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Accounting and Compliance in Vietnam

It is essential that businesses in Vietnam are compliant with standards given Vietnam’s strict compliance and high number of tax payments required each year.

Local and foreign-invested companies doing business in the country are required to comply with Vietnam Accounting Standards (VAS) when recording their financial transactions.

How can Level Advise help?

Level Advise and Associates can assist in all major areas of your business operations:

  • Bookkeeping

  • Financial Reporting/Financial Health check

  • Financial Due Diligence

  • Accounting Advisory

  • Budgeting and Financial Analysis

  • CFO and Finance Manager Function

  • Selection/Implementation of Accounting Software

The rapid pace of regulatory change in Vietnam requires experience and expertise from accounting teams. With decades of experience in the region, Level Advise and Associates understands the complexities involved in keeping accounting practices compliant. We endeavour to ensure that our services help clients operate effectively and within the law.

What entities are subject to the Vietnam accounting standarts?

All entities other than the representative office are subject to the Vietnam accounting standards. These include:

  • 100% foreign owned enterprise established in Vietnam;

  • Joint venture;

  • Public Private Partnership between a foreign or domestic

    enterprise and the government; and

  • Branch office.

What taxes apply in Vietnam?

ll taxes in Vietnam are imposed at the national level, i.e. there are no local, state or provincial taxes. Enterprises should pay tax in localities where they are headquartered or have duly registered branches.

Most companies and foreign investors in Vietnam are subject to the following major taxes:

  • Business license tax;

  • Corporate income tax;

  • Personal income tax;

  • Value-added tax;

  • Special consumption tax;

  • Foreign contractor tax; and

  • Customs duties.

What is a Chief Accountant and what do they do?

Organizations are required to have a Chief Accountant certified by the Ministry of Finance. Annual financial statements must be approved by the chief accountant and the legal representative.

The Chief Accountant is also responsible for:

  • Signing off the General Ledger;

  • Vouchers;

  • VAT invoices;

  • Taxation lodgments; and

  • Business connection between the tax office and the company.

What is the process for remitting profits from Vietnam?

Vietnam is fairly open to companies remitting profits to their respective markets, however there are a couple of restrictions that are currently enforced upon the remittance process. These limitations are based on the timeframe and financial position. Timeframe under Vietnamese law, profits may only be remitted once per year. The timing of this remittance is dictated by audit requirements that create a yearly window starting from March when profits are allowed to be remitted and tax obligations are fulfilled.

 

Financial position under current Vietnamese law, dividends may not be carried out during a year in which a company has not turned a profit or and has not completed all tax obligations in Vietnam.

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