Business Tax Advisory in Vietnam: Penalty Avoidance and Solutions for International Tax Compliance Issues

As businesses expand and adapt to modern work environments, tax regulations have become increasingly complex. Companies must navigate evolving tax policies while managing various financial aspects, from employee benefits to cross-border transactions. This complexity highlights the growing need for business tax advisory services to ensure compliance and optimize tax strategies.

Today, businesses require comprehensive business tax advisory, covering everything from tax compliance issues to international tax advisory services. With ever-changing regulations, expert guidance is essential to avoid Vietnam penalties and maintain compliance. In this blog, you’ll learn everything about business tax advisory in Vietnam and how to tackle international tax compliance challenges effectively.

Need help with taxation in Vietnam? Explore InCorp Vietnam’s Tax Advisory Services today!

Vietnam Penalties and Fines For Invoice-related Violations

You have to incur penalties and fines for invoice-related violations. These violations include:

• Not making invoices for promotional items or gifts given to employees. The fine can range from US$22 to US$65.
• Not giving invoices to customers when selling goods or services. The fine can range from US$431 to US$862.
• Using fake invoices or using them for illegal purposes. The fine can range from US$862 to US$2,155.

Late submissions for invoicing reports. The fines are as follows:

• Late lodgment within 1-10 days: US$39.39 to US$118.18
• Late lodgment within 11-20 days: US$78.79 to US$157.57
• Late lodgment within 21-90 days: US$157.57 to US$315.15
• Late lodgment over 91 days or failing to submit invoice: US$196.97 to US$590.90

Important Note: Starting from July 1, 2022, business organizations, households, and individuals need not submit reports of invoices. According to the new regulations, all of them have to switch to electronic invoices. Also, if you have already applied for e-invoices then you need not submit the reports.

Vietnam Penalties and Fines for Tax-relates Violation

Schedule for Lodgment of Tax Returns

There is a schedule under which a taxpayer must lodge their tax returns. The schedule is as follows:

– Ad-hoc case: You must pay the tax within 10 days after transactions. You have 45 days to make your final tax declaration if your contract ends.

– Monthly tax returns: Monthly tax returns are due by the 20th of the following month. –

– Quarterly tax returns: It is due by the end of the first month after the quarter ends.

– Annual tax returns:

• Business license fee: It is due within the first 30 days of the following year.
• PIT finalization: It is due by the last day of the first quarter of the following year.
• CIT finalization: It is due by the last day of the first quarter of the following financial year.

Read More: An Essential Guide of Taxation & Compliance Deadlines in Vietnam

Penalty for Late Lodgment

• Late lodgment within 1-30 days: US$78.79 to US$196.97
• Late lodgment within 31-60 days: US$196.97 to US$315.15
• Late lodgment within 61-90 days: US$315.15 to US$590.90
• Late lodgment over 90 days: US$590.90 to US$984.83

For late payments, you will be charged 0.03% per day on the overdue amount but if there is some glitch from the government office then you will not be penalized. 

According to Article 18, Decree 125/2020/ND-CP, commercial banks will be fined for their obligation to deduct tax which is payable from the taxpayer’s account, and have to pay to the state budget account upon the tax authority’s request. If the commercial banks are in default then they will be fined equal to the amount of the tax they failed to pay to the state budget’s account.

Some Solutions for International Tax Compliance Issues

Workplace ethics have changed completely over a period of time because of remote settings. This shift demands a new approach to tax management. Here’s how organizations can maintain compliance:

Use Automated Solutions

The modern tax management system requires the latest technology to handle the issues of compliance. Here are some things that organizations can consider:

• Tracking expenses in real-time is the best way to eliminate the risk of non-compliance. This can be done with the help of an automated expense management system that has built-in audit rules that provide full transparency in transactions. This helps in mitigating the risks before they become a problem.

• Using tools that interpret receipts and calculate the tax implications will help in processing various transactions quickly and accurately. This can be done with the help of advanced tax management platforms which are powered by AI and ML. This will reduce the need for manual reviews.

• Using smart compliance systems that are updated with the latest tax regulations. This will help the organizations in being compliant with the latest tax rules without any manual updates to the internal systems.

