Circular No. 59/2001/TT-BTC guides the implementation of financial policies applicable to border economic zones.

CIRCULAR

OF THE MINISTRY OF FINANCE NUMBER 59/2001/TT-BTC ON JULY 17, 2001 GUIDING THE IMPLEMENTATION OF FINANCIAL POLICIES APPLICABLE
TO BORDER GATE ECONOMIC ZONES

Pursuant to Decision No. 53/2001/QĐ-TTg dated April 19, 2001 of the Prime Minister on policies for border gate economic zones, the Ministry of Finance guides the implementation of financial policies applicable to border gate economic zones as follows:

PART I: SCOPE AND OBJECTS OF APPLICATION

Article 1. Scope of Application:

According to Article 5 of Decision No. 53/2001/QĐ-TTg dated April 19, 2001 of the Prime Minister, the scope of application of this Circular is:

- Border gate economic zones that have been established according to separate Decisions of the Prime Minister before Decision No. 53/2001/QĐ-TTg takes effect.

- Border gate economic zones that will be established according to separate Decisions of the Prime Minister after Decision No. 53/2001/QĐ-TTg takes effect.

The provisions of this Circular shall not apply to the Lao Bao Trading Zone (established pursuant to Decision No. 219/1998/QĐ-TTg dated November 12, 1998 of the Prime Minister).

第二条 组织和实施奖励工作的支出水平，如政府第152/2025/NĐ-CP号决定关于分级授权和奖励领域的分权规定

This Circular applies to the following entities:

2.1. Provinces and centrally governed cities (hereinafter referred to collectively as provinces) having border gate economic zones listed in Item 1, Part I above;

2.2. Domestic investors from all forms of ownership and foreign investors engaged in business activities (including construction of infrastructure, production, trading, and service provision) in border gate economic zones;

2.3. Only business activities conducted in border gate economic zones shall enjoy the preferential policies stipulated in this Circular.

2.4. In cases where domestic and foreign investors conduct business activities in border gate economic zones but do not establish economic entities in such zones, they must separately account for their business operations in the zones to determine the basis for preferential treatment.

PART II: FINANCIAL INCENTIVES

I. INVESTMENT INCENTIVES FOR INFRASTRUCTURE DEVELOPMENT IN BORDER GATE ECONOMIC ZONES FROM CENTRAL GOVERNMENT REVENUES
RETURNED TO THE ECONOMIC ZONE:
Based on the actual revenue collected annually from the state budget at border gate economic zones, the central government budget will reinvest to develop infrastructure in border gate economic zones at the following rates:

According to the actual revenue collected annually from the state budget at border gate economic zones, the central government budget will reinvest to develop infrastructure in border gate economic zones at the following rates:

1. For border gate economic zones established after Decision No. 53/2001/QĐ-TTg takes effect, and those established according to separate Decisions of the Prime Minister before Decision No. 53/2001/QĐ-TTg takes effect but with a period of implementing the preferential policies stipulated in the Prime Minister's Decisions on establishing such border gate economic zones of up to five years from the date of effectiveness of those Decisions:

- If the actual revenue collected annually from the state budget at the border gate economic zone is less than 50 billion VND, the central government budget will reinvest 100%.

- If the actual revenue collected annually from the state budget at the border gate economic zone is more than 50 billion VND, the central government budget will reinvest 50 billion VND and 50% of the remaining actual revenue.

2. For border gate economic zones established before Decision No. 53/2001/QĐ-TTg takes effect and with a period of implementing pilot preferential policies stipulated in the Prime Minister's Decisions on establishing such border gate economic zones exceeding five years from the date of effectiveness of those Decisions:

- If the actual revenue collected annually from the state budget at the border gate economic zone exceeds 100 billion VND, the central government budget will reinvest no more than 50% of the actual revenue.

The Ministry of Finance will determine the amount of central government budget reinvestment each year for these border gate economic zones based on the proposal of the People's Committee (PC) of the province having the border gate economic zone and the opinion of the Ministry of Planning and Investment.

- If the actual revenue collected annually from the state budget at the border gate economic zone is less than 100 billion VND, the central government budget will reinvest at the rate specified as follows:

+ If the actual revenue collected annually from the state budget at the border gate economic zone is less than 50 billion VND, the central government budget will reinvest 100%.

+ If the actual revenue collected annually from the state budget at the border gate economic zone is between 50 billion VND and 100 billion VND, the central government budget will reinvest 50 billion VND and 50% of the remaining revenue.

- If these border gate economic zones have basically completed investment in infrastructure development according to the plan, the central government budget will cease reinvestment.

3. The actual revenue collected annually from the state budget on the territory of the border gate economic zone serves as the basis for determining the level of central government budget reinvestment as stipulated in Points 1 and 2 above, which is the actual revenue collected annually from the state budget on the territory of the border gate economic zone excluding: value-added tax on imported goods, special consumption tax on imported goods; revenues not included in local budget balance such as contributions from the public; revenues from confiscation of smuggled goods; school fees; medical fees, and other revenues.

