Adjusting the annual compensation amount according to the official settlement in Vietnam

Adjusting the annual compensation amount according to the official settlement in Vietnam (Illustrative image)

Circular 111/2007/TT-BTC stipulates the procedure for adjusting the annual interest rate compensation according to the official settlement in Vietnam as follows:

- At the end of the fiscal year, based on the official settlement data approved by the Management Council, the Development Bank shall determine the required compensation for the year, along with an explanation sent to the Ministry of Finance of Vietnam.

- Based on the projected compensation arranged for the State Budget year; settlement data, the Ministry of Finance determines the total annual compensation for the Development Bank and makes adjustments.

- The adjustment of compensation according to the official settlement is carried out as follows:

- If the annual compensation approved in the settlement is higher than the provisional compensation given throughout the year (quarterly), the Ministry of Finance of Vietnam will provide the additional missing amount within the scope of the notified estimate. The excess difference between the official annual compensation and the notified estimate (if any) will be arranged in the following year's compensation estimate. The additional compensation during the final settlement adjustment period is accounted into the budget expenditure settlement of the execution year, while the additional compensation after the final settlement adjustment period is accounted into the budget expenditure settlement of the following year.- If the annual compensation approved in the settlement is lower than the provisional compensation given throughout the year (quarterly), the excess difference will be deducted from the provisional compensation of the first quarter of the following year (in case compensation is still required in the following year); or it must be paid back to the State Budget (in case no compensation is required in the following year).

Details can be viewed at Circular 111/2007/TT-BTC which takes effect on October 10, 2007.

Ty Na

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