Collaborative Tax Management Framework

A collaborative tax management system is important for effective tax compliance. Here are some ways organizations can create a more collaborative approach:

• Conducting regular meetings with tax and benefits teams to review new proposals.
• Creating regular review cycles to ensure compliance.
• Creating local-specific benefits guidelines and maintaining local tax laws.
• Creating guidelines for managing company property in remote work situations.
• Conducting training programs for managers about tax benefits.

Strategy for Technology Implementation

Implementing a successful tax management system requires a structured approach. This can be done by:

• Analyzing current tax management practices and identifying the pain points. 
• Selecting the right automated tools that go well with the existing system.
• Implementing a strong data protection manual for sensitive information.
• Establishing backup and recovery processes for tax-related data.

Monitoring and Optimization

After following all the tips, organizations need to monitor their success and that can be done by:

• Regularly reviewing the performance of the system and compliance metrics.
• Analyzing the error rates and processing time.
• Monitoring the cost savings and improvements in efficiency.

Services Provided as a Part of Business Tax Advisory in Vietnam

Unlike traditional tax preparation, tax advisory services go beyond filing tax returns. The tax advisors analyze financial information and help clients understand the impacts of financial decisions while keeping in mind their personal financial goals. The tax advisory services include:

• Personal financial planning
• Insights into College Saving Programs
• Advice on state and federal tax returns
• Succession planning
• Investment planning
• Retirement planning programs
• Tax credit reviews
• Custom tax services
• Estate planning
• Property tax assessment
• Client representation in tax negotiations

Need help with taxation in Vietnam? Explore InCorp Vietnam’s Tax Advisory Services here!

What Are the Different Kinds of Business Tax Advisory Areas?

There are different types of business tax advisory areas in which the advisors help in managing the tax better to reduce the tax liabilities. Here are some of the areas:

– Property tax: Property tax advisors help clients manage their finances and pay taxes on real estate. They keep an eye on the valuation of the property and help their clients by saving them from paying extra.

– Sales tax: The advisors help their clients pay the right amount of sales tax and ensure that they are not paying more than prescribed. Moreover, they also help in sales tax audits. –

– Audit: Audit advisors play an important role in keeping the business running on the right track. They maintain financial records to make sure everything is correct.

– Charted tax: These professionals work more closely with the income tax framework. They help businesses understand the tax situation and file their tax returns correctly. 

– Transaction tax: Transaction tax professionals help in managing crucial business deals. They help the companies in understanding the impact of tax on major business decisions especially while dealing with international business.

– Merger and Acquisitions: These professionals help businesses with mergers and acquisitions. They look after all the tax implications and help in making the deal successful from a tax perspective.

What Advantages Can You Gain from Using Business Tax Advisory Services in Vietnam?

Managing taxes can be challenging for businesses, especially with tax compliance issues and evolving regulations. A professional business tax advisory service helps companies navigate complex tax laws while focusing on growth, customer acquisition, and profitability.

Vietnam’s tax system is strict, and failing to comply can lead to severe Vietnam penalties. A tax advisor ensures businesses stay updated with the latest regulations, avoid costly fines, and maintain accurate financial records. Additionally, handling international tax advisory services is crucial for companies operating across borders, ensuring compliance with both local and global tax laws.

Filing taxes can be overwhelming, but business tax advisory services simplify the process. Expert advisors help businesses minimize liabilities, maximize deductions, and create a long-term financial strategy. With professional guidance, companies can stay ahead of tax compliance issues, avoid penalties, and ensure smooth operations in Vietnam’s dynamic business environment.

Read Related: Vietnam Business Accounting & Taxation: Principles of Taxation, Problems & Solutions, and Accounting Department Setup

How InCorp Vietnam can Assist?

Vietnam’s tax laws can be complex and time-consuming for businesses to navigate. At InCorp Vietnam, our business tax advisory services help companies stay compliant and avoid costly Vietnam penalties. With years of experience, we assist businesses in managing their taxes efficiently and in full compliance with local regulations.

Our team evaluates your current tax situation, identifying any tax compliance issues or risks. We then implement effective tax management systems to ensure alignment with Vietnam’s tax laws. Additionally, for companies operating across borders, we provide international tax advisory services, ensuring compliance with both local and global tax regulations. With our expertise, your business stays up to date and free from tax-related complications.