of using state budget funds for provincial budgets and notifies the Provincial Finance Departments no later than the fifth day of the month following the month when the provincial budget must pay the costs of using state budget funds.

c) Implements procedures to handle overdue temporary advances of state budget funds that have not been repaid in accordance with Point c, Clause 2, Article 10 of this Circular.

Article 20. Transitional Provisions

1. Loans of state budget funds for the central government budget approved before this Circular takes effect shall be implemented according to existing Loan Contracts; in cases where an extension is requested after this Circular takes effect, the provisions of Articles 15 and 16 of this Circular shall apply.

2. Temporary advances of state budget funds for provincial budgets approved before this Circular takes effect but withdrawn after it takes effect shall continue to apply the provisions on withdrawing temporary advances of state budget funds in Circular No. 30/2017/TT-BTC dated April 18, 2017, of the Ministry of Finance on temporary advances of state budget funds for the national budget; in which, temporary advances of state budget funds with extended periods beyond the fiscal year shall be maintained until the end of the temporary advance period as decided by the Minister of Finance and shall not be extended. In case the temporary advance of state budget funds is not fully repaid upon maturity, the provisions of Point c, Clause 2, Article 10 of this Circular shall apply.

3. Temporary advances of state budget funds for provincial budgets to implement projects under the central government budget expenditure program that have exceeded the repayment deadline due to the central government not having allocated funds to repay the temporary advances of state budget funds shall not be considered overdue temporary advances of state budget funds when examining the conditions for provincial budgets to temporarily advance state budget funds as prescribed in Clause 2, Article 5 of this Circular.

Article 21. Effective Date

1. This Circular takes effect from June 1, 2020.

2. This Circular replaces Circular No. 30/2017/TT-BTC dated April 18, 2017, of the Ministry of Finance on temporary advances of state budget funds for the national budget; Circular No. 06/2018/TT-BTC dated January 24, 2018, of the Ministry of Finance amending and supplementing certain articles of Circular No. 30/2017/TT-BTC; and Circular No. 12/2019/TT-BTC dated March 13, 2019, of the Ministry of Finance on costs of using state budget funds for the national budget.

3. In cases where the legal normative documents cited for application in this Circular are amended, supplemented, or replaced, they shall be implemented according to the provisions of the amended, supplemented, or replacing documents.

4. During implementation, if there are difficulties, organizations and individuals are advised to promptly reflect them to the Ministry of Finance for consideration and specific guidance.

                                                                                                                             KT. MINISTER

                                                                                                                           Vice Minister

                                                                                                                                  (Signed)

                                                                                                                          Do Hoang Anh Tuan