For foreign-invested enterprises (FDI) operating in Vietnam, annual financial statement preparation and statutory audit compliance are not optional — they are legal obligations with fixed deadlines and real penalties. Yet every year, multinational companies face the same challenges: reconciling Vietnamese Accounting Standards (VAS) with group reporting under IFRS, meeting the March 31 deadline, and navigating audit findings that could trigger tax authority scrutiny.
The Law on Accounting No. 88/2015/QH13 and Decree 174/2016/ND-CP establish the legal framework for financial reporting in Vietnam, while the new Law on Corporate Income Tax (CIT) — effective from 1 October 2025 for the tax year 2025 onward — introduced significant changes to tax incentive schemes, SME rates, and the interaction between accounting profit and taxable income. For FDI companies, getting this right means more than just ticking boxes — it directly affects tax liabilities, repatriation of profits, and group consolidation.
This guide provides the comprehensive accounting and assurance services framework every FDI company in Vietnam needs for the 2026 reporting cycle: regulatory requirements, deadlines, audit triggers, common pitfalls, and a step-by-step readiness checklist.
For a broader overview of accounting services for foreign companies in Vietnam, consult our complete service guide or speak directly with our financial advisory team for corporate structuring advice.
1. VAS Financial Reporting: What FDI Companies Must Know
All enterprises established under Vietnamese law — including 100% foreign-owned companies, joint ventures, and representative offices that generate revenue — must prepare annual financial statements in accordance with Vietnamese Accounting Standards (VAS). The key reporting documents include:
- Balance Sheet (Form B01-DN): Assets, liabilities, and owner’s equity as at December 31
- Income Statement (Form B02-DN): Revenue, expenses, and profit/loss for the fiscal year
- Cash Flow Statement (Form B03-DN): Operating, investing, and financing cash flows
- Notes to Financial Statements (Form B09-DN): Accounting policies, contingent liabilities, related-party transactions
The financial year in Vietnam defaults to the calendar year (January 1 – December 31). While companies may apply to the Ministry of Finance for an alternative fiscal year, approval is rarely granted for standard commercial operations. Most FDI companies therefore operate on a calendar-year basis. Financial planning and tax advisory should account for this fixed timeline from the outset.
Key VAS principles that differ from IFRS:
- Fixed asset revaluation: VAS does not permit upward revaluation of fixed assets to fair value — assets are carried at historical cost less depreciation, unlike IAS 16 which permits the revaluation model.
- Provisioning rules: VAS requires specific provisioning rates for trade receivables (30% for 1–3 years overdue; 100% for >3 years) and inventory, which may differ from IFRS 9 expected credit loss models.
- Foreign exchange: VAS mandates use of the Vietcombank exchange rate at the transaction date, with specific rules for monetary vs. non-monetary items that differ from IAS 21.
- Revenue recognition: While Circular 200/2014/TT-BTC modernized VAS revenue recognition closer to IFRS 15, differences remain in contract cost capitalization and variable consideration treatment.
For practical guidance on navigating VAS financial reporting requirements, our accounting team helps FDI companies ensure full compliance while streamlining the month-end and year-end closing process. Many companies also benefit from business advisory support to align their financial reporting with broader corporate strategy.
2. Key Financial Statement Deadlines for the 2026 Reporting Cycle
Timeline discipline is critical. Missing statutory deadlines triggers automatic penalties under Decree 125/2020/ND-CP (amended by Decree 102/2021/ND-CP), and can delay tax finalization, profit repatriation, and group audit sign-off.
| Obligation | Deadline | Governing Law |
|---|---|---|
| Annual financial statements (calendar year) | March 31, 2026 (90 days after year-end) | Law on Accounting 88/2015/QH13, Art. 30 |
| Annual CIT finalization return | March 31, 2026 (90 days after year-end) | Law on CIT Administration, Art. 44 |
| Audited financial statements submission | March 31, 2026 (to tax authority + DPI) | Decree 174/2016/ND-CP, Art. 15 |
| QDMTT return (Pillar Two) | 12 months after fiscal year-end | Resolution 107/2023/QH15 |
| CIT provisional quarterly payments | 30th day of the following quarter (Q1–Q4) | Law on CIT Administration |
| Annual audit report issuance | Before financial statement submission | Law on Independent Audit 67/2011/QH12 |
Practical tip: Begin audit preparation by January 15 to give auditors sufficient time. Most Big 4 and mid-tier audit firms in Vietnam are fully booked by February, and late engagement can delay the entire reporting cycle. For companies that need pre-audit accounting and bookkeeping review services, starting even earlier — in November or December — allows time to correct errors before the auditors arrive. Consulting a tax advisor early also ensures that tax provisions and deferred tax calculations align with the latest regulatory changes.
3. Statutory Audit Requirements for FDI Companies
Under the Law on Independent Audit No. 67/2011/QH12, all foreign-invested enterprises in Vietnam must have their annual financial statements audited by an independent auditing firm licensed by the Ministry of Finance. This applies regardless of company size, revenue, or profitability.
| Criteria | Details |
|---|---|
| Who must be audited? | All FDI enterprises (100% foreign-owned, joint ventures), public companies, financial institutions, state-owned enterprises |
| Who can audit? | Auditing firms licensed by the Ministry of Finance of Vietnam; must hold a valid Certificate of Eligibility for Auditing Services |
| Auditing standards | Vietnamese Standards on Auditing (VSA), which are largely aligned with International Standards on Auditing (ISA) |
| Auditor rotation | Engagement partner must rotate every 3 consecutive years for public interest entities |
| Language of audit | Vietnamese (audited FS must be in Vietnamese); English translation is supplementary |
The statutory audit serves dual purposes: (1) regulatory compliance with Vietnamese authorities, and (2) group reporting for parent companies abroad. The audited financial statements must be submitted to the tax authority, the Department of Planning and Investment (DPI), and the Statistics Office within 90 days of fiscal year-end.
