How Are Delays in Declaring Dividends and Shared Profits Handled?

Circular 61 stipulates that for the act of late submission of dividend and profit declaration files and late payment of dividends and profits to the state budget, the handling is as follows:

- Enterprises that are late in submitting dividend and profit declaration files for the state capital compared to the prescribed deadline will be penalized for late submission of tax declaration files as per the Law on Tax Administration.

- Dividends and profits shared for the state capital are a source of state budget revenue. Enterprises subject to paying dividends and profits shared for the state capital are responsible for paying accurately, sufficiently, and promptly the amount of dividends and profits shared for the state capital as regulated.

- Enterprises that are late in paying dividends and profits shared for the state capital to the state budget must pay late payment fines to the state budget according to the provisions of the Law on Tax Administration and the Law on amendments and supplements of some articles of the Law on Tax Administration.

- Furthermore, Circular 61 also stipulates the timing for calculating late payment fines from the day following the last date of the deadline for paying dividends and profits shared for the state capital.

- The rate for calculating late payment fines is as per the provisions of the Law on Tax Administration. Late payment fines are covered from the post-tax profits of joint-stock companies, limited liability companies with two or more members having state capital contributions of the subsequent fiscal year based on the vouchers for paying late payment fines to the state budget.

Example 6: Company E is a joint-stock company with state capital contribution represented by the Ministry of Industry and Trade. On April 15, 2016, Company E held the General Meeting of Shareholders and on July 1, 2016, the Company announced the distribution of dividends for the business operations in 2015 to the shareholders, in which the dividends distributed to the state capital were VND 130 billion. Company E must declare and pay the state budget the amount of dividends distributed to the state capital of VND 130 billion no later than August 14, 2016. On September 15, 2016, Company E made the payment of the dividends distributed to the state capital to the state budget, so Company E has to pay the late payment fine calculated from August 15, 2016, to September 15, 2016. The voucher for paying the late payment fine is dated September 15, 2016, and the late payment fine is covered from the post-tax profits of 2016 of Company E.

See details Circular 61/2016/TT-BTC effective from May 26, 2016.

-Thao Uyen-

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE