Consulting services related to the transfer of profits abroad in Vietnam

How to transfer profits abroad is a matter that any foreign investor is interested in when deciding to invest in projects in Vietnam. Let’s follow the article on consulting services related to transferring profits abroad from Viet An tax agent to get more knowledge and useful information for the purpose of legally transferring investment profits abroad.

Conditions for transfer of profits abroad

If you want to transfer profits abroad, investors first need to fulfill all financial obligations in accordance with the law when carrying out business investment activities in the territory of Vietnam. In addition, the following conditions should be met:

• It is necessary to fulfill the obligations required by the tax authority at the end of the investment project in Vietnam.
• Submit financial statements (Audited reports) and CIT finalization returns in the fiscal year.
• On the financial statements on account 4211 (undistributed after-tax profit of the previous year) and account 4212 (undistributed after-tax profit of this year), there is no carry-over of accumulated losses to the next year.
• Submit a dossier to notify the managing tax authority about the transfer of profits abroad.

Forms of remittance of profits abroad

Viet An Tax Agent provides consulting services related to the transfer of profits abroad in 2 forms:

• In kind: The investor will convert the value in kind in accordance with the law on import and export of goods and other relevant laws.
• In Vietnamese currency or foreign currency: Must comply with the law on foreign exchange and assess the exchange rate difference.

Thus, investors have the right to decide which form of profit transfer. However, such form must be inscribed on the dossier of notice of remittance of profits abroad submitted to the tax agency directly managing it.

When is the time to transfer profits abroad

Investors can choose the time to transfer profits from abroad investment activities on a yearly basis or until the end of investment activities in Vietnam.

The amount of profits allowed to be transferred abroad is called the net profit earned from direct capital investment activities. This profit is determined on the audited financial statements and the corporate income tax finalization declaration of the locality where the investment capital is located.

• Annual profits transferred abroad are determined according to the formula:

Profits from capital investment activities divided (when they are shareholders) or collected at the end of the fiscal year from direct investment activities + Other profits from the previous year that have not been fully transferred to – Amounts used or committed to be used by foreign investors for the purpose of reinvestment in the territory of Vietnam + Profits used by investors used to serve production, business or individuals of investors in Vietnam.

• Profits earned by investors in the process of direct capital investment in the territory of Vietnam = Profits to be used for reinvestment purposes + Profits that have been transferred abroad + Profits used for other spending purposes of investors in Vietnam.

Some other notes for investors as well as businesses

When using consulting services related to the transfer of profits abroad from Viet An tax agent, the agent will carry out the following procedures on behalf of the investor or business:

• Notice of remittance of profits abroad and submission to the tax authority directly managing it: Note that the time limit for making the notification is 7 working days in advance.
• Monitor and reprocess dossiers according to the feedback of the managing tax authority.
• Fulfillment of tax obligations (if any).
• Other documents are attached to confirm the amount of profits transferred abroad.

What does the dossier of transfer of profits abroad include?

For profits remitted to the organization

The dossier for remittance of profits to the organization includes:

• Minutes of the meeting of the board of directors if the company operates under the model of a joint-stock company or minutes of the meeting of the board of members for the type of limited liability company with 2 or more members.
• Notice of remittance of profits abroad.

For profits transferred to the home country for individuals

• Minutes of the meeting of the board of directors if the company operates under the model of a joint-stock company or minutes of the meeting of the board of members for the type of limited liability company with 2 or more members.
• Documents related to PIT of individuals engaged in capital investment activities.
• Notice of remittance of profits abroad to individuals.

Submission location and processing time

After fully preparing the dossier, investors need to send a notice of remittance of profits abroad according to the form issued under Circular 186/2010/TT-BTC to the tax authority directly managing investment activities. The processing time for applications is at least 1 working week.

Consulting services related to abroad profit transfer of Viet An tax agent

Advising businesses and investors when investing in projects, domestic and foreign investments, and how to legally transfer profits abroad.

Consulting on the form of dossier preparation and project construction licensing.

Advising on issues related to the transfer of profits abroad.

Please contact Viet An tax agent if you have any problems related to the issue of transferring profits abroad or legal issues related to Vietnamese tax laws.