Do enterprises that do not generate revenue have to make a year-end financial statement in Vietnam?

Do enterprises that do not generate revenue have to make a year-end financial statement in Vietnam?

According to Clause 1, Article 3 of the Accounting Law 2015, it is stipulated:

1. Financial statement means a system of financial information of an accounting unit demonstrated according to a form provided for by accounting standards and accounting regime.

In Clause 4, Article 6 of the Accounting Law 2015 on accounting principles, accordingly:

1. Values of assets and liabilities must be recorded according to their original prices. After being initially recorded, regarding certain types of assets and liabilities whose values fluctuate according to market prices and can be reliably re-determined according to reasonable values at the end of the financial statement period.

2. Chosen regulations and accounting method must be consistently applied throughout the fiscal year; where the chosen regulations and accounting method are changed, the accounting unit must provide explanation in its financial statement.

3. The accounting unit must collect, record economic/financial transactions that occur objectively, fully, truthfully, and in the correct accounting period.

4. Every financial statement must be completely, accurately, made and sent to competent authority in a timely manner. Information and data in financial statements of accounting units must be made publicly available in accordance with Article 31 and Article 32 of this Law.

5. Accounting units shall apply methods for evaluation of assets, distribute the revenues and expenditures carefully; do not falsify the results of their economic, financial activities.

6. Financial statements must be made and presented in a way that correctly reflects the nature of the transactions rather than their names.

7. Apart from Clause 1 through 6 of this Article, regulatory bodies, organizations, public service agencies using state budget shall do accounting according to state budget tables.

In addition, Clause 4, Article 32 of the Accounting Law 2015 on manners and deadline for publishing financial statements are as follows;

4. Accounting units doing business shall publish their annual financial statements within 120 days from the end of the annual accounting period. Where regulations of law on securities, credit, or insurance provide for different manners and deadlines for publishing financial statements; such regulations shall apply.

Thus, financial statements apply to all types of businesses established and operating under Vietnamese law. Enterprises are obliged to prepare and submit honest, accurate and timely financial statements according to the provisions of law on accounting and statistics, even if no revenue or expenses are incurred. Enterprises that do not generate revenue still have to make year-end financial statements according to regulations.

Do enterprises that do not generate revenue have to make a year-end financial statement in Vietnam? (Image from the Internet)

What is penalty for failure to submit year-end financial statements in Vietnam?

Pursuant to Clause 4, Article 12 of Decree 41/2018/ND-CP stipulating penalties for violations against regulations on submission and disclosure of financial statements:

4. A fine ranging from VND 40.000.000 to VND 50.000.000 shall be imposed for one of the following violations:

a) Failure to submit financial statement to the competent authorities;

b) Failure to disclose financial statements.

In addition, Clause 2, Article 6 of Decree 41/2018/ND-CP is amended by Clause 2, Article 5 of Decree 102/2021/ND-CP on fines in the field of accounting and independent auditing, as follows: after:

2. The fines specified in Chapter II and Chapter III of this Decree are imposed upon organizations except cases specified in Clause 1 Article 7; Article 8; Article 9; Article 10; Article 11; Article 13; Article 14; Article 15; Article 16; Article 17; Article 19; Clauses 1 and 3 of Articles 21; Article 22; Articles 23; Article 24; Article 26; Article 33; Article 34; Clauses 1 and 3 Article 36; Clauses 1 Article 38; Clauses 2 and 3 Article 39; Clauses 1 and 2 Article 48; Clause 1 Article 57; Clauses 1 and 2 Article 61; Article 67, which are fines that apply to individuals. For organizations with the same violations, the fines will double those of individuals.

According to this Article, when individuals fail to make year-end financial statements, they can be fined from 40,000,000 to 80,000,000 VND and for organizations, the fine is 2 times higher than the fine for organizations in Vietnam. 

Best regards!