Guidelines on Profit Distribution for State-Owned Enterprises

The State has promulgated many policies, one of which is Circular 59/2018/TT-BTC amending and supplementing certain provisions of Circular 219/2015/TT-BTC on State capital investment in enterprises and management, use of capital, and assets in enterprises.

The distribution of profits for state-owned enterprises is guided by Circular 59 as follows:

1. If the enterprise is profitable, it shall compensate for the cumulative losses of previous years. The profit after compensating for all the losses of previous years shall be allocated to the Science and Technology Development Fund, corporate income tax; the remaining profit shall be distributed in accordance with provisions in Clauses 1, 2, 3 Article 31 Decree 91/2015/ND-CP and Article 2 Decree 32/2018/ND-CP.

2. The basis for establishing commendation funds, welfare funds, reward funds for managers, and supervisors is determined as follows:

- Regarding the classification of enterprises A, B, C as the basis for the establishment of funds according to the Government of Vietnam’s regulations on state capital investment supervision in enterprises; financial supervision.- Regarding the monthly salary basis for the establishment of funds:- For the establishment of commendation and welfare funds for state-owned enterprises: based on the actual wage fund in the financial year of the enterprise’s employees divided by 12 months.- For the establishment of reward funds for enterprise managers and supervisors: based on the actual wage fund, remuneration of public employee managers divided by 12 months.

Circular 59/2018/TT-BTC took effect from September 1, 2018.

- Thanh Lam -

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