Circular 186/2010/TT-BTC: What is profits remitted abroad under the law in Vietnam?

Circular 186/2010/TT-BTC: What is profits remitted abroad under the law in Vietnam? (Internet image)

Article 3 of Circular 186/2010/TT-BTC stipulates the determination the number of profits remitted abroad as follows:

Annual profits remitted abroad mean profits foreign investors are shared or earn in a financial year from their direct investment based on audited financial statements, enterprise income tax balance sheets in which fioreign investors join investment plus (+) other profit items example as profit items have not remitted yet from previous years adding this year; minus (-) profit items foreign investors have used or committed using in order to reinvest in Vietnam, the profit items foreign investors have used to pay for expenditure items of foreign investors for production and business activities or for foreign investors’ personal demands in Vietnam.

Profits are remitted abroad when investment activities in Vietnam are over shall be the total profits earned by foreign investors in the process of direct investment in Vietnam, minus (-) profit items have be used for reinvestment, the profit items were remitted abroad during foreign investors’ operation period in Vietnam and the items been used for other expenditures of foreign investors in Vietnam

Foreign investors shall not allowed to remit abroad profits they are shared or earned from their direct investment in Vietnam in araised profit year in case that the year financial statements of enterprises in which they make investment and araise profits still contain accumulated losses after such losses have been carried forward under the law on enterprise income tax.

More details can be found in Circular 186/2010/TT-BTC, which comes into force from January 2, 2011.

Nguyen Phu

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