Circular No. 85/2021/TT-BTC guiding certain contents regarding the collection, submission, and management of profits and dividends distributed to the State's investment capital in enterprises.

CIRCULAR

Guidelines on certain matters concerning the collection and payment of profits and dividends distributed to state capital invested in enterprises

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

Pursuant to the State Budget Law 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 for Investment in Business Operations dated November 26, 2014;

Pursuant to the Law on Corporate Income Tax dated June 3, 2008; the Law Amending and Supplementing Certain Provisions of the Law on Corporate Income Tax dated June 19, 2013;

Pursuant to the Law Amending and Supplementing Certain Provisions of Several Tax Laws dated November 26, 2014;

amending and supplementing certain forms of

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

Pursuant to the Government Decree No. 93/2017/NĐ-CP dated August 7, 2017 on financial regulations for credit organizations, branches of foreign banks, and supervision of financial management and assessment of the effectiveness of state capital investment in credit organizations wholly owned by the State and credit organizations with state capital;

Pursuant to the Government Decree No. 32/2018/NĐ-CP dated March 8, 2018 amending and supplementing certain provisions of the Government Decree No. 91/2015/NĐ-CP dated October 13, 2015 on state capital investment in enterprises and management and use of capital and assets in enterprises;

Pursuant to the Government Decree No. 140/2020/NĐ-CP dated November 30, 2020 amending and supplementing certain provisions of the Government Decree No. 126/2017/NĐ-CP dated November 16, 2017 on converting state-owned enterprises and limited liability companies wholly funded by state-owned enterprises into joint-stock companies; the Government Decree No. 91/2015/NĐ-CP dated October 13, 2015 on state capital investment in enterprises and management and use of capital and assets in enterprises; and the Government Decree No. 32/2018/NĐ-CP dated March 8, 2018 amending and supplementing certain provisions of the Government Decree No. 91/2015/NĐ-CP;

Pursuant to Decree No. 87/2017/NĐ-CP dated July 26, 2017, issued by the Government, stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

At the proposal of the Director General of the State Revenue总局局长的提议；

The Minister of Finance issues this Circular guiding certain matters concerning the collection and payment of profits and dividends distributed to state capital invested in enterprises.

Article 1. Scope of Regulation

This Circular specifies detailed procedures for collecting and paying into the state budget:

a) Remaining profits after tax and before setting up reserves (hereinafter referred to as remaining profits) for enterprises wholly owned by the State;

b) Dividends and cash profits distributed to state capital in joint-stock companies, limited liability companies with two or more shareholders, including commercial joint-stock banks, where the State has contributed capital, represented by Ministries, agencies at the level of ministries, government agencies, provincial People's Committees, and municipal People's Committees directly under the central government as the owners.

Article 2. Applicability

1. Enterprises wholly owned by the State, including:

a) A single-member limited liability company that is the parent company of state economic groups;

b) A single-member limited liability company that is the parent company of state-owned corporations;

c) A single-member limited liability company that is the parent company within a group of parent companies and subsidiaries;

d) An independent single-member limited liability company;

đ) Credit institutions wholly owned by the State.

2. Joint-stock companies, limited liability companies with two or more shareholders, including commercial joint-stock banks with state contributions, where the State is represented by Ministries, agencies at the level of ministries, government agencies, provincial People's Committees, and municipal People's Committees directly under the central government as the owners.

3. State capital ownership representatives.

4. State capital investors' representatives in joint-stock companies, limited liability companies with two or more shareholders.

5. Other agencies, organizations, and individuals related to state capital investment, management, and use in state-owned enterprises.

Article 3. Revenues from the remaining profits of enterprises held 100% by the State shall be collected into the state budget.

1. Determining the remaining profits to be paid into the state budget.

The remaining profits of enterprises specified in Clause 1 of Article 2 of this Circular that must be paid into the state budget are determined according to accounting laws after deducting the following items:

a) Losses of previous years as stipulated by corporate income tax laws;

b) Scientific and technological development fund contributions as prescribed (if not deducted when determining accounting profit);

c) Corporate income tax payable as prescribed by corporate income tax laws;

d) Distributions and fund allocations as prescribed in Clause 1, Clause 2, and Clause 3 of Article 31 of Decree No. 91/2015/NĐ-CP dated October 13, 2015 of the Government on State capital investment in enterprises and management and use of capital and assets in enterprises, which has been amended and supplemented by Decree No. 32/2018/NĐ-CP dated March 8, 2018 of the Government, or distributions and fund allocations as prescribed in Clause 1, Clause 2, and Clause 3 of Article 21 of Decree No. 93/2017/NĐ-CP dated August 7, 2017 of the Government on financial regulations for credit organizations, foreign bank branches, and supervision of financial performance and assessment of the effectiveness of State capital investment in credit organizations with 100% State capital and credit organizations with State capital, and any subsequent amendments and supplements (if applicable).

2. Determining the profits of enterprises held 100% by the State when investing capital in other enterprises.

a) The remaining profits of subsidiaries held 100% by the parent company are determined based on business results and financial reports as prescribed by laws on State capital investment in enterprises. The parent company decides to collect the remaining profits of subsidiaries and record them as financial revenue to pay into the state budget.

b) Dividends and profits distributed from joint-stock companies and limited liability companies with two or more members having State capital investment are determined based on business results and financial reports as prescribed by laws on State capital investment in enterprises and decisions on dividend distribution and profit allocation made by the General Shareholders' Meeting or the Board of Directors of joint-stock companies and limited liability companies with two or more members. Enterprises held 100% by the State have the responsibility to collect dividends and distributed profits and record them as financial revenue to pay into the state budget.

c) The remaining profits of subsidiaries held 100% by the parent company, dividends, and profits distributed from joint-stock companies and limited liability companies with two or more members having State capital investment as prescribed in points a and b of this clause are consolidated to determine the remaining profits to be paid into the state budget as prescribed in Clause 1 of this Article.

