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.
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:
- General Statistics Office
- Municipal Department of Finance
- Ministry of Planning and Investment
- 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: