Challenges in compliance with accounting and tax laws when doing business in Vietnam

In the current trend of integration and globalization, the business activities of multinational companies are also expanding. However, the constant changes in the law and the complexity of the tax system have led to certain difficulties and challenges in complying with accounting and tax laws when doing business in Vietnam. The following article will outline the major challenges of complying with accounting and tax laws when doing business in Vietnam and how to solve them.

1. The company's tax obligations are not clear

To ensure that the work is always clear, the transparent declaration of accounting work at each company requires monthly, quarterly, semi-annual and annual reports, resulting in requirements being constantly changed and updated in Japan. Therefore, tax compliance, accounting, and tax reporting procedures in Vietnam are always complicated and time-consuming. Therefore, many new businesses doing business in Vietnam will encounter a situation where they do not fully understand their tax obligations.

Moreover, for each different business, tax and accounting obligations will be different, making it difficult to draft corporate tax obligations. Therefore, many businesses do not really fully comply with the set procedures, leading to legal risks and penalties issued by the Vietnamese government.

2. Ineffective levels of communication

The office space in Vietnam is highly appreciated by many business owners. There are many individuals who are afraid to express their opinions because they are afraid of being judged. This inadvertently minimizes communication between employees and levels. As simple as when employees ignore compliance obligations and some errors when reporting, they will tend to not want to talk to management because they are afraid of being reprimanded, want to save face for themselves. Therefore, transparency is a factor that many business owners today appreciate.

3. Mistakes in subjective job evaluation

In Vietnam, companies often self-review all accounting and tax work. This model is common in many small businesses. That is, after the accountant has done all the accounting work, there will be an additional evaluation and validation process from a more qualified person. However, this will pose a big challenge regarding compliance, especially for large companies. It is very easy to pass the responsibility on to a single person. Therefore, the work review should be done at many levels, many individuals to identify errors and correct them in time.

4. High cost of tax compliance and accounting

Compared to many countries in the world, when doing business in Vietnam, compliance with taxes, accounting and reporting procedures are quite numerous and complicated. Therefore, the tips and expenses for tax compliance and accounting are not cheap. This is a big challenge for small businesses, especially foreign business owners. Moreover, this cost does not include the cost of hiring resources and troubleshooting costs.

5. International report

VAS – is the Vietnamese accounting standard that is mandatory for businesses in Vietnam. However, this standard is not very flexible when it comes to documentation processes as well as accounting software used by businesses that must comply with VAS guidelines. As a result of not using international accounting software, most accountants will suffer from a lack of knowledge of international accounting.

Related: Advantages and disadvantages of outsourced accounting services

YNNGLOBAL – a reputable and professional corporate tax reporting service provider in Vietnam

YNN GLOBAL is currently a professional and reputable corporate tax reporting service provider in Vietnam. With many years of experience in the field of corporate services, YNNGLOBAL always ensures to support businesses with the most economical and quality corporate tax reporting services with professionalism and high responsibility at work. Here we will help all partners handle matters related to accounting and tax laws when doing business to ensure the best flow for your business. So if your business has needs or questions, please contact us via hotline 0909 594 196 for the earliest and most detailed advice.

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