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THE
MINISTRY OF FINANCE
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SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom – Happiness
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No.
186/2010/TT-BTC
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Hanoi , November 18, 2010
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CIRCULAR
GUIDING
THE REMITTANCE ABROAD OF PROFITS EARNED BY FOREIGN ORGANIZATIONS AND
INDIVIDUALS FROM THEIR DIRECT INVESTMENT IN VIETNAM UNDER THE INVESTMENT LAW
Pursuant to the November 29,
2005 Investment Law No. 59/2005/QH11 and documents guiding the implementation;
Pursuant to the November 29, 2006 Law on Tax Administration No. 78/ 2006/QH11
and documents guiding the implementation;
Pursuant to the June 3, 2008 Law on Enterprise Income Tax No. 14/2008/ QH12 and
documents guiding the implementation;
Pursuant to the Government's Decree No. 160/2006/ND-CP of December 28, 2006,
regulating in detail a number of articles of the Ordinance on Foreign Exchange;
Pursuant to the Government's Decree No. 118/2008/ND-CP of November 27, 2008,
regulating the functions, tasks, powers and organizational structure of the
Ministry of Finance;
The Ministry of Finance guides the remittance abroad of profits earned by
foreign organizations and individuals from their direct investment in Vietnam
under the Investment Law as follows:
Article 1. Subjects of
application
Foreign organizations and
individuals that make direct investment in Vietnam under Article 21, Article
22, Article 23, Article 24, Article 25 of the Investment Law (hereinafter
general called as foreign investors) and remit abroad of profits from result of
investment in Vietnam under Article 2 of this Circular.
Foreign organizations and
individuals that make indirect investment in Vietnam under Article 26 of the
Investment Law, and remit abroad their profits under relevant laws.
Article 2. Profits which
are remitted abroad
1. Profits from Vietnam are
remitted abroad by foreign investors under this Circular are legal profits that
they are shared or earn from direct investment activities in Vietnam under the
Investment Law after finished fully financial obligations with the Vietnam
State under regulations.
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- Profits are remitted abroad in
cash in accordance with the law on foreign exchange management;
- Profits are remitted abroad in
kind and converted of objects’value in accordance with the law on goods import
and export and the provisions of relevant laws.
Article 3. Determination
the number of profits remitted abroad
1. Annual profits remitted
abroad mean profits foreign investors are shared or earn in a financial year
from their direct investment based on audited financial statements, enterprise
income tax balance sheets in which fioreign investors join investment plus (+)
other profit items example as profit items have not remitted yet from previous
years adding this year; minus (-) profit items foreign investors have used or
committed using in order to reinvest in Vietnam, the profit items foreign
investors have used to pay for expenditure items of foreign investors for
production and business activities or for foreign investors’ personal demands
in Vietnam.
2. Profits are remitted abroad
when investment activities in Vietnam are over shall be the total profits
earned by foreign investors in the process of direct investment in Vietnam,
minus (-) profit items have be used for reinvestment, the profit items were
remitted abroad during foreign investors’ operation period in Vietnam and the
items been used for other expenditures of foreign investors in Vietnam
3. Foreign investors shall not
allowed to remit abroad profits they are shared or earned from their direct
investment in Vietnam in araised profit year in case that the year financial
statements of enterprises in which they make investment and araise profits
still contain accumulated losses after such losses have been carried forward
under the law on enterprise income tax.
For example: Foreign investor A
contributes capital to establish a company in Vietnam. In 2009, the company
araised a loss of VND 4 billion.
Assuming in 2010, the company
has a pre-tax income of VND 3 billion. So that, after balancing the loss amount
have been carried forward from 2009 under the provisions, in 2010 the company
has a loss amount of VND 1 billion. The company are strictly prohibited from
sharing its profits for capital contributors and foreign investor A shall not
remit his shared profits in 2010 to A’s home country.
Assuming in 2010. the company
has a pre-tax income of VND 5 billion.So that, balancing the loss amount have
been carried forward from 2009 under the provisions, in 2010 the company has
the rest of income of VND 1 billion which obligated enterprise income tax. If
the enterprise income tax rate applicable to the company is 25%, the company
shall implement payment an enterprise income tax amount of VND 250 million (=
VND 1 billion x 25%). The company can share after-tax profits to capital
contributors and foreign investor A can remit profits shared in 2010 to A’s
home country.
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1. Annual profits remittance
abroad
Foreign investors can annually
remit abroad profits they are shared or earn from their direct investment in
Vietnam when fiscal year is over after enterprises in which foreign investors join
investment have completed financial obligations to the State of Vietnam under
the provisions of law and submitted audited financial statements and enterprise
income tax finalization declarations of that year to direct managing tax
offices.
2. Profits remittance abroad
when finished direct investment activities in Vietnam
Foreign investors can remit
abroad profits when finished direct investment activities in Vietnam after
enterprises in which foreign investors join investment have accomplished
financial obligations towards the Vietnam State under law, submitted audited
financial statements and enterprise income tax finalization declarations to
direct managing tax offices and implement fully all the obligations under the
Law on Tax Administration.
3. Responsibilities of
enterprises in which foreign investors joint capital investment
Enterprises in which foreign
investors joint capital investment have the responsibilities for implementing
fully all financial obligations towards the Vietnam State under laws regarded
to incomes make profits foreign investors remit abroad.
Article 5. Notification
of profits remittance abroad
Foreign investors may directly
make, or authorize enterprises in which they joint investment to make notices
on the profits remittance abroad according to the adopted forms attaching this
Circular send to direct managing tax offices of the enterprise in which foreign
investors join investment at least 7 working days before the profit remitted
abroad.
Article 6. Organization
of implementation
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In the process of
implementation, if have any problem, suggest the organizations and individuals
reflect for the Ministry of Finance to be supplementary guidanced.
SOCIALIST REPUBLIC OF VIET NAM
Independence - Freedom – Happiness
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NONTIFICATION
ON
THE OFFSHORE REMITTANCE OF PROFITS
Year...........
To:
.....................................
1. Name of foreign investor:
...........
Nationality:..
Individual
Organization
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Mọi chi tiết xin liên hệ:
ĐT: (028) 3930 3279 DĐ: 0906 22 99 66
Investment License No:
............................................ ........ Date:
.............................
Head office address of the
business: ......................................... ......................
Tax Code:
.............................................. ...................
3. The registration of profits
remitted abroad by foreign investors:
number
Target
Amount of profit
I
Amount of profits are shared
or earned in the period
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1
profits shared or earned from
investment activities
2
Other profits earned
II
Amounts of profit to be used
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reinvestment
2
Used for other purposes
III
The profit is remitted in this
period
4. Amount of profit suggested
remitting abroad this time:
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- In-kind (goods name, quantity,
weight and value):...............................
If you transfer money, drawn
from the account at the Bank no:........ The name of bank .........
I assure that all information is
correct and that we take full responsibility before law for the information
reported. /.
FOREIGN
INVESTORS
Signed, sealed (full name, job title)
(In cases authorization for enterprise is not required to sign.)
Date
LEGAL REPRESENTATIVE OF THE BUSINESS
Signed, sealed (full name, title)