Guidance on the accounting policies applying to foreign contractors in Vietnam

Guidance on the accounting policies applying to foreign contractors in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Guidance on the accounting policies applying to foreign contractors in Vietnam

Guidance on the accounting policies applying to foreign contractors in Vietnam according to Article 10 of Circular 200/2014/TT-BTC is as follows:

- Foreign contractors having permanent resident facilities in Vietnam which are not an independent unit having legal status shall carry out accounting policies in Vietnam as follows:

= There are particular contractors eligible for particular accounting policy issued by the Ministry of Finance;

= Contractors not eligible for particular accounting policy issued by the Ministry of Finance may whether fully and partly apply Accounting policies for Vietnamese enterprises in conformity with their operation and management.

= If the contractor applies Accounting policies for Vietnamese companies fully, it is required to apply during the fiscal year.

= The contractor must notify the tax authority of the accounting policy applied within 90 days from the date on which it runs business in Vietnam.

If there is any change in applying of accounting policy, the contractor must notify the tax authority within 15 working days from the date on which the change occurs.

- Foreign contractor must keep records of every contract license, every transaction in details to settle contract and make tax declaration.

- If a foreign contractor who applies fully Accounting policies for Vietnamese companies wishes to supplement or modify the policies, it is required to comply with Article 9 of Circular 200/2014/TT-BTC and obtain approval issued by the Ministry of Finance.

Within 15 working days from the date on which the sufficient documents are received, the Ministry of Finance must send response on registration of amendments of accounting policies to the foreign contractor.

2. Regulations on registration for amendments to Accounting policies in Vietnam

Regulations on registration for amendments to Accounting policies according to Article 9 of Circular 200/2014/TT-BTC are as follows:

- Chart of accounts

= According to chart of accounts of accounting policies for enterprises issued together with Circular 200/2014/TT-BTC, the enterprise shall apply and detail chart of accounts in conformity with requirements pertaining business and management of every business line and unit, provided that it conforms to content, structure and method of accounting of equivalent ledger accounts.

= If the enterprise need to add accounts or sub-accounts or modify accounts or sub-accounts about names, signs, content and accounting methods, the approval issued by the Ministry of Finance before the supplement or modification is required.

= The enterprise may open sub-accounts or sub-sub accounts if the Chart of accounts prescribed in Appendix 1 of Circular 200/2014/TT-BTC does not regulate such accounts without the approval of the Ministry of Finance.

- Financial statements

= According to forms and contents of items of the financial statement prescribed in Appendix 2 of Circular 200/2014/TT-BTC, the enterprise shall detail the items (available) of the financial statement system in conformity with operation and management of every business line and unit.

= If the enterprise need to add or modify names, signs, content of items of the financial statement, the approval issued by the Ministry of Finance before the supplement or modification is required.

- Accounting documents and accounting records

= All accounting documents are optional, enterprise may use forms issued together with Appendix No. 3 of Circular 200/2014/TT-BTC or design their forms in conformity with their operation and management provided that their forms satisfy all requirements as prescribed in the Law on Accounting and their amended documents.

= All forms of accounting records (including Ledgers or Journals) are optional. The enterprise may apply the forms as prescribed in Appendix No. 4 of Circular 200/2014/TT-BTC or amendments to forms or accounting cards in conformity with their operation and management provided that they are sufficient, clear and easy to control.

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