Profit distribution for enterprises with 100% of charter capital held by the State in Vietnam

Profit distribution for enterprises with 100% of charter capital held by the State in Vietnam (Illustration)

Specifically, profit distribution shall be subject to Article 31 of Decree No. 91/2015/ND-CP; Article 2 of Decree No. 32/2018/ND-CP; Clause 4, Article 4 of Circular 36 and the following regulations:

- After using the enterprise’s profit determined according to the provisions of the law on accounting for compensating for the loss of the previous year according to the provisions of the law on corporate income tax, contribution to the science and technology development fund and payment of corporate income tax in accordance with laws, the remaining profit is distributed according to the provisions of Clauses 1, 2, 3, Article 31 of Decree No. 91/2015/ND-CP and Article 2 of Decree No. 32/2018 /ND-CP.

- Bases for setting aside profit to contribute to the bonus and welfare fund and the reward fund for corporate managers and controllers shall be as follows:  

+ Classifying businesses into A, B and C as a basis for setting aside profit as contributions to the fund shall be subject to Government’s regulations on supervision of investment of state capital in enterprises; financial supervision for assessment of business performance and public disclosure of financial information of enterprises of which 100% of charter capital is held by the state and state-invested enterprises and Circulars providing instructions about this activity of the Ministry of Finance of Vietnam

+ Setting aside monthly base wages or salaries to contribute to these funds:

• With respect to the bonus and welfare fund: The base payroll realized in the financial year of employees which has been approved and determined according to the provisions of Decree No. 51/2016/ND-CP dated June 13, 2016 of the Government of Vietnam on labor management, salaries and bonuses for employees working in single-member limited liability companies of which 100% of charter capital is held by the State and documents providing amendments, supplements or replacement documents (if any) divided (:) by 12 months.
• With respect to the reward fund for business managers and controllers:  The base payroll realized in the financial year of business managers (whether full-time or part-time) which has been approved and determined according to the provisions of Decree No. 51/2016/ND-CP dated June 13, 2016 of the Government of Vietnam on salaries, wages bonus for managers of single-member limited liability companies of which 100% of charter capital is held by the State and documents providing amendments, supplements and replacement documents (if any) divided (:) by 12 months.

Note: In case the enterprise implements the salary and bonus mechanism according to specific regulations, it shall follow the government's regulations on that particularity in Vietnam.

Circular 36/2021/TT-BTC takes effect from July 10, 2021 and replaces Circular 219/2015/TT-BTC and Circular 59/2018/TT-BTC.

Bao Ngoc

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