Decree 407/2026/ND-CP special mechanisms for operation and financial management applicable to EVN

DECREE

Prescribing special mechanisms for operation and financial management applicable to Vietnam Electricity

Pursuant to the Law on Organization of the Government No. 63/2025/QH15;

Pursuant to the Law on Management and Investment of State Capital in Enterprises No. 68/2025/QH15;

Pursuant to the Electricity Law No. 61/2024/QH15;

At the proposal of the Minister of Finance;

The Government hereby promulgates the Decree prescribing special mechanisms for operation and financial management applicable to Vietnam Electricity.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Decree prescribes special mechanisms for operation and financial management applicable to the Parent company - Vietnam Electricity (hereinafter abbreviated as EVN).

Article 2. Subjects of application

1. The owner-representing agency.

2. EVN.

3. The owner's direct representative at EVN.

4. Other relevant agencies, organizations and individuals.

Chapter II

SPECIFIC PROVISIONS

Article 3. Management of EVN's assets and equity

1. EVN Board of Directors shall decide on the transfer of investment projects, assets and electricity works between EVN and its wholly-owned subsidiaries on the principle of transferring them in their existing condition at their book values, without revaluing the transferred investment projects, assets and electricity works, and shall record increases or decreases in capital in accordance with applicable law.

2. EVN shall determine the designed useful life, actual useful life and new depreciation period for fixed assets constituting electricity works that are revalued under decisions of competent authorities and electricity works invested in under the public-private partnership method and transferred to EVN.

3. The value of electricity works invested in under the public-private partnership method and transferred to EVN shall be determined as follows:

a) After completion of the handover and receipt, EVN shall provisionally record an increase in assets and the owner's investment capital in the enterprise in accordance with the Government's Decree No. 02/2024/ND-CP dated January 10, 2024, on the transfer of electricity works being public assets to EVN, and the Government's Decree No. 286/2025/ND-CP dated November 03, 2025, amending and supplementing a number of articles of Decrees in the field of management and use of public assets, and amending, supplementing or replacing documents (if any).

b) Where information on the historical cost and residual value of assets is unavailable, the value of an electricity work shall be provisionally determined at 20% of the investment capital value of such electricity work. The detailed value of each work item shall be provisionally determined by allocating the value of the electricity work to each transferred electricity work item according to appropriate criteria, as specified in the actual handover record. After provisionally determining the value, EVN shall carry out the steps for determining the value of electricity works invested in under the public-private partnership method and transferred to EVN in accordance with the Government's Decree No. 02/2024/ND-CP dated January 10, 2024, on the transfer of electricity works being public assets to EVN, and the Government's Decree No. 286/2025/ND-CP dated November 03, 2025, amending and supplementing a number of articles of Decrees in the field of management and use of public assets, and amending, supplementing or replacing documents (if any).

4. When EVN receives money and assets under support policies on compensation for the relocation, rearrangement and underground installation of electricity works, EVN shall, based on the compensation plans approved by the competent authority, record an increase in the owner's investment capital in EVN after deducting related expenses (if any) in accordance with regulations.

For assets dismantled and relocated under decisions of competent authorities, EVN shall record a decrease in assets and the owner's investment capital in EVN corresponding to the residual value of such assets in accordance with regulations.

Article 4. EVN’s revenues and expenses

1. Foreign exchange differences arising during the investment process for electricity works included in the National Power Development Plan shall be recorded on a cumulative basis and allocated to financial revenues or expenses; the period for allocation of expenses shall not exceed 5 years from the date the works are put into operation. Particularly for nationally important projects, the allocation period shall not exceed the loan repayment period.

2. Electricity meter costs shall be allocated over a period not exceeding 5 years from the date such costs are incurred, in a manner consistent with EVN's production and business situation.

3. Expenses incurred for the repair and remedy of incidents of electricity works that are subject to allocation shall be the remaining incident remedy expense value (after deducting compensation paid by insurers and other support sources, if any). Where expenses incurred for the repair and remedy of incidents of electricity works due to objective causes, such as natural disasters or fires, affect business performance (resulting in profits lower than planned, or losses), EVN may allocate such expenses over a period not exceeding 3 years from the date such expenses are incurred.

Article 5. Expenses to be covered by after-tax profits

1. Expenses specified at Point b, Clause 1, Article 25 of the Law on Management and Investment of State Capital in Enterprises are expenses incurred from unsuccessful investments in electricity projects and works of a special nature and involving high risks, which are not deductible when determining taxable income in accordance with the law on corporate income tax, including investment preparation expenses and investment expenses already incurred in accordance with law for any of the following electricity projects and works:

a) Electricity projects and works that are no longer eligible for implementation due to adjustments to master plans by competent state agencies.

b) Electricity projects and works that are no longer eligible for implementation due to the promulgation or amendment of policies by competent state agencies, resulting in changes to investment conditions, where such changes are the direct and decisive cause of the projects no longer being eligible for implementation.

2. Dossiers for determining expenses incurred from unsuccessful investments specified in Clause 1 of this Article must comprise:

a) For the cases specified at Point a, Clause 1 of this Article:

Documents on adjustments to master plans issued by competent agencies, accompanied by reports assessing the impacts of such adjustments resulting in the projects no longer being eligible for implementation; or decisions on policy changes issued by competent agencies and reports assessing the impacts of such policy changes resulting in the projects no longer being eligible for implementation;

Dossiers on acceptance testing, payment and finalization of the volume and value of investment survey work performed in accordance with law;

Independent auditors' audit reports on the value of expenses incurred.

b) For the cases specified at Point b, Clause 1 of this Article:

Decisions on policy changes issued by competent agencies and reports assessing the impacts of such policy changes resulting in electricity projects and works no longer being eligible for implementation;

Dossiers on acceptance testing, payment and finalization of the volume and value of work performed, or finalization/determination of the value of investment expenses incurred;

Independent auditors' audit reports on the finalized value.

3. Based on the independent auditor's unqualified audit report on the finalized value, EVN shall decide on the allocation period not exceeding 5 years from the date the Board of Directors approves the eligibility for finalization.

Chapter III

IMPLEMENTATION ORGANIZATION

Article 6. Effect

This Decree takes effect from December 28, 2026, and applies from the 2026 fiscal year.

Article 7. Transitional provisions

1. For electricity works invested under the public-private partnership method and transferred to EVN before the effective date of this Decree, for which the determination of value for provisionally recording an increase in assets and the owner's investment capital in the enterprise has not been completed, EVN shall provisionally record the value of such assets in accordance with this Decree from the date of receipt of the handover.

2. Pending the promulgation of the revised charter, financial regulations and internal regulations, EVN may continue to apply the promulgated charter, financial regulations and internal regulations that are not contrary to the Law on Management and Investment of State Capital in Enterprises, the more favorable provisions of the Law on Management and Investment of State Capital in Enterprises, detailing and guiding documents, and this Decree.

Article 8. Implementation responsibility and implementation organization

1. In case any legal documents referred to in this Decree are amended, supplemented or replaced, the amending, supplementing or replacing ones shall prevail.

2. Ministers, Heads of ministerial-level agencies, Chairpersons of provincial-level People’s Committees, Chairman of the Board of Directors, CEO and the owner's direct representative at EVN, other relevant agencies, organizations and individuals shall implement this Decree./.