The Accounting Law governs the principles for accounting, audits, and organizational structure, for businesses to stay compliant in Vietnam.
The tax year in Vietnam is determined according to the calendar year, and a Vietnamese-based auditing company must conduct the audit. The financial reports should then be submitted to the local tax authority, Ministry of Finance, and the statistics office 90 days before the end of the fiscal year.
Auditing and compliance requirements
Investors should be aware that the audit and compliance requirements are different for a foreign-owned enterprise (FOE) and representative office (RO) in Vietnam.
Annual compliance for foreign-owned companies
FOEs are obligated to provide an annual audit report and the finalization of corporate and personal income taxation.
- The statutory audit requirements are as follows:
- Statement of income;
- Statement of financial position (profit and loss);
- Statement of changes in equity, if any; and
- Balance sheets.
Within 90 days after the end of the fiscal year, FOEs need to submit the audited reports to three government agencies:
- Provincial Department of Planning and Investment (DPI) or the Provincial Level Export Processing and Industrial Zone Department in the case of FOEs based in investment zones (IZs) or export processing zones (EPZs);
- Provincial level tax departments; and
- Provincial level statistical offices.
The financial period in Vietnam usually coincides with the calendar year. FOEs can choose from four fiscal periods with the 12-month period beginning in the first day of each quarter after registering with the Tax Department.
The financial reports should then be submitted to the local tax authority, Ministry of Finance, and the statistics office before the end of the fiscal year.
The four fiscal periods are:
- January 1 – December 31;
- April 1 – March 31;
- July 1 – June 30; or
- October 1 – September 30.
Annual compliance for Representative Offices
Representative offices are one of the simplest and fastest ways to establish a legal entity in Vietnam. Their reporting requirements are also more simplified compared to FOEs.
ROs are forbidden from directly conducting profit-generating activities and are limited to market research, developing trade contacts, and gather information on regulations and laws.