Vietnam: The particularity of subsidies and method of determining the subsidy value

According to Article 21 of Decree No. 10/2018/ND-CP of Vietnam’s Government, the particularity of subsidies shall be determined as follows:

- There is a clear restriction for one or a group of organizations/individuals, or for one or a certain group of production sectors to receive subsidies;

- The objective criteria and conditions for receiving subsidies which are defined in legal documents but not automatically applied in practice;

- There is a clear restriction for organizations or individuals in a particular geographical area;

- In case the subsidy is not particular as specified above, the investigating authority may still determine its particularity based on reviewing factors including the limited number of subsidized enterprises, the disproportionate allocation of subsidies and the way the authorities provide subsidies.

The subsidies in accordance with Clause 1 and 2 Article 85 of the Law on Foreign Trade Management of Vietnam shall be considered particular subsidies.

Besides, also according to Decree No. 10/2018/ND-CP, the method of determining the subsidy value is regulated as follows:

- In case the subsidy is a nonrefundable allocation, the subsidy value shall be calculated on the basis of the actual value of the allocation granted to the subsidized organizations/individuals;

- In case the subsidy is granted in the form of a loan provided by the Government or public sectors, the subsidy value shall be calculated on the basis of the difference between the payable interest rate applicable to such loan under market conditions and the interest rate actually paid by the organization/individual;

- In case the subsidy is granted in the form of loan guarantee provided by the Government or public sectors, the subsidy value shall be calculated on the basis of the difference between the payable interest rate applicable to non-guaranteed loan and the actual interest rate applicable to guaranteed loans;

- In case the subsidy is granted in the form of share transfer or direct capital transfer by the Government or public sectors, the subsidy value shall be calculated on the basis of the capital amount actually received by the enterprise;

- In case the subsidy is granted in the form under which the Government or public sector purchase goods/services at prices higher than the market price for the organization/individual, the subsidy value shall be calculated on the basis of the difference between the market prices and the actual prices paid by the Government or public sectors for such goods/services;

- In case the subsidy is granted in the form under which the Government or public sector provide goods/services at prices lower than the market price to the organization/individual, the subsidy value shall be calculated on the basis of the difference between the market prices and the sale prices of the Government or public sectors to the organization/individual;

- In case the subsidy is granted in the form under which the Government or public sectors ignore or not collect the payables of the organization/individual, the subsidy value shall be calculated on the basis of the difference between the amount payable in accordance with law provisions and the amount actually paid by the organization/individual.

The value of subsidy granted in other forms shall be calculated in an equitable, reasonable manner and not contrary to international practices.

View relevant provisions at: Decree No. 10/2018/ND-CP of Vietnam’s Government takes effect from January 15, 2018.

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