After generating profits in Vietnam, many foreign-invested enterprises have to remit their profits abroad for investment, expenses payment,… Therefore, Vietnamese law has many provisions on the above issues as follows:
1. Annual profit:
Annual profit remitted abroad is the profit shared or earned by a foreign investor in a fiscal year from direct investment activities based on audited financial statements, tax finalization declarations, and corporate incomes.
plus (+)
Other profits such as the unearned profit from the previous years;
minus (-)
- The expenditure which foreign investors have used or committed to re-invest in Vietnam;
- The profits used by foreign investors for their operations, business production;
- The personal spendings of foreign investors in Vietnam.
Time of transfer:
- At the end of the fiscal year;
- After the foreign enterprise has fulfilled its financial obligations toward the Vietnamese State by the law;
- The audited financial statements and the fiscal year corporate income tax finalization declarations submit to the direct tax administration.
2. Profits upon the termination of operations in Vietnam:
Definition: Profits transferred abroad at the end of investment activities in Vietnam are the total profits earned by foreign investors during their direct investment in Vietnam.
minus (-)
- Profits used for reinvestment;
- Profits remitted abroad during the operations of foreign investors in Vietnam;
- The other spendings of investors use in Vietnam.
Time of transfer:
- Upon the completion of direct investment activities in Vietnam after the enterprise in which the foreign investor participates in investment has fulfilled its financial obligations toward the Vietnamese State by the law;
- The audited financial statements and corporate income tax finalization declarations submit to the direct tax administration and at the same time meet fulfilling obligations under the Law on Tax Administration.
Note:
In the year which still has accumulated loss in the financial statements of the enterprises after carrying forward losses by the tax law, foreign investors are not allowed to transfer abroad the profits.
3. Mode of profit transfer
a/ Profits remitted abroad in cash will be through direct investment capital accounts
Note:
If the enterprise with foreign direct investment capital is closed their direct investment accounts, Foreign investors will not be allowed to use the direct investment capital account.
Instead, The investors can use the foreign currency payment account, Vietnamese dong current accounts opened at an authorized bank to transfer profits legally.
The cases of closing direct investment accounts in enterprises with foreign direct investment capital:
- Due to the dissolution or termination of the operation of the enterprise.
- Or the transfer of investment capital changes the original legal entity of the FDI enterprise.
b/ Profits in kinds: Goods are not banned by the export-import law.
The conversion of the value of in-kind shall comply with the law on merchandises import and export and relevant provisions.
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