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.
Summary of some new points of the Circular are as follows:
1. 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. ”
2. Regarding the setting up of receivable bad debt reserve:
– Like the regulations in the previous documents, the Circular still stipulates that the Debt reconciliation record is one of the documents to prove that the amount of unpaid debt is a basis for enterprises to set up funds. provision, however, this Circular adds: “In the absence of debt reconciliation, a written request for reconciliation of debt or debt collection documents sent by the enterprise (with postmark) electricity or confirmation of the delivery unit); ”This is a new and great remedy for cases where the debtor” refuses “to sign a Memorandum of Debt reconciliation with the Enterprise when it is insolvent.
– In addition, with regard to the provision for doubtful debts, the Circular stipulates that telecom service businesses will have separate provisions, which will be different from those of other businesses. ordinary karma.
3. Regarding the setting up of warranty for products, goods and services of construction works
– Adding the type of “Services” of construction works to objects to be set up for provision, which the previous documents have not mentioned.
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.