Financial Auditing and Annual Compliance Services in Vietnam

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Top Audit Firm in Vietnam2023-12-22T18:03:16+08:00

Financial auditing and annual compliance are indispensable components for foreign-owned enterprises (FOEs) and representative offices (ROs) operating within the jurisdiction of Vietnam. These vital processes entail a thorough assessment of financial statements, ensuring the accuracy and fairness of recorded financial transactions. In this comprehensive guide, we will delve into the crucial aspects of financial audits and annual compliance requirements for FOEs and ROs in Vietnam. These processes go beyond mere regulatory compliance; they serve as essential tools for optimising financial health, enhancing tax efficiency, and establishing robust internal control systems to safeguard against fraudulent activities.

Annual Finalization

Accounting Periods

Vietnam typically adheres to a standard accounting period, aligning with the calendar year, spanning from the 1st of January to the 31st of December.
However, businesses, upon completing their registration with both the Business Registration Office and the Tax Department, enjoy the flexibility to adjust their accounting periods to 12-month durations commencing on the first day of each quarter.

Filing of Annual Financial Statements

Foreign-owned companies in Vietnam must conduct audits and furnish annual financial reports within prescribed timeframes. These annual financial statements must be submitted to various governmental bodies, including the:

  1. General Statistics Office
  2. Municipal Department of Finance
  3. Ministry of Planning and Investment
  4. Local tax office

In addition, businesses operating within export processing zones (EPZs) or industrial zones (IZs) may be obligated to provide statements to the zone’s management board to qualify for tax holiday incentives regarding their finance.

Special Finalization Requirements

Certain enterprises operating in specialised sectors might have specific reporting obligations to relevant authorities.

E.G: Software developers are mandated to provide reports on software production to the Department of Information and Communication.

Retention of Documentation

In our role at Paul Hype Page, we provide annual finalisation services where businesses are mandated to preserve various documents generated throughout the accounting process.

The retention duration varies based on the type of documentation:

Audit Procedures for FOEs and ROs

FOE Compliance Process

Foreign-owned enterprises (FOEs) are required to adhere to a compliance process, which also extends to joint ventures (JVs). This process encompasses the preparation of a mandatory annual audit report and the finalisation of corporate and personal income taxes. Businesses need to provide this information to various government entities to enable the repatriation of profits generated from their activities.

Step 1: Prepare Statutory Annual Audit Report

Every FOE must produce annually audited financial statements that align with Vietnamese Accounting Standards (VAS). These financial statements must undergo external audits conducted by independent auditors. The mandatory audit criteria include a thorough examination of the following:

  1. Income statement
  2. Statement of financial status
  3. Statement of equity change
  4. Cash flow statement
  5. Balance sheet
  6. Associated annotations

Furthermore, individuals and entities are advised to evaluate their Goods and Services Tax (GST) obligations and fulfil the necessary tax obligations.


FOEs must present audited reports to various government departments within 90 days from the end of the calendar or fiscal year. These departments include the Provincial Department of Planning and Investment, provincial-level statistical offices, Municipal Department of Finance, and the tax department. Electronic submissions are also an option, with an electronic confirmation received upon successful submission.

Step 2: CIT Finalization

Foreign-owned enterprises in Vietnam are obligated to perform an annual Corporate Income Tax (CIT) finalisation, with the standard tax year aligning with the calendar year. It’s imperative for businesses to meticulously track their revenue streams to ensure that all necessary income is included in the finalisation reports. Following this review, taxes can be significantly reduced or even avoided.

Requisite Documentation

When finalising CIT, enterprises should prepare CIT reports in accordance with specific guidelines. This includes:

  1. Form 03/TNDN CIT finalization statement
  2. Annual financial statements
  3. Relevant documents, along with any necessary annexes.


The finalization reports should be presented to the tax authorities by the final day of the third month following the closure of the annual accounting period. In cases of dissolution, contract termination, or corporate ownership changes, the tax finalization declarations must be submitted by the taxpayers within 45 days after the date of these modifications.

Step 3: Personal Income Tax (PIT) Finalization

FOEs are responsible for finalising all Personal Income Tax (PIT) matters for their respective employees, including salary deductions made during the year.

The necessary documentation includes:

Form No. 05/QT PIT finalisation statement
Form No. 05-1/BK-QTT-TNCN Comprehensive list of taxable income and salary deductions
Form No. 05-3/BK-QTT-TNCN Comprehensive list of employees’ registered dependents.

PIT Deadlines

The deadlines for submitting PIT finalisation to the tax authorities align with those of CIT finalisation, with variations depending on the specific department of taxation in the province or city where the enterprise operates.

Step 4: Social Insurance Finalization

The social insurance scheme is mandatory for all employees, both Vietnamese and foreign, who work in Vietnam under employment contracts.