II. INCENTIVES FOR BUSINESS PROJECTS IN
BORDER GATE ECONOMIC ZONES:

1. Incentives for tourism projects:

According to Point d, Clause 2, Article 2 of Decision No. 53/2001/QĐ-TTg, tourism investment projects in border gate economic zones are determined to be projects under the list of encouraged investments prescribed in Article 15 of the Law on Encouraging Domestic Investment (amended) No. 03/1998/QH10 dated May 20, 1998 of the National Assembly. Therefore, investors of tourism business projects shall enjoy investment incentives applied to projects under the list of encouraged investments prescribed in Appendix A attached to Government Decree No. 51/1999/NĐ-CP dated July 8, 1999 detailing the implementation of the Law on Encouraging Domestic Investment (amended) No. 03/1998/QH10.

This regulation only applies to investors subject to the Law on Encouraging Domestic Investment.

2. Land and water rental fee incentives:

According to Clause 3, Article 2 of Decision No. 53/2001/QĐ-TTg, domestic and foreign investors who have investment projects in border gate economic zones shall enjoy land and water rental fee incentives as follows:

2.1. Regarding land and water rental fees:

The land and water surface rental fee for investors shall be calculated at fifty percent of the current rental fees for land and water surfaces applied by the State in the border economic zone.

2.2. Regarding exemptions and reductions in land and water surface rental fees: these shall be implemented according to existing regulations.

3. Tax incentives:

According to Clause 4, Article 2 of Decision No. 53/2001/QĐ-TTg, investors who have projects in the border economic zone shall enjoy tax incentives as stipulated by current regulations.

PART III: MANAGEMENT AND USE OF FUNDS REINVESTED BY THE STATE BUDGET FOR THE BORDER ECONOMIC ZONE
CENTRAL GOVERNMENT FUNDS REINVESTED IN THE BORDER ECONOMIC ZONE

I. PREPARATION OF FUNDS FROM THE STATE BUDGET
Based on the actual revenue collected annually from the state budget at border gate economic zones, the central government budget will reinvest to develop infrastructure in border gate economic zones at the following rates:

1. Based on the planning for socio-economic development in the border economic zone, the provincial People's Committee with the border economic zone shall clearly define the capital investment needs for constructing infrastructure in the border economic zone, including a list of construction projects to be invested in, the priority level for each project, total investment capital requirements, and individual project investment capital (specifying sources of investment: from local budget, central government reinvestment funds, or borrowed funds...), implementation plans, and expected completion times to submit to the Ministry of Finance and the Ministry of Planning and Investment for monitoring and preparing reinvestment capital plans.

2. Annually, when preparing the local budget, the provincial People's Committee with the border economic zone shall prepare the projected state revenue generated within the border economic zone according to Point 3, Section 1 of Part II, and the projected central government reinvestment funds according to Points 1 and 2 of Section 1 of Part II to submit to the Ministry of Finance and the Ministry of Planning and Investment.

3. Based on the annual state revenue projections within the border economic zone, the Ministry of Finance shall determine and notify the provincial People's Committee of the projected central government reinvestment funds for the border economic zone according to Points 1 and 2 of Section 1 of Part II.

On the basis of the annual reinvestment capital allocation from the central government for the border economic zone, the provincial People's Committee shall prepare quarterly investment capital usage plans and submit them to the Ministry of Finance.

II. USE OF FUNDS FROM THE STATE BUDGET
Based on the actual revenue collected annually from the state budget at border gate economic zones, the central government budget will reinvest to develop infrastructure in border gate economic zones at the following rates:

1. In principle, the central government reinvestment funds can only be used for building infrastructure within the border economic zone. The separate investment capital from the central government for the border economic zone is a targeted subsidy from the central government budget for the province. The provincial People's Committee is responsible for using this separate investment capital from the central government for its intended purpose. Management and use of the funds must comply with national regulations on managing basic construction investment capital.

2. The provincial People's Committee may borrow preferential state funds from the Development Support Fund to build infrastructure within the border economic zone and may use the central government reinvestment funds to repay principal and interest on such loans.

3. If the central government reinvestment funds for the border economic zone are insufficient to meet the infrastructure construction investment needs, the provincial People's Committee may allocate a certain amount of capital annually from the provincial budget plan for infrastructure construction in the border economic zone.

4. If the infrastructure within the border economic zone has been relatively well-developed, the provincial People's Committee may use the central government reinvestment funds to invest in infrastructure projects outside the border economic zone if these projects are closely related and directly serve the development of the border economic zone.

The Chairman of the provincial People's Committee shall proactively decide on investments and bear responsibility for such decisions, and must inform the Ministry of Finance and the Ministry of Planning and Investment about these decisions.

