Foreign investors, after completing the process of establishing an enterprise and receiving certificates (IRC and ERC), will then commence operation and business practices. For foreign investors’ business activities in Vietnam to proceed smoothly and comply with legal regulations, investors need to pay attention to some accounting tax regulations in Vietnam, so through this article, we would like to offer a quick Q&A in the hope of helping you find answers to the problems you are facing.

– Question: Are accounting books required to be in Vietnamese? Is it allowed to be in other languages?

– Answer: Accounting books of enterprises operating in Vietnam are required to be prepared in Vietnamese. If a foreign language must be used on accounting documents, accounting books, and financial statements whilst in Vietnam, Vietnamese and foreign languages ​​must be used simultaneously.

– Question: What are the basic tax obligations that a business must fulfil?

– Answer: Enterprises doing business in Vietnam will need to fulfil their obligation to pay licensing fees; Value-Added Tax corresponding to the business sectors in which the business operates (the VAT rate is different between business sectors); Corporate Income Tax on an enterprise’s revenue after deducting reasonable expenses; Personal income tax, whereby the enterprise will deduct the tax obligation that the employee is responsible for paying before paying income and the enterprise will pay on behalf of the employee.

Besides, depending on the business sectors’ field of activity as well as specific service transactions, enterprises will be responsible for declaring and paying other taxes such as Contractor tax, Special Consumption tax, Environmental protection tax, Export tax, Import tax, etc.

– Question: What are corporate income tax incentives?

– Answer: Foreign investors with new investment projects in Vietnam that are operating in the field of software production will enjoy preferential corporate income tax rates of 10% for 15 years from the date that the project has revenue.

In addition, enterprises are also exempted from tax for 4 years from the first year the enterprise has taxable income from the investment project.  There will also be a 50% reduction in tax payable (applying a tax rate of 10%) with a maximum of no more than the next 9 years. The tax exemption and tax reduction period is calculated continuously from the first year the enterprise has taxable income from a new investment project that enjoys tax incentives. If the enterprise has no taxable income in the first three years, from the first year of having revenue from a new investment project, the tax exemption or tax reduction period is calculated from the fourth year that the new investment project has revenue.

The tax exemption and tax reduction period for high-tech enterprises and agricultural enterprises applying high technology (according to the above regulations) is calculated from the year of issuance of the Certificate of Recognition as high-tech enterprises and agricultural enterprises applying high technology. Corporate income tax incentives only apply to enterprises that implement accounting, invoices, and vouchers and pay corporate income tax as declared.

– Question: Are foreign enterprises required to have a chief accountant immediately after establishing the enterprise?

– Answer: Foreign enterprises established under Vietnamese law are subject to the Law on Accounting. Therefore, foreign enterprises must arrange a chief accountant. If the unit cannot immediately appoint a chief accountant, it can arrange a person in charge of accounting or hire a chief accountant according to regulations. However, except for micro enterprises and support for small and medium enterprises, they can arrange a person in charge of accounting and are not required to arrange a chief accountant.

– Question: When is the deadline for submitting business tax declaration dossiers?

– Answer: The deadline for submitting tax declaration dossiers for monthly and quarterly taxes is specified as follows:

• No later than the 20th day of the month following the month in which tax obligations arise in cases of monthly declaration and payment;
•  No later than the last day of the first month of the quarter following the quarter, in which tax obligations arise in cases of quarterly declaration and payment.

The deadline for submitting tax declaration dossiers for taxes with annual tax periods is specified as follows:

• No later than the last day of the 3rd month from the end of the calendar year or fiscal year for annual tax finalization dossiers; no later than the last day of the first month of the calendar year or fiscal year for annual tax declaration dossiers;
• No later than the last day of the 4th month from the end of the calendar year for personal income tax finalization dossiers of individuals directly finalizing taxes;

The deadline for submitting tax declaration dossiers for taxes declared and paid each time the tax obligation arises is the 10th day from the date the tax obligation arises.

The deadline for submitting tax declaration dossiers in case of termination of operations, contract termination or business reorganization is no later than the 45th day from the date of the event.

We hope that the Q&A above has helped you in removing problems regarding some tax and accounting issues in Vietnam, as well as providing a basis for you to control your enterprise’s compliance in the tax and accounting work that your staff is performing.

Time of writing: 04/01/2024

The article contains general information which is of reference value, in case you want to receive legal opinions on issues you need clarification on, please get in touch with our Lawyer  at  info@cdlaf.vn

You can refer for more information:

• Procedures for Vietnamese Enterprises Regarding Outward Investment
• Transferring Profits to Vietnam and  how to handle Violations in Outward Investment Activities
• Are Processes and Regulations really necessary for Enterprises?