Circular No. 51/2001/TT-BTC guides the implementation of Decision No. 58/2001/QD-TTg dated April 24, 2001 of the Prime Minister on post-investment interest rate support.

CIRCULAR

Guidelines for Implementing Decision No. 58/2001/QĐ-TTg dated April 24, 2001 of the Prime Minister on Post-Investment Interest Rate Support

Implementing Decision No. 58/2001/QĐ-TTg dated April 24, 2001 of the Prime Minister on Post-Investment Interest Rate Support; after reaching consensus with the Development Support Fund, the Ministry of Finance provides guidelines as follows:

Regarding the subjects, conditions, and procedures to be eligible for post-investment interest rate support shall be carried out in accordance with the provisions of Decree No. 43/1999/NĐ-CP dated June 29, 1999 of the Government on State Investment Credit for Development.

In this Circular, the Ministry of Finance guides the scope and method of determining the level of post-investment interest rate support.

1. Scope of post-investment interest rate support

The scope of post-investment interest rate support includes projects that are entitled to investment incentives under current regulations of the Government on guiding the implementation of the Law on Encouraging Domestic Investment (amended), where the project investors borrow funds in Vietnamese dong and foreign currency from credit institutions operating legally in Vietnam for investment purposes, have completed and put into operation, and have repaid the borrowed capital.

Projects that have been supported with interest rates by investment funds or the state budget shall not be eligible for post-investment interest rate support from the Development Support Fund.

Project investors may only receive interest rate support within the total investment amount of the project.

2. Determining the level of post-investment interest rate support

2.1- Principles for determining and providing post-investment interest rate support

- Post-investment interest rate support is calculated for each project and provided to the project investor after they have repaid the loan (principal and interest) to the credit institution. Depending on the scale of the project, post-investment interest rate support will be provided once or twice a year.

- Project investors shall not be eligible for post-investment interest rate support for overdue debts or debts to be repaid during the extended repayment period. For loans repaid ahead of schedule, the level of post-investment interest rate support is calculated based on the actual borrowing period of the loan.

- For projects with debt moratoriums, the moratorium period shall not be included in the actual borrowing period for calculating post-investment interest rate support, and the maximum support period shall be equal to the loan term specified in the credit agreement.

2.2- Method for determining the level of post-investment interest rate support

a) For projects borrowing in Vietnamese dong:

b) For projects borrowing in foreign currency:

- The State's development investment credit interest rate used to calculate the level of post-investment interest rate support is the interest rate at the time of withdrawing the principal debt eligible for post-investment interest rate support.

- For foreign currency loans: the interest rate for considering post-investment interest rate support is the actual interest rate charged by credit institutions.

- Determining the level of post-investment interest rate support for projects borrowing in foreign currency is conducted in the original currency. Based on this, reference is made to the average exchange rate USD/VND on the inter-bank foreign exchange market or the cross-exchange rate for other foreign currencies/VND published by the State Bank of Vietnam at the time of disbursing the support funds to determine the level of post-investment interest rate support in Vietnamese dong for the project.

2.3- The actual borrowing period for calculating post-investment interest rate support is the duration (number of months converted to years) from the date of receiving the debt to the date when the principal debt within the limit is repaid to the credit institution.

a) Principles for determination:

- The actual borrowing period for post-investment interest rate support is determined based on the date of receiving the loan recorded on the promissory note and the date of repaying the principal debt recorded on the repayment voucher (number of months converted to years) of the project investor to the credit institution.

- The first repayment date of the principal debt within the limit is compared with the disbursement date of the initial loan amount to calculate the actual borrowing period of the first principal debt repayment and based on this, the subsequent principal debt repayments are calculated retrospectively.

b) Method for determination:

Calculation of the actual borrowing period for post-investment interest rate support for the following cases:

- One-time disbursement of funds repaid in one installment;

- One-time disbursement of funds repaid in multiple installments;

- Multiple disbursements of funds repaid in one installment;

(see Appendices 1 and 2 attached).

3- Accounting Treatment

3.1. For the Development Support Fund:

The accounting treatment and monitoring of post-investment interest rate support for projects by the Development Support Fund shall be carried out in accordance with the provisions of Decision No. 162/1999/QĐ-BTC dated December 24, 1999 of the Minister of Finance on the Accounting System for the Development Support Fund.

3.2For Project Investors

Upon receipt of the post-investment interest rate support grant, the project owner shall account for reducing production and business costs for the period.

4- Implementation Organization

This Circular takes effect from the date of issuance. The calculation of post-investment interest rate support from January 1, 2001 onwards shall be implemented according to the provisions of Decision No. 58/2001/QĐ-TTg and the guidelines set forth in this Circular.

Any difficulties encountered during implementation should be reported to the Ministry of Finance for study and resolution./.

 

ANNEX 1:

(Attached to Circular No. 51/2001/TT-BTC dated June 28, 2001 of the Ministry of Finance)

Calculating the actual borrowing period for post-investment interest rate support for the following cases:

(1) One-time disbursement of funds repaid in one installment:

Example 1: Project A: borrows VND 200 million, withdraws funds on November 1, 1999, and repays the debt on March 1, 2000, the actual borrowing period is 4 months.

