On August 8, 2019, the Ministry of Finance issued Circular 48/2019 / TT-BTC guiding the setting up and handling of reserve fund at enterprises. Circular 48/2019 / TT-BTC (hereinafter referred to as “Circular”) takes effect from 10 October 2019. This Circular expires 03 previous Circulars: Circular 228/2009 / TT-BTC, Circular 34/2011 / TT-BTC, Circular 89/2013 / TT-BTC.
Regarding payment of reserve fund for the losses of financial investments, enterprises will not be allowed to set up risk provisions for outward investments, only risk for domestic financial investments. Specifically:
– In Clause 4, Article 3 of the Circular stipulates: “Article 3. General principles in setting up provisions: … 4. Enterprises do not set up risk provisions for offshore investments. ”
– At Point a, Clause 1, Article 5 of the Circular stipulates: “1. Securities investments: a) Objectives of making provisions are securities issued by domestic economic organizations in accordance with the law on securities owned by enterprises at the time of making financial statements. in the year, the company satisfies the following conditions: – Being listed or registered for trading on the domestic stock market that enterprises are investing; – Is a securities freely traded in the market and at the time of preparing the financial statement, the actual stock price in the market is lower than the value of securities investment recorded in the accounting book. ”
From the above analysis, it shows that Circular No. 48/2019 / TT-BTC has brought significant values ​​to Vietnamese enterprises, helping Vietnamese enterprises to solve a lot of difficulties in settling payments. The revenue is directly related to the amount of corporate income tax payable, especially there are more specific and feasible provisions for the reserve fund for doubtful debts. In addition, this Circular has unified all previous regulations which are scattered in many different documents related to deduction for reserve fund for devaluation of inventory, loss of investments, doubtful debts and warranty of products, goods, services and construction works at the enterprise, which creates favorable conditions for enterprises to grasp, understand and apply this provision on reality. Therefore, this Circular is a solid basis for many enterprises to minimize risks and maximize profits in their business processes.