What are regulations on classification of domestic tax accounting in Vietnam?

What are regulations on classification of domestic tax accounting in Vietnam?

Pursuant to Clauses 2 and 3 of Article 24 Circular 111/2021/TT-BTC, the domestic tax accounting are classified into the following types:

- Type 1 Accounts - Receivables: These accounts reflect the taxes that need to be collected, have been collected, still need to be collected, or debts that are marked for the tax authorities at all levels towards taxpayers or organizations authorized by the tax authorities to collect taxes.

- Type 3 Accounts - Payables and Settlements: These accounts reflect the taxes that the tax authorities must refund, have refunded, or still need to refund to taxpayers or organizations authorized by the tax authorities to collect taxes; the settlement status with the state budget regarding the tax authorities' revenue and refunds.

- Type 7 Accounts - Receipts: These accounts reflect the tax revenue of tax authorities at all levels.

- Type 8 Accounts - Refunds, Exemptions, Reductions, Debt Write-offs: These accounts reflect the value-added tax and special consumption tax refunds according to tax law; tax exemptions, reductions, and write-offs for taxpayers as decided by the tax authorities or a competent state authority.

Detailed itemization of the tax accounting account system is as follows:

What are regulations on classification of domestic tax accounting in Vietnam? (Image from the Internet)

Which authority is responsible for specifying the accounting method for each type of tax management transaction in Vietnam?

Pursuant to Clause 7, Article 24 Circular 111/2021/TT-BTC as follows:

Tax accounting account code

...

4. During the implementation of tax accounting, the General Director of the Vietnam General Department of Taxation is authorized to supplement detailed accounting accounts from Level 2 onwards for the accounts stipulated in Clause 3 of this Article to meet tax management requirements. The new, modification, or addition of Level 1 accounts is decided by the Minister of Finance based on proposals from the General Director of the Vietnam General Department of Taxation.

5. In the Tax Accounting Subsystem, it is allowed to establish intermediary accounts for accounting purposes but this must not alter the nature of the tax management transaction being accounted for and must comply with the general principles of the account system stipulated in this Circular. Intermediary accounts must be cleared of balances immediately after the relevant tax management transactions are completed and must not be carried over to the next financial year.

6. The content and structure of bookkeeping accounts are specified in Appendix III issued together with this Circular.

7. The General Director of the Vietnam General Department of Taxation specifies the accounting method for each type of tax management transaction in conformity with tax management requirements, tax management processes, information technology application systems in tax accounting, and in accordance with this Circular.

Thus, according to the regulations, the General Director of the Vietnam General Department of Taxation is responsible for specifying the accounting method for each type of tax management transaction in conformity with tax management requirements, tax management processes, information technology application systems in tax accounting, and in accordance with this Circular.

What are requirements for domestic tax accounting in Vietnam?

Pursuant to Article 18 Circular 111/2021/TT-BTC, domestic tax accounting must meet the following requirements:

- The account content must be designed in accordance with the State Budget Law 2015, Accounting Law 2015, Tax Administration Law 2019, organization of tax accounting apparatus, and information organization of tax authorities at all levels.

- Fully reflect all economic and financial activities related to tax management and settlement with the state budget of tax authorities at all levels.

- Facilitate the collection, processing, exploitation, and provision of information through information technology applications, ensuring the capability to automatically exchange and transmit data on state budget revenue management within the Finance sector between the Tax Accounting Subsystem and the state budget revenue management systems of the Ministry of Finance and State Treasury.