(2) One-time disbursement of funds repaid in multiple different installments:

Example 2: Project B: borrows VND 200 million, withdraws funds on November 1, 1999, and repays the debt in two installments: VND 100 million on March 1, 2000, and VND 100 million on June 16, 2000, the actual borrowing period:

+ First repayment installment is 4 months

+ Second repayment installment is 7.5 months (7 months + 15 days/30).

Example 3: Project C: - First withdrawal: VND 250 million on November 1, 1999; second withdrawal: VND 250 million on February 1, 2000.

First repayment: VND 200 million on June 1, 2000; second repayment: VND 100 million on September 10, 2000.

Actual borrowing period:

+ First repayment installment (VND 200 million): 7 months;

+ Second repayment installment of the first withdrawal (VND 50 million): 10.33 months (10 months + 10 days/30);

+ Second repayment installment of the second withdrawal: 7.33 months (7 months + 10 days/30).

(3) The amount of disbursed capital repaid in one time:

Example 4: Project D: Withdrawal of the first capital amount of 100 million VND on November 1, 1999; the second withdrawal of 100 million VND on March 20, 2000, and repayment on September 1, 2000 of 200 million VND.

Actual borrowing period:

+ The first capital withdrawal for 10 months;

+ The second capital withdrawal for 5.33 months (5 months + 10 days/30).

Example 5: Project E: First withdrawal: 100 million VND on November 1, 1999; second withdrawal: 100 million VND on March 15, 2000; third withdrawal: 100 million VND on June 1, 2000.

Repayment: the first repayment of 250 million VND on September 1, 2000.

Actual borrowing period:

+ The first capital withdrawal for 10 months;

+ The second capital withdrawal for 5.5 months (5 months + 15 days/30);

+ The third capital withdrawal for 3 months.

ANNEX 2:

(Attached to Circular No. 51/2001/TT-BTC dated June 28, 2001 of the Ministry of Finance)

Determining the level of interest rate support after investment for the following cases:

Assumption: The enterprise borrows from the bank with a capital of 1.2 billion VND; Interest rate in 1999: 0.9%/month; In 2000: 0.81%/month. Repayment quarterly, each quarter: 100 million VND. Start repayment from the first quarter (March 2000). Loan term: 37 months; Grace period: 4 months; Interest rate of TDĐTPT in 1999 is 9.72%, in 2000 is 7%/year; And for simplicity in calculation, it is assumed that all withdrawals or repayments are made on the first day of the month.

Disbursement: First time (November 1, 1999): 350 million VND; Second time (February 1, 2000): 450 million VND; Third time (August 1, 2000): 60 million VND; Fourth time (October 1, 2000): 340 million VND.

Year 2000: 11,1375 million VND

First quarter (March 1, 2000) repayment for the first disbursement: 100 million VND x 4.86% x 4/12 = 1.62 million VND

Second quarter (June 1, 2000) repayment for the first disbursement: 100 million VND x 4.86% x 7/12 = 2.835 million VND

Third quarter (September 1, 2000) repayment for the first disbursement: 100 million VND x 4.86% x 10/12 = 4.05 million VND

Fourth quarter (December 1, 2000): + Repayment for the first disbursement: 50 million VND x 4.86% x 13/12 = 2.6325 million VND

+ Repayment for the second disbursement: 50 million VND x 3.5% x 10/12 = 1.45 million VND

Year 2001: 20.38 million VND

First quarter (March 1, 2001) repayment for the second disbursement: 100 million VND x 3.5% x 13/12 = 3.78 million VND

Second quarter (June 1, 2001) repayment for the second disbursement: 100 million VND x 3.5% x 16/12 = 4.66 million VND

Third quarter (September 1, 2001) repayment for the second disbursement: 100 million VND x 3.5% x 19/12 = 5.53 million VND

Fourth quarter (December 1, 2001) repayment for the second disbursement: 100 million VND x 3.5% x 22/12 = 6.41 million VND

Year 2002: 25.48 million VND

First quarter (March 1, 2002): + Repayment for the third disbursement: 60 million VND x 3.5% x 19/12 = 3.32 million VND

+ Repayment for the fourth disbursement: 40 million VND x 3.5% x 17/12 = 1.99 million VND

Second quarter (June 1, 2002) repayment for the fourth disbursement: 100 million VND x 3.5% x 20/12 = 5.85 million VND

Third quarter (September 1, 2002) repayment for the fourth disbursement: 100 million VND x 3.5% x 23/12 = 6.72 million VND

Fourth quarter (December 1, 2002) repayment for the fourth disbursement: 100 million VND x 3.5% x 26/12 = 7.6 million VND

The level of interest rate support for the entire project: M entire project = M2000 + M2001 + M2002

M entire project = 11.1375 + 20.38 + 25.48 = 56.9975 million VND