Circular 85/2021/TT-BTC collection and remittance of profits and dividends distributed for the State capital amounts invested in enterprises

CIRCULAR

Guiding the collection and remittance of profits and dividends distributed for the State capital amounts invested in enterprises

Pursuant to the Law on Tax Administration dated June 13, 2019;

Pursuant to the Law on State Budget dated June 25, 2015;

Pursuant to the Law on Enterprises dated June 17, 2020;

Pursuant to the Law on Management and Use of State Capital Invested in Production and Business at Enterprises dated November 26, 2014;

Pursuant to the Law on Enterprise Income Tax dated June 3, 2008; the Law Amending and Supplementing a Number of Articles of the Law on Enterprise Income Tax dated June 19, 2013;

Pursuant to the Law Amending and Supplementing a Number of Articles of the Laws on Taxes dated November 26, 2014;

Pursuant to the Government’s Decree No. 126/2020/ND-CP dated October 19, 2020, detailing a number of articles of the Law on Tax Administration;

Pursuant to the Government’s Decree No. 91/2015/ND-CP dated October 13, 2015, on investment of state capital in enterprises and management and use of capital and assets at enterprises;

Pursuant to the Government’s Decree No. 93/2017/ND-CP dated August 7, 2017, on the financial regime applicable to credit institutions and foreign bank branches and financial supervision and assessment of efficiency of state capital investment at credit institutions with 100% state-owned charter capital and credit institutions with state capital;

Pursuant to the Government’s Decree No. 32/2018/ND-CP dated March 8, 2018, amending and supplementing a number of articles of the Government’s Decree No. 91/2015/ND-CP dated October 13, 2015, on investment of state capital in enterprises and management and use of capital and assets at enterprises;

Pursuant to the Government’s Decree No. 140/2020/ND-CP dated November 30, 2020, amending and supplementing a number of articles of the Government’s Decree No. 126/2017/ND-CP dated November 16, 2017, on transformation of state enterprises and single-member limited liability companies with 100% state enterprise-invested charter capital into joint stock companies; the Government’s Decree No. 91/2015/ND-CP dated October 13, 2015, on investment of state capital in enterprises and management and use of capital and assets at enterprises and Government’s Decree No. 32/2018/ND-CP dated March 08, 2018, amending and supplementing a number of articles of the Decree No. 91/2015/ND-CP;

Pursuant to the Government’s Decree No. 87/2017/ND-CP dated July 26, 2017, defining the functions, tasks, powers and organizational structure of the Ministry of Finance;

At the proposal of the Director General of Taxation;

The Minister of Finance promulgates the Circular guiding the collection and remittance of profits and dividends distributed for the state capital amounts invested in enterprises.

Article 1. Scope of regulation

This Circular details the collection and remittance into the state budget of:

a) After-tax profits remaining after making deductions for funds (hereinafter referred to as remaining profits) for enterprises in which the State holds 100% of charter capital;

b) Dividends and profits in cash distributed for the state capital amounts invested in joint-stock companies, limited liability companies with two or more members whose capital contribution of the State is represented by ministries, ministerial-level agencies, Government-attached agencies and People’s Committees of provinces and centrally-run cities.

Article 2. Subjects of application

1. Enterprises in which the State holds 100% of charter capital, including:

a) Single-member limited liability companies being parent companies of state economic groups;

b) Single-member limited liability companies being parent companies of state corporations;

c) Single-member limited liability companies being parent companies in parent company-subsidiary groups;

d) Independent single-member limited liability companies;

dd) Credit institutions in which the State holds 100% of charter capital.

2. Joint-stock companies and limited liability companies with two or more members, including joint-stock commercial banks whose capital contribution of the State is represented by ministries, ministerial-level agencies, Government-attached agencies and People’s Committees of provinces and centrally-run cities.

3. Representative agencies of state capital owners.

4. Representatives of state capital invested in joint-stock companies and limited liability companies with two or more members.