5. Periodically, at the time of preparing the annual budget, the Ministry of Finance will take the lead, coordinating with the Ministry of Planning and Investment and the provincial People's Committee with the border economic zone to review and re-determine the progress of fund usage and the need for further central government reinvestment funds. Central government reinvestment will cease once the border economic zone has basically completed infrastructure construction according to the plan.

III. PROCEDURE, PROCEDURES, METHODS OF ISSUANCE, REPORTING SYSTEMS, AND SETTLEMENT OF FUNDS REINVESTED BY THE CENTRAL GOVERNMENT:

1. Annual central government reinvestment funds for the border economic zone shall be issued quarterly based on:

- The approved annual budget for reinvestment from the central government, which has been notified to the province;

- The quarterly investment capital usage plan prepared by the provincial People's Committee and submitted to the Ministry of Finance;

- The actual state revenue collected in the border economic zone in the previous quarter.

Quarterly during the fiscal year (on the twentieth day of the last month of each quarter), based on the approved annual budget for reinvestment from the central government and the actual state revenue collected in the border economic zone in the previous quarter, the provincial People's Committee shall submit to the Ministry of Finance a request for the next quarter's investment capital for the border economic zone. Based on the province's request, the Ministry of Finance will consider and issue the funds through the provincial Department of Finance and Price to transfer the funds to construction projects for infrastructure in the border economic zone.

2. The central government reinvestment funds for the province will be reviewed and adjusted annually in the first quarter of the following year. Based on the actual state revenue generated in the border economic zone in the previous year, the amount of central government reinvestment funds will be determined according to Points 1 and 2 of Section I of Part II above. Any difference between the amount required to be issued and the amount of central government funds already issued according to the approved budget will be adjusted as follows:

- If the amount of central government reinvestment funds required exceeds the amount issued according to the approved budget, the difference will be supplemented by the central government to ensure compliance with the amounts specified in Points 1 and 2 of Section I of Part II above.

- If the amount of central government reinvestment funds required is less than the amount issued according to the approved budget, the difference will be deducted from the amount to be issued in the following year to ensure that the investment funds issued comply with the amounts specified in Points 1 and 2 of Section I of Part II above.

3. For economic zones at border gates established before the effective date of Decision 53/2001/QĐ-TTg and which have had a budget for 2001 regarding the amount of central government capital to be reinvested determined according to the provisions in the Prime Minister's Decision on establishing such border economic zones, the allocation of investment capital will still be carried out according to the approved budget. The difference between the amount allocated according to the approved budget and the amount of central government capital that must be reinvested for 2001 as determined according to the levels specified in Points 1 and 2 of Section I, Part II above shall be adjusted into the first quarter of the following year.

The amount of central government capital to be reinvested for 2001 is determined according to the provisions at Points 1 and 2 of Section I, Part II above based on the actual revenue from state budget collected within the area of the border economic zone since the effective date of Decision 53/2001/QĐ-TTg dated April 19, 2001 of the Prime Minister on policies for border economic zones.

4. For economic zones at border gates established after the effective date of Decision 53/2001/QĐ-TTg, the provincial People's Committee will work specifically with the Ministry of Finance and the Ministry of Planning and Investment regarding the need for capital and the purpose of using the capital reinvested by the central government for the year of establishment. The Ministry of Finance will decide the level of reinvestment based on the agreement of the Ministry of Planning and Investment and the provincial People's Committee having the border economic zone.

5. The separate central government investment capital for border economic zones is consolidated and settled together in the settlement of the local government budget but recorded separately for investment projects in the border economic zones.

6. The procedures, formalities, methods of allocation, reporting system, and settlement of investment capital shall be implemented according to current regulations.

PART IV: IMPLEMENTATION

1. This Circular takes effect from the effective date of Decision 53/2001/QĐ-TTg (May 4, 2001).

2. This Circular replaces the Circulars of the Ministry of Finance guiding the implementation of financial issues in the Prime Minister's Decisions on establishing border economic zones.

3. For border economic zones established before the effective date of Decision 53/2001/QĐ-TTg and which have received central government reinvestment capital allocations up to the end of 2000 lower than the amount of capital to be reinvested determined according to the provisions in the Prime Minister's Decision on establishing the border gate, the Ministry of Finance will allocate the remaining portion in the following year.

4. During the implementation process, if there are difficulties, they should be reported to the Ministry of Finance for consideration and resolution.

ANNEX 1:

LIST OF BORDER ECONOMIC ZONES ESTABLISHED AND
THE PERIOD OF APPLICATION OF THE TRIAL POLICY CALCULATED
UNTIL THE EFFECTIVE DATE OF DECISION 53/2001/QĐ-TTG
BECOMES EFFECTIVE
(Annexed to Circular No. 59/2001/TT-BTC
dated July 17, 2001 of the Ministry of Finance)