Step 5: Profit Remittance

Once tax finalisation is completed or investment projects in Vietnam are successfully wrapped up, it becomes feasible to transfer profits to offshore accounts, contingent upon the fulfilment of all financial commitments to the Vietnamese government. In the case of businesses with continuous investments in Vietnam, profit remittance is permissible as long as the enterprise has not suffered any losses.


FOEs must notify the relevant tax office at least seven working days before the planned transfer or remittance of profits following tax finalisation.

Annual Compliance for Representative Offices

Annual Reports

Compared to FOEs, representative offices (ROs) have simplified reporting requirements. ROs are not permitted to engage in profit-generating activities and are restricted to tasks like market research, building trade connections, and gathering information on legal regulations. The yearly reports for ROs should include basic information, a human resources report, and a report on their activities for the previous year.

Key Considerations for Annual Auditing in Vietnam

Allow Enough Time

Companies must allocate sufficient periods of time for the auditing process and ensure that key staff members are present during the audit. This ensures that all audit-related queries can be promptly addressed, expediting the process.

Go Digital

With the advent of online accounting and invoicing software, businesses can streamline document preparation for audits. Automation of document categorization and storage through digital means can simplify the audit process, aligning with Vietnam’s digital transformation goals.

Profit Remittance

FOEs must undergo an annual financial statement audit as a prerequisite for repatriating incomes to their respective markets. This entails a statutory audit, audited financial reports, and the finalisation of tax filings. These yearly compliance steps serve not only as a legal obligation but also provide an opportunity for internal financial well-being.

Your Questions, Answered

Auditing a company can be daunting – here are the top questions regarding Auditing Services in Vietnam compiled to clear your doubts!

What are the reporting requirements for representative offices (ROs) in Vietnam?2023-11-10T20:19:20+08:00

ROs have simplified reporting requirements, including basic information, a human resources report, and a report on their activities for the previous year.

How can businesses in Vietnam streamline their audit processes?2023-11-10T20:19:16+08:00

Businesses can allocate enough time, leverage digital accounting and invoicing software, and ensure key staff members are present during the audit to address queries promptly.

What are the key steps in the audit process for FOEs in Vietnam?2023-11-10T20:19:13+08:00

FOEs must prepare statutory annual audit reports, undergo external audits, and fulfill Corporate Income Tax (CIT) and Personal Income Tax (PIT) finalization requirements within specific deadlines.

What is the documentation retention periods for different types of documents in Vietnam?2023-11-10T20:19:07+08:00

The retention periods vary – 5 years for management and operations documents, 10 years for accounting data, books, financial statements, and reports from independent audit firms, and indefinite periods for documents of strategic importance.

Which governmental bodies must FOEs submit annual financial statements to in Vietnam?2023-11-10T20:19:04+08:00

FOEs in Vietnam must submit annual financial statements to the General Statistics Office, Municipal Department of Finance, Ministry of Planning and Investment, Local tax office, and, if applicable, the zone’s management board for tax incentives.

What is the standard accounting period in Vietnam, and can businesses adjust it?2023-11-10T20:18:56+08:00

The standard accounting period in Vietnam aligns with the calendar year (January 1 to December 31). However, businesses can adjust their accounting periods to 12-month durations starting on the first day of each quarter upon completing registration with relevant authorities.

Why are financial audits and annual compliance essential for foreign-owned enterprises (FOEs) and representative offices (ROs) in Vietnam?2023-11-10T20:18:38+08:00

Financial audits and annual compliance are crucial for regulatory adherence, optimizing financial health, enhancing tax efficiency, and establishing robust internal control systems to safeguard against fraudulent activities.

How can professional service providers like Paul Hype Page assist businesses in Vietnam?2023-11-10T20:00:26+08:00

Professional service providers offer comprehensive support for FOEs and ROs, ensuring compliance with regulations, maximizing financial efficiency, and providing tailored services for success in the Vietnamese market.

Ready to Apply for an Employment Pass in Vietnam?

In conclusion, financial audits and annual compliance in Vietnam are critical for FOEs and ROs to ensure adherence to regulatory requirements and optimise their financial health. These processes involve a series of steps, including preparing statutory annual audit reports, finalising corporate and personal income taxation, and complying with social insurance and profit remittance requirements. Staying abreast of evolving regulations and working closely with professional service providers can help businesses navigate the complexities of annual compliance in Vietnam and achieve their financial goals.

Our services at Paul Hype Page encompass comprehensive support for FOEs and ROs in Vietnam, ensuring that they meet all compliance requirements and maximise their financial efficiency. Whether you are a FOE looking to streamline your annual compliance processes or a representative office aiming to meet your reporting obligations, we are your trusted partner in navigating the intricate landscape of financial audits and annual compliance in Vietnam. Contact us today to learn how we can tailor our services to meet your specific needs and pave the way for your business’s success in the Vietnamese market.

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