The company notified a transfer of two million US dollars, but on the day the bank executed the order the amount reaching the investor’s account, converted tranche by tranche, differed by several thousand dollars from the notified figure; in another case, the tax finalisation cut the profit down so that the planned transfer suddenly exceeded the share actually allocated. Both situations lead to the same practical question: must an amended notice be filed, and what happens if the difference is simply left alone until the tax office examines the file next year.
Applicable legal basis
The notification duty in Article 5 of Circular 186/2010/TT-BTC attaches to the amount intended to be transferred at the time of notice, but the hard limit of the regime is that cumulative actual transfers must never exceed the profit share allocated after finalisation. When reality departs from the plan, the mechanism is not a standalone amendment form with its own name, but a supplementary or amended notice sent by the company to the directly managing tax office, with an explanation of the variance and documents evidencing the amount actually transferred.
The character of the variance drives the handling. A technical variance arising from the exchange rate on the transfer date or from bank-side rounding does not change the investor’s total entitlement and is dealt with by an explanation supported by statements. A substantive variance arising when finalisation reduces the allocated profit means the planned transfer now breaches the permitted limit: the company must notify a downward amendment, and if money has already gone out above the limit, the excess must be resolved as the tax office directs, for instance by offsetting against a later tranche or by remitting it back.
Analysis for the company’s situation
How large a difference requires touching the file
The law sets no percentage or amount threshold below which a company may stay silent. The practical tests are whether cumulative transfers remain within the allocated profit share, and whether the file can explain every variance. A rate-driven difference of a few thousand dollars on a two-million transfer should still be recorded with one explanation line in that tranche’s file, because the cost of recording is close to zero while the cost of explaining, after the tax office finds an unexplained gap, is far higher. Conversely, any variance that pushes cumulative transfers to or beyond the allocated limit requires a formal amended notice without exception.
Leaving it alone: risk that accumulates over time
Left alone, the variance stays live in the tax office’s reconciliation data: the notice says one figure, the ICA statements say another. At the next remittance file examination the company will explain from a defensive position, and if transfers exceeded the allocated share, the consequences extend beyond a procedural penalty into treatment of the excess as an unfounded transfer with a remediation requirement. Small variances do not fade with time; they accumulate across years and tend to surface at the largest transfer, when the company has the least room to manoeuvre.
A record habit that makes amendments painless
Companies remitting profits regularly should keep a single tracking log for each financial year, recording for every tranche the notified amount, notice date, payment order amount, value date, applied exchange rate and the sum actually reaching the investor’s account. One reconciliation of that log against the tax finalisation at year end surfaces every variance while it is still small and easy to handle. The amended notice then becomes a short letter attached to a reconciliation table, instead of a multi-week file reconstruction when several years are left to pile up.
Procedure and document checklist
- Reconcile the notified amount against the amount actually transferred per bank documents immediately after each tranche.
- Classify the variance: technical (rate, rounding) or substantive (finalisation adjusting the allocated profit).
- For substantive variances, or any variance taking cumulative transfers beyond the allocated share, file an amended notice with explanation to the directly managing tax office.
- For small technical variances, keep an internal explanation with statements in the tranche file, ready to produce.
- Update the year’s remittance tracking log and reconcile it once more against the tax finalisation at year end.
Risks and practical notes
The principal risk is treating the notice as an estimate that need not match reality: the tax office does not reconcile on an estimate basis, it reconciles against the allocated profit limit, and every amount beyond that limit is traced to its origin. A second risk is the verbal amendment: accounting discusses the point with a tax officer by phone and considers it closed, but nothing exists in the file, and when a different examination team arrives the verbal explanation does not exist either. Every amendment, however small, must exist as a document bearing a receipt stamp or an electronic confirmation.
Frequently asked questions
What must be done when the actual remitted profit differs from the notified amount?
First reconcile the bank documents to pin down the variance and its cause. A rate or rounding difference is handled by an explanation kept with statements in the tranche file. A variance that changes the total permitted to be transferred, or that touches the allocated profit limit, requires an amended notice with explanation filed with the directly managing tax office within the same period.
Must an amended notice be filed?
Circular 186/2010/TT-BTC has no separate amendment form under its own name; the company acts by a supplementary or amended notice to the directly managing tax office with an explanation attached. This is a mandatory file step whenever the amount actually transferred changes the picture of what was notified, above all when finalisation reduces the allocated profit share.
How large a difference triggers an amendment?
No minimum threshold is set by law below which silence is allowed. The rule is that every variance must be explainable from the file: small technical variances are adequately covered by an explanation with statements, while any variance pushing cumulative transfers beyond the after-finalisation allocated share requires a formal amended notice and a plan for the excess.
What happens if the notice is not amended?
The variance persists in the reconciliation data between notices and capital account statements and will be raised at the next remittance file examination. If cumulative transfers exceeded the allocated profit share, the company faces not only a procedural penalty but also a requirement to remedy the excess transfer, explaining from a defensive position with no amendment document on file.
This article has been quality-reviewed by the FLAW AI Legal Council