On May 20, 2022, the Government issued Decree 31/2022/NĐ-CP (“Decree 31”) on interest subsidies provided by the State budget for loans of enterprises, co-operatives, household businesses (hereinafter referred to as “Enterprises”). In order to instruct commercial banks to implement the interest subsidies under Decree 31, and to ensure the eligible entities having precise loan purposes, the Ministry of Planning and Investment issued Documentary No. 5251/BKHĐT-PTDN (“Documentary 5251”) clarifying some contents of Decree 31, specifically, guiding a number of issues related to the determination of entities, of which, business lines are eligible for the interest subsidies pursuant to Article 2.2(a) of Decree 31.
Specifically, under Article 2.2(a) of Decree 31, Enterprises shall be able to enjoy the interest rate subsidies by the State budget upon the following conditions:
- Having registered business lines in one of those eligible for the interest rate subsidies pursuant to Article 2.2(a) of Decree 31, including: aviation, transport and storage (H), tourism (N79), accommodation and food and beverage services (I), education and training (P), agriculture, forestry, and fishery (A), processing and manufacturing industries (C), software publishing (J582), computer coding and relevant activities (J-62), information service activities (J-63); including construction activities serving the aforementioned economic sectors but excluding construction activities serving real estate trading mentioned under code (L) according to Decision 27/2018/QĐ-TTg).
- Having loan purposes serving the aforementioned business lines eligible for interest rate subsidies.
Documentary 5251 explained several issues araising from the determination of entities eligible for interest rate support:
1. Loans, which do not serve the subsidized business lines, shall not eligible for the interest subsidies:
- In case, Enterprises having registered business lines being subsidized, but the loan purpose does not serve the subsidized business lines, shall not subject to interest subsidies.
- The information for determining business lines is recorded on the National Database on Enterprise Registration (http://dangkykinhdoanh.gov.vn/).
- Business lines recognized on the National Database must be the 4th business lines in the Industrial Classification of Vietnam.
2. The loans of household businesses not subject to household business registration shall not eligible for the interest subsidies[1] because of the absent of basis for determining whether any subsidized business line exists.
3. Enterprises operating in construction industry shall not eligible for the interest subsidies eventhough their loan purposes benefit the construction activities directly serving the subsidized business lines.
As presented above, in order to enjoy the interest subsidies pursuant to Article 2.2(a) of Decree 31, Enterprises must simultaneously satisfy 02 conditions on business lines and loan purposes. Accordingly, Enterprises operating in construction industry fall into Sector F in the Industrial Classification, which are not subject to the interest rate subsidies. Therefore, construction Enterprises are not qualified for the interest rate subsidies.
4. Only Enterprises fully satisfy the conditions on business lines and loan purposes shall be able to enjoy the interest rate subsidies
All activities such as: investment or purchase of fixed assets; buying/lease-purchase/real-estate leasing for the establishment of headquarters, production and business locations; or payment of regular expenses of the enterprise, shall only be considered for interest rate subsidies upon the satification of the conditions specified in Article 2.2(a) of Decree 3.
Documentary 5251 shall take effect from the adoption date.
[1] Pursuant to Article 79.2 of Decree 01/2021/NĐ-CP on enterprise registration: “Households engaged in agriculture, forestry, aquaculture, salt production, street vendors, nomadic or seasonal businesspeople, and service providers earning low revenues are not required to apply for establishment of household businesses, except for conditional business lines. The provincial People’s Committees shall specify the low revenues applied within their provinces”.
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