Principles for Considering Interest Rate Support for Bank Loans to Purchase Temporary Storage of Paddy and Rice

1. The state budget will support 100% interest rates on loans from commercial banks for traders who are subject to the regulations in Article 1 of the Circular to purchase temporary reserves of paddy and rice for the Winter-Spring 2014-2015 crop as directed by the Prime Minister the Government of Vietnam.

2. Interest rate support for loans to purchase temporary reserves of paddy and rice is only implemented for loans from commercial banks designated by the State Bank of Vietnam according to regulations.

In cases where traders purchase temporary reserves of paddy and rice using other sources of capital, not from loans from commercial banks as prescribed in Decision 241/QD-TTg and the guidance of the State Bank of Vietnam, they will not receive support from the state budget.

3. Loans supported by the interest rate are loans that are repaid on time and within the term at the time of interest rate support; there is no interest rate support for overdue loans.

4. The quantity of paddy and rice supported by the interest rate for each trader is according to the actual quantity of paddy and rice that the trader purchases for temporary reserves but must not exceed the quantity stipulated in the documents assigning the purchase targets of temporary reserves of paddy and rice for the Winter-Spring 2014-2015 crop by the Vietnam Food Association and ensuring the total quantity of paddy and rice purchased for temporary reserves does not exceed 01 million tons of rice according to regulations.

5. Paddy and rice purchased for temporary reserves include various types of paddy and rice (including plain rice, sticky rice, fragrant rice, and broken rice of all kinds).

6. The period for purchasing temporary reserves is from March 1, 2015, to April 15, 2015.

7. The period of interest rate support on bank loans is the actual storage period calculated from the time of purchase of paddy and rice according to the provisions in Clause 6 of this Article to the time of sale of the temporary reserves of paddy and rice but not exceeding June 30, 2015.

8. The price for calculating interest rate support is the actual purchase price according to the market price (excluding value-added tax) for each type of paddy and rice.

The basis for determining the actual purchase price according to the market price includes the purchase contract, contract settlement, warehouse receipts, purchase invoices, payment vouchers, or other related documents presented by the traders.

In cases where traders purchase temporary reserves of paddy, it will be converted at the rate of two (02) paddy to one (01) rice.

In cases where traders purchase raw rice for processing into finished rice, it is not converted from the amount and purchase price of raw rice to finished rice.

9. The supported interest rate is the rate at which traders borrow from commercial banks according to the Credit Contract but not exceeding a maximum of 7% per annum in accordance with the guiding documents of the State Bank of Vietnam.

10. The interest support from the state budget for loans from the bank for the purchase of temporary reserves of paddy and rice as directed by the Prime Minister the Government of Vietnam is recorded as other income in the trader's period and is subject to corporate income tax according to current regulations.

Details at Circular 50/2015/TT-BTC effective from April 15, 2015.

- Ngoc Duyen -

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