Legal Counselling

Vietnam: Distribution of profits applicable to wholly state-owned credit institutions

Kim Linh

08:26, 14/10/2017

The profits of credit institutions after deducting losses of previous year as prescribed in the Law on corporate income tax of Vietnam and paying corporate income tax shall be distributed in the following order:

- Distribute profits to the contributors under the signed contract (if any).

- Deduct the expired loss recovery in the previous year from the profits before corporate income tax according to regulations.

- The remaining profit after deducting the amount prescribed above shall be distributed in the following order:

+ Add 5% of the profit to the charter capital addition reserve fund, the maximum amount of this fund must not exceed the charter capital of the credit institution;

+ Add 10% of the profit to the financial reserve fund;

+ Add not more than 25% of the profit to the development investment fund;

+ Set aside the reward and welfare fund for the employees of the credit institution;

+ Set aside the reward fund for credit institution managers and controllers;

+ The remaining amount of profits after being set aside for funds stipulated above shall be paid to the state budget.

View more details at Decree No. 93/2017/NĐ-CP of Vietnam’s Government, effective from September 25, 2017.

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