New Regulations on Profit Distribution of the Parent Company - Vietnam National Oil and Gas Group

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According to the provisions in Article 23 of Decree 06/2015/ND-CP, the profits of the enterprise, after offsetting the previous year's losses as prescribed by the Law on Corporate Income Tax, allocating funds for scientific and technological development as per legal provisions, paying corporate income tax, the remaining profits are distributed as follows:

- Dividends are distributed to joint venture capital contributing members according to the contract (if any).

- Offsetting losses of previous years that have expired from being deducted from pre-tax profits.

- The remaining profits after deducting the contents specified in Clauses 1 and 2 of this Article are distributed as follows:

a) Deduct 10% to establish the Oil and Gas Exploration Fund; when the fund balance is equal to 10% of charter capital, no further deductions are made.

b) Deduct 30% into the Development Investment Fund.

c) Deduct into the Reward and Welfare funds:

- Parent company rated A may deduct up to no more than 3 months' actual salary for both the reward and welfare funds;

- Parent company rated B may deduct up to no more than 1.5 months' actual salary for both the reward and welfare funds;

- Parent company rated C may deduct up to no more than 1 month’s actual salary for both the reward and welfare funds;

Parent companies that are not rated cannot allocate funds for reward and welfare.

- Deduct into the Management Officials Reward Fund:

- Parent company rated A may deduct up to no more than 1.5 months' actual salary of company management officials;- Parent company rated B may deduct up to no more than 1 month’s actual salary of company management officials;- Parent company rated C or companies not rated cannot allocate funds for the Management Officials Reward Fund.

The remaining profits after allocation are submitted to the Enterprise Reorganization and Development Fund. The Board of Members decides on the profit distribution and fund allocations after obtaining approval from the Ministry of Industry and Trade.

More details can be found in: Decree 06/2015/ND-CP, effective from March 1, 2015.

Thu Ba

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