Profit remittance Vietnam rules look simple: finalise the accounts, pay the tax, notify the authority, transfer the money. In practice the transfer is where years of accumulated compliance shortcuts become visible, and groups regularly discover that profit earned three years ago cannot be moved.
This guide sets out the five pitfalls that stop remittances, in the order they usually appear.
Profit Remittance Vietnam Pitfall 1: Accumulated Losses
Profit may only be remitted where the company has no accumulated losses after the annual financial statements are approved. Distributable profit is assessed on a cumulative basis, not year by year.
A company that lost money in its first three years and made a profit in the fourth may have nothing distributable. Groups building profit remittance Vietnam assumptions into a return model should test the cumulative position rather than the current year, particularly where start-up losses were substantial.
Profit Remittance Vietnam Pitfall 2: Notification Timing
The company must notify the tax authority of the intended transfer within the prescribed period before it is made, after the corporate income tax finalisation return has been filed. The bank will require evidence of the notification.
Where a transfer is made without the notification, the position must be regularised before the next one, and the bank may decline further transfers until it is. Building the notification into the annual finance calendar avoids a scramble at the point the parent needs the cash.
Profit Remittance Vietnam Pitfall 3: Misrouted Historic Capital
Remittance flows through the direct investment capital account, and the bank reconciles the outbound transfer against the recorded inbound capital and the audited profit. Where charter capital was historically paid into an ordinary current account, the inbound leg cannot be evidenced.
This is the most common structural blocker and the hardest to fix retrospectively, because it requires reconstructing payment records and, in some cases, an amended registration. Our guide to the DICA account sets out the correct routing from the first capital call.
Profit Remittance Vietnam Pitfall 4: Unresolved Tax Exposures
Outstanding tax obligations, unpaid administrative penalties or an open audit will stop the transfer. Transfer pricing adjustments are a frequent cause, because an adjustment reduces distributable profit and may create an assessment that must be settled first.
Groups that plan a large remittance should run a compliance review three months beforehand. The alternative is discovering an exposure at the point of transfer, when the negotiating position with the authority is weakest. See our note on the transfer pricing audit.
Profit Remittance Vietnam Pitfall 5: Withholding and Treaty Relief
Dividends paid to a corporate foreign investor are not currently subject to a separate dividend withholding tax in Vietnam, but payments of interest, royalties and service fees to offshore affiliates are, and groups frequently plan to extract value through those channels instead.
Treaty relief on such payments requires beneficial ownership and, in practice, substance in the recipient jurisdiction. A holding company with no premises, personnel or decision-making will struggle to sustain a claim, and the shortfall becomes a cost of the structure rather than a saving. Our note on multi-layer ownership examines substance requirements.
Profit Remittance Vietnam: Getting the Sequence Right
The workable sequence is: close the year, complete the statutory audit, file the corporate income tax finalisation, pass the owner or shareholder resolution declaring the distribution, notify the tax authority, then instruct the bank with the audited accounts, the finalisation return, the notification and the resolution.
Where capital rather than profit is being returned, a different route applies, involving reduction of charter capital or transfer of the investment. Our guide to capital repatriation covers that path.
Frequently Asked Questions
Can profit be remitted more than once a year?
Remittance follows the finalised annual accounts. Interim distributions carry the risk of a later reduction in audited profit.
Is there a dividend withholding tax?
Dividends to corporate foreign investors are not currently subject to a separate withholding tax. Individual shareholders are taxed under the personal income tax regime.
What if the company is being dissolved?
Remaining assets are returned after tax clearance and creditor settlement, following the capital repatriation route rather than the profit route.
How long does a transfer take?
Days once the file is complete. The preparation, not the transfer, is the timeline.
Plan Your Repatriation
IVLF Advisors reviews the cumulative profit position, remediates capital account records, clears tax exposures and manages the notification and bank process. See also our tax practice and guidance from the Ministry of Finance. Contact our team.
This article is provided for general information only and does not constitute legal advice for any specific case. Regulations may change – please consult a qualified professional before acting. Should further analysis be required, please contact one of our lawyers below.