5. Other agencies, organizations and individuals involved in investment, management and use of state capital at state enterprises.

Article 3. Collection into the state budget for remaining profits of enterprises in which the State holds 100% of charter capital

1. Determination of remaining profits payable to the state budget

The remaining profits payable to the state budget of enterprises specified in Clause 1, Article 2 of this Circular refer to the profits determined in accordance with law provisions on accounting after deducting the following amounts:

a) Offsetting losses in the previous year in accordance with the law on enterprise income tax;

b) Making deductions for the Science and Technology Development Fund as prescribed by law provisions (if not yet deducted from expenses when determining accounting profits);

c) Paying enterprise income tax in accordance with the law on enterprise income tax;

d) Distributions and deductions for funds as prescribed in Clauses 1, 2 and 3, Article 31 of the Government’s Decree No. 91/2015/ND-CP dated October 13, 2015, on investment of state capital in enterprises and management and use of capital and assets at enterprises, amended and supplemented by the Government’s Decree No. 32/2018/ND-CP dated March 8, 2018, or distributions and deductions for funds as prescribed in Clauses 1, 2, and 3, Article 21 of the Government’s Decree No. 93/2017/ND-CP dated August 7, 2017, on the financial regime applicable to credit institutions and foreign bank branches and financial supervision and assessment of efficiency of state capital investment at credit institutions with 100% state-owned charter capital and credit institutions with state capital and its amending and supplementing documents (if any).

2. Determination of profits of enterprises in which the State holds 100% of charter capital when investing capital in other enterprises

a) Remaining profits of subsidiaries in which their parent companies hold 100% of charter capital shall be determined on the basis of production and business results, financial statements in accordance with law provisions on investment of state capital in enterprises. The parent companies shall decide on the collection of remaining profits of the subsidiaries and account their financial revenues for remittance into the state budget.

b) Dividends and profits distributed from joint-stock companies and limited liability companies with two or more members with capital contribution by enterprises in which the State holds 100% of charter capital shall be determined on the basis of production and business results, financial statements in accordance with law provisions on investment of state capital in enterprises and the decision on dividend and profit distribution of the General Meeting of Shareholders or the Board of Members of joint-stock companies and limited liability companies with two or more members. Enterprises in which the State holds 100% of charter capital shall be responsible for collecting the distributed dividends and profits and accounting financial revenues for remittance into the state budget.

c) Remaining profits of subsidiaries in which their parent companies hold 100% of charter capital, dividends and profits distributed from joint stock companies and limited liability companies with two or more members with capital contribution by enterprises in which the State holds 100% of charter capital as prescribed at Points a and b of this Clause shall be aggregated to determine the remaining profits to be remitted into the state budget in accordance with Clause 1 of this Article.

Article 4. Collection into the state budget for dividends and profits distributed for the state capital amounts invested in joint-stock companies and limited liability companies with two or more members represented by ministries, ministerial-level agencies, Government-attached agencies and People’s Committees of provinces and centrally-run cities

1. Distributed dividends and profits payable to the state budget shall be determined on the basis of production and business results, financial statements in accordance with the law on investment of state capital in enterprises, and the ratio of State capital contribution decided by the General Meeting of Shareholders or the Board of Members. The plan for distribution of annual after-tax profits at enterprises shall comply with the principles as specified in Clause 17, Article 2 of the Government’s Decree No. 140/2020/ND-CP dated November 30, 2020.

2. Distributed dividends and profits payable to the state budget specified in Clause 1 of this Article include:

a) Dividends and profits temporarily distributed in the fiscal year (if any);

b) Dividends and profits of previous years distributed in the fiscal year.

3. Joint-stock companies and limited liability companies with two or more members with State capital contribution shall remit into the state budget the dividends and profits distributed to state shareholders.

Article 5. State budget distribution

1. Enterprises in which the State holds 100% of charter capital, joint-stock companies, and limited liability companies with two or more members whose State capital contribution is represented by ministries, ministerial-level agencies, and Government-attached agencies shall remit into the central budget 100% of the remaining profits, distributed dividends and profits payable to the state budget.