Article 4. Collection into the state budget of dividends and profits distributed from State capital invested in joint-stock companies and limited liability companies with two or more members, represented by Ministries, ministerial-level agencies, government agencies, provincial People's Committees, and centrally-administered city People's Committees.

1. Dividends and profits distributed to be paid into the state budget are determined based on business results and financial reports as prescribed by laws on State capital investment in enterprises and the proportion of State capital contribution decided by the General Shareholders' Meeting or the Board of Directors. Annual profit distribution plans at enterprises shall comply with the principles prescribed in Clause 17 of Article 2 of Decree No. 140/2020/NĐ-CP dated November 30, 2020 of the Government.

2. Dividends and profits distributed to be paid into the state budget as prescribed in Clause 1 of this Article include:

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

b) Dividends and profits from previous years distributed during the fiscal year.

3. Joint-stock companies and limited liability companies with two or more members having State capital have the responsibility to pay into the state budget the portion of dividends and profits distributed to State shareholders.

Article 5. Division of State budget

1. Enterprises with 100% state-owned charter capital, joint-stock companies, and limited liability companies with two or more members having state-owned capital contributions shall remit 100% to the central government budget for the remaining profits and dividends, profits to be distributed that must be paid into the state budget, represented by ministries, ministerial-level agencies, and agencies under the Government.

2. Enterprises with 100% state-owned charter capital, joint-stock companies, and limited liability companies with two or more members having state-owned capital contributions represented by provincial People's Committees and municipal People's Committees directly under the Central Government shall remit 100% to the local government budget for the remaining profits and dividends, profits to be distributed that must be paid into the state budget.

Article 6. Declaration, payment, and handling of violations

1. The declaration, payment, and handling of violations regarding the declaration and payment of remaining profits, dividends, and profits to be distributed of enterprises with state-owned capital contributions shall be carried out in accordance with the provisions of the Law on Tax Administration and guiding documents.

2. Declaration and payment to the state budget:

a) For the remaining profits of enterprises with 100% state-owned charter capital, enterprises shall declare and pay the state budget according to the regulations of tax management laws after issuing financial statements in accordance with accounting laws.

b) For joint-stock companies and limited liability companies with two or more members having state-owned capital contributions represented by ministries, ministerial-level agencies, agencies under the Government, and provincial People's Committees and municipal People's Committees directly under the Central Government, these companies have the responsibility to declare and pay the state budget according to the regulations of tax management laws after the Shareholders' Meeting Resolution and the Board of Directors' Decision.

3. For enterprises with 100% state-owned charter capital belonging to the category required to pay remaining profits into the state budget as stipulated in Article 3 of this Circular, after officially transitioning to operate as a joint-stock company, if there are remaining profits not yet paid into the state budget, the enterprise shall be responsible for paying this remaining profit into the state budget.

Article 7. Effective Date

This Circular takes effect from January 1, 2022, applicable to the settlement of remaining profits required to be paid into the state budget for the year 2021, and replaces Circular No. 61/2016/TT-BTC dated April 11, 2016, issued by the Ministry of Finance guiding the collection, payment, and management of profits, dividends distributed for state-owned investment capital at enterprises.

Article 8. Responsibility for Implementation

1. Ministries, ministerial-level agencies, agencies under the Government, and provincial People's Committees and municipal People's Committees directly under the Central Government, which are agencies representing state-owned capital at enterprises, shall be responsible for:

a) Directing state-owned capital representatives at enterprises to urge enterprises to implement declarations and payments to the state budget for remaining profits, dividends, and profits to be distributed.

b) Inspecting and supervising enterprises to declare and pay state budget revenues according to the provisions of this Circular.

2. Enterprises with 100% state-owned charter capital shall be responsible for:

a) Implementing payments to the state budget for the remaining profits of the enterprise.

b) Urging and supervising subsidiary companies and enterprises with state-owned capital contributions to pay remaining profits, dividends, and profits to be distributed in accordance with the provisions of the Law on Management and Use of State Capital Investment in Production and Business Operations at Enterprises and guiding documents.

3. State-owned capital representatives at enterprises with state-owned capital contributions shall be responsible for:

a) Reporting to the agency representing the owner about the annual profit distribution plan of the enterprise they represent to participate in opinions, voting, and decisions at the Shareholders' Meeting and Board of Directors meetings in accordance with the law on management and use of state capital investment in production and business operations at enterprises.

b) Voting to distribute dividends when all conditions stipulated by the Enterprise Law and the opinion of the agency representing state-owned capital are met; urging and supervising joint-stock companies and limited liability companies with two or more members to pay dividends and profits to be distributed for state-owned capital contributions.

4. Responsibilities of the tax authority

a) The direct managing tax authority shall be responsible for organizing the implementation of the work of managing the collection of remaining profits required to be paid into the state budget of enterprises with 100% state-owned charter capital and dividends, profits to be distributed for state-owned investment capital at joint-stock companies and limited liability companies with two or more members within its jurisdiction.

b) Guiding, promoting, and supporting enterprises belonging to the category required to pay remaining profits into the state budget and dividends, profits to be distributed to implement the contents of this Circular.

During the implementation process, if there are difficulties, organizations and individuals are requested to promptly reflect to the Ministry of Finance for research and resolution./.