Vietnam: 03 principles for recognizing expense of microfinance programs and projects

According to Circular No. 37/2019/TT-BTC of the Ministry of Finance of Vietnam, expense of microfinance programs and projects of political organizations, socio-political organizations, and non-governmental organizations shall be recognized according to the following 03 principles:

- In calculating corporate income tax, expenses shall be determined in accordance with the Law on Corporate Income Tax and guiding documents thereof.

- Expenses of the MF program/project are expenses actually incurred in the period related to the business activities of the MF program/project.

- Expenses recorded to business expenses of the MF program/project shall conform to the matching principle between revenue and expenses and adequate lawful invoices and documents are required as per the law. The MF program/project may not record expenditures covered by other sources of fund to expense. The expenses shall be determined and recorded in accordance with Vietnam’s accounting standards and relevant laws and regulations.

Residual income of the MF program/project after subsidy of business loss of the previous year (if any) and discharge of liabilities to state budget as per the law shall be decided by the MF program/project provided that the profit may not be shared or used for activities other than microfinance activities in any form.

View other provisions at Circular No. 37/2019/TT-BTC of the Ministry of Finance of Vietnam, effective from August 09, 2019.

Thu Ba

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