2. Enterprises in which the State holds 100% of charter capital, joint-stock companies, and limited liability companies with two or more members whose State capital contribution is represented by People’s Committees of provinces and centrally-run cities shall remit into the local budget 100% of the remaining profits, distributed dividends and profits payable to the state budget.

Article 6. Declaration, remittance and handling of violations

1. The declaration, remittance and handling of violations in the declaration and remittance of remaining profits, distributed dividends and profits of enterprises with State capital contribution shall comply with the Law on Tax Administration and other guiding documents.

2. Declaration and remittance into the state budget:

a) With regard to the remaining profits of enterprises in which the State holds 100% of charter capital, the enterprises shall declare and remit into the state budget in accordance with law provisions on tax administration after the financial statements are issued in accordance with law provisions on accounting.

b) With regard to joint-stock companies and limited liability companies with two or more members represented by ministries, ministerial-level agencies, government-attached agencies and People’s Committees of provinces and centrally-run cities, such companies shall declare and remit into the state budget in accordance with law provisions on tax administration after the resolution of the General Meeting of Shareholders and the Board of Members are issued.

3. With regard to enterprises in which the State holds 100% of charter capital subject to cases of remitting remaining profits, such enterprises must remit into the state budget in accordance with Article 3 of this Circular after officially switching to operate in the form of joint-stock companies. In cases where the remaining profits have not yet been remitted into the state budget (if any), the enterprises shall remit such amount into the state budget.

Article 7. Effect

This Circular takes effect from January 1, 2022, applies to the period of finalization of remaining profits payable to the state budget in 2021 and replaces the Ministry of Finance’s Circular No. 61/2016/TT-BTC dated 11 April 2016, guiding the collection, remittance and management of profits and dividends distributed for the state capital amounts invested in enterprises.

Article 8. Responsibilities for implementation

1. Ministries, ministerial-level agencies, Government-attached agencies, People’s Committees of provinces and centrally-run cities that are representative agencies of state capital at enterprises shall:

a) Direct representatives of state capital at enterprises to urge the enterprises to declare and remit the remaining profits, distributed dividends and profits into the state budget.

b) Inspect and supervise enterprises that declare and remit state budget revenues in accordance with this Circular.

2. Enterprises in which the State holds 100% of charter capital shall:

a) Remit remaining profits of enterprises into the state budget.

b) Urge and supervise subsidiaries and enterprises with capital contribution to remit the remaining profits, distributed dividends and profits in accordance with the Law on Management and Use of State Capital Invested in Production and Business at Enterprises and guiding documents.

3. Representatives of state capital amounts at enterprises with State capital contribution shall:

a) Report to owner’s representative agencies on the plan for annual distribution of after-tax profits of enterprises of which they act as the capital representatives for consulting, voting and deciding at the General Meeting of Shareholders and the meeting of the Board of Members in accordance with law provisions on management and use of state capital invested in production and business at enterprises.

b) Vote to pay dividends when all conditions are satisfied as prescribed in the Law on Enterprises and opinions of representative agencies of state capital owner; urge and supervise joint-stock companies and limited liability companies with two or more members to remit dividends and profits distributed for the State capital contribution.

4. Responsibilities of tax authorities

a) Directly managing tax authorities shall be responsible for managing the collection of remaining profits payable to the state budget of enterprises in which the State holds 100% of charter capital and dividends and profits distributed for the state capital amounts invested in joint-stock companies and limited liability companies with two or more members under their management.

b) Guiding, propagating and supporting enterprises subject to cases that must remit remaining profits payable to the state budget, and distributed dividends and profits in accordance with this Circular.

Any problems arising in the course of implementation shall be promptly reported to the Ministry of Finance for consideration and settlement./.

For the Minister

The Deputy Minister

TRAN XUAN HA