Determination of profits of enterprises with 100% Vietnamese state capital investing in other enterprises

Bao Ngoc

08:26, 11/10/2021

The Ministry of Finance of Vietnam has promulgated Circular 85/2021/TT-BTC dated 5/10/ 2021 guidance on collection and payment of profits and dividends divided by the state capital invested in enterprises.

According to the Circular, the determination of profits of enterprises (enterprises) with 100% State capital investing capital in other enterprises is prescribed as follows:

- Remaining profits of subsidiaries where 100% of State capital is held by the parent company is determined based on production and business results and financial statements.

- Dividends and profits distributed from joint stock companies, limited liability companies with two or more members with capital contribution of enterprises with 100% of State capital is determined based on production and business results, reports financial statements and decisions on dividend and profit distribution of the General Meeting of Shareholders or the Members' Council of a JSC, a limited liability company with two or more members.

Enterprises with 100% State capital is responsible for collecting dividends and distributing profits and accounting for financial revenues to pay the state budget.

- Remaining profits of subsidiaries, dividends and profits distributed from joint stock companies and limited liability companies with two or more members shall be aggregated to determine the remaining profit to be remitted to the state budget.

Circular 85/2021/TT-BTC of Vietnam takes effect from January 1, 2022 and replaces Circular 61/2016/TT-BTC.

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