Vietnam: Funding sources and subsidies policies for enterprises investing in the agriculture and rural development sector

Specifically, funding sources and subsidies policies for enterprises investing in the agriculture and rural development sector are as follows:

Funding sources

The central government budget shall allocate at least 5% of its annual funding for investment and development to give subsidies to agriculture; each provincial government budget shall allocate at least 5% of its annual funding for provincial government budget expenditure to give subsidies to agriculture.

Additionally, ministries and local governments may consider using funding from social and economic development programs/projects and legal funds to provide subsidies for enterprises investing in agriculture and rural development sector.

The Ministry of Planning and Investment takes charges and cooperates with the Ministry of Finance shall, based on balancing capacity in each period and in each year as well as demands for subsidies of enterprises in each province, request the Government to make decision on sources of funding for giving subsidies to agriculture.

Post-investment subsidies

- Central government budget: The Prime Minister shall decide and specify the total funding amount for medium-term and annual assistance to each provincial government at the “Program on subsidies for enterprises investing in agriculture and rural development sector” item in the public investment plan. The Ministry of Planning and Investment shall consider and decide the list of qualified projects and specific funding amount given to each project in accordance with regulations of the Law on public investment.

- Provincial government budget: Shall be used to fund local projects which meet regulations herein.

Decisions on approval for investment policies for the list of qualified projects and written commitments to providing subsidies made by competent authorities shall be used as the basis for allocating funding from the state budget to qualified enterprises.

State budget shall provide post-investment subsidies

- When investment items of a project have been completed, tested and accepted according to relevant requirements, 70% of the total amount of subsidies for these investment items shall be disbursed.

- Upon the completion of project commissioning and the project has officially started its operation, the remaining 30% of subsidies is given.

- The unused amount of the predetermined funding for an enterprise in a budget year shall be carried forward to the following budget year. After 02 budget years, if the predetermined funding for an enterprise is not yet fully granted to the enterprise, the remains shall be transferred to another qualified enterprise according to regulations herein.

- Funding sources and procedures for giving subsidies for foreign-invested enterprises and state-owned enterprises investing in agriculture and rural development sector shall be performed according to specific law regulations.

- Funding from the state budget shall be not included in taxable income of a receiving enterprise. This funding amount is guaranteed by the Government when the receiving enterprise applies for loans from commercial banks to have funding for implementing its project.

View more details at Decree No. 57/2018/ND-CP of Vietnam’s Government, effective from April 17, 2018.

-Thao Uyen-

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