Principles for Considering Interest Rate Support for Loans to Temporarily Store Rice and Paddy

Principles for Considering Interest Rate Support on Loans for Temporary Rice Purchase (Illustrative Image)

Circular 65/2014/TT-BTC prescribes principles for considering interest rate support on bank loans for the temporary purchase of rice in the Winter-Spring crop 2013-2014 as follows:

1. The state budget will support 100% of the interest on bank loans at commercial banks for traders subject to the regulations in Article 1 of this Circular to temporarily purchase rice in the Winter-Spring crop 2013-2014 according to the direction of the Prime Minister of the Government of Vietnam in Decision 373a/QD-TTg.

2. Interest rate support on loans for temporary rice purchases shall only be implemented for loans from commercial banks designated by the State Bank of Vietnam according to Decision 373a/QD-TTg. In case traders purchase rice for temporary storage using other capital sources, not commercial bank loans as prescribed, the state budget will not support them.

3. The loans supported with interest are loans that are repaid on or before the due date at the time of interest support, and no interest support will be provided for overdue loans.

4. The quantity of rice supported with interest for each trader is based on the actual quantity of rice the trader buys for temporary storage but must not exceed the quantity specified in the documents assigning the procurement target for the Winter-Spring crop 2013-2014 by the Vietnam Food Association, ensuring the total amount of rice for temporary storage does not exceed 1 million tons of rice equivalent as prescribed.

5. Types of rice for temporary storage include regular rice and aromatic rice.

6. The temporary storage period is from March 15, 2014, to the end of April 30, 2014.

7. The period for interest rate support on bank loans is the actual temporary storage period calculated from March 20, 2014 (for rice quantities purchased for temporary storage from March 15, 2014, to the end of March 19, 2014) or from the purchase time (for rice quantities purchased from March 20, 2014, to the end of April 30, 2014) until the time of selling the temporarily stored rice, but not exceeding July 20, 2014.

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

The basis for determining the actual purchase price according to the market price includes the purchase contract, contract liquidation, delivery receipt, purchase invoice, payment vouchers, or other related documents presented by the trader.

In the case of traders purchasing rice for temporary storage, the conversion ratio is two (02) units of rice to one (01) unit of processed rice.

In the case of traders purchasing raw rice for processing into finished rice, the raw rice quantity and purchase price will not be converted into finished rice equivalent.

9. The supported interest rate is the interest rate traders borrow from the bank under the Credit Contract but shall not exceed 7% per annum as prescribed.

10. The state budget's support for bank loan interest for temporary rice purchases as directed by the Prime Minister of the Government of Vietnam will be accounted for as other income in the trader's period and subject to corporate income tax according to current regulations.

Details are available at Circular 65/2014/TT-BTC, effective from May 19, 2014.

Ty Na

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