Many FDI companies choose to have their accounting operations reviewed by a local accounting services provider before the external audit begins — this pre-audit review catches errors early, reduces audit adjustments, and keeps the audit timeline on track. For companies considering restructuring or M&A activity, BIZCA’s business networking platform connects you with corporate finance experts who can provide deal-ready financials and valuation support.
4. Common Audit Findings for FDI Companies — and How to Avoid Them
Based on recurring patterns in Vietnamese statutory audits, here are the most frequent audit findings for FDI companies and practical steps to address them before year-end:
- Revenue cut-off errors: Revenue recognized in the wrong period due to delayed invoice issuance. Under e-invoice regulations (Decree 123/2020/ND-CP), invoices must be issued at the time of service completion or goods delivery. Fix: Implement a month-end cut-off procedure that reconciles all service completion reports with issued e-invoices.
- Inadequate related-party transaction documentation: Transactions with parent companies, subsidiaries, or key management personnel require disclosure in the Notes to Financial Statements and — for transfer pricing purposes — documentation under Decree 132/2020/ND-CP. Fix: Maintain a related-party transaction register throughout the year; prepare transfer pricing documentation before the CIT finalization deadline.
- Foreign currency translation errors: Monetary items denominated in foreign currencies must be revalued at the Vietcombank rate on the balance sheet date. Non-monetary items carried at historical cost use the historical rate. Fix: Segregate monetary vs. non-monetary foreign currency balances and apply the correct exchange rate at each reporting date.
- Incomplete provision for doubtful debts: Trade receivables overdue beyond 3 years require 100% provisioning under VAS; 1–3 years overdue requires 30%. FDI companies using IFRS expected credit loss models at group level often under-provide at the local VAS level. Fix: Maintain an aging schedule and apply VAS-specific provisioning rates at each quarter-end.
- Unreconciled intercompany balances: Mismatches between intercompany receivables and payables with group entities. Fix: Perform monthly intercompany reconciliations with confirmation from counterparties before year-end.
- Missing board resolutions for significant transactions: Capital injections, dividend declarations, and material asset acquisitions require formal board resolutions documented in the company’s legal file. Fix: Ensure all significant transactions during the year have corresponding board minutes and resolutions on file.
Proactive bookkeeping review services — conducted on a quarterly or semi-annual basis — can identify and correct these issues well before the external auditors arrive, dramatically reducing both audit adjustments and management letter points. Companies that combine regular bookkeeping reviews with corporate advisory support are better positioned to maintain audit-ready records year-round.
5. Audit Readiness Checklist: Month-by-Month Timeline
Use this practical timeline to stay ahead of the 2026 audit cycle:
Q4 2025 (October – December): Pre-Audit Preparation
- Engage your audit firm and agree on the audit timetable
- Reconcile all bank accounts, intercompany balances, and tax ledger vs. accounting ledger
- Perform a physical inventory count (if applicable) with auditor observation
- Review fixed asset register — identify disposals, fully depreciated assets, and assets no longer in use
- Send year-end balance confirmation requests to banks, customers, and suppliers
January 2026: Year-End Close
- Finalize all 2025 transactions in the accounting system
- Prepare the trial balance and reconcile all general ledger accounts
- Calculate year-end adjusting entries: depreciation, provisions, accruals, foreign exchange revaluation
- Prepare the draft financial statements (B01, B02, B03, B09)
February 2026: Audit Fieldwork
- Provide auditors with the audit information package (trial balance, GL detail, contracts, board minutes)
- Respond to auditor queries and provide supporting documentation within agreed timelines
- Review and discuss audit adjustments with management before sign-off
March 2026: Filing & Submission
- Finalize audited financial statements with auditor’s opinion
- Submit audited FS to tax authority, DPI, and Statistics Office by March 31
- Complete CIT finalization return and submit by March 31
- Upload financial statements to the National Business Registration Portal
Working with experienced accounting professionals in Vietnam ensures this timeline stays on track. From trial balance preparation to auditor liaison, our team handles the day-to-day so your finance team can focus on strategic priorities. For companies evaluating expansion or restructuring, BIZCA’s M&A matching platform and corporate finance advisory services provide the strategic support needed alongside compliance work.
6. VAS vs. IFRS: Bridging the Gap for Group Reporting
For FDI companies that are subsidiaries of multinational groups reporting under IFRS, the gap between VAS financial statements and IFRS consolidated reporting is a persistent challenge. The most common reconciliation items include:
| Area | VAS Treatment | IFRS Treatment | Reconciliation Required? |
|---|---|---|---|
| Fixed assets | Historical cost only | Cost or revaluation model (IAS 16) | Yes — if group uses revaluation |
| Impairment | Specific provisioning rates | Expected credit loss model (IFRS 9) | Yes — for receivables and financial assets |
| Leases | Operating lease: straight-line expense; Finance lease: capitalized | Single lessee model — all leases on balance sheet (IFRS 16) | Yes — significant for companies with large lease portfolios |
| Revenue | Circular 200 — close to IFRS 15 but not identical | IFRS 15: 5-step model | Yes — for contracts with multiple performance obligations |
| Deferred tax | Recognized on temporary differences | Recognized on temporary differences (IAS 12) | Minor — methodology similar, timing differences may vary |
Most FDI companies maintain a dual-book or reconciliation spreadsheet that tracks VAS-to-IFRS adjustments throughout the year. This approach is more efficient than attempting a full IFRS conversion at year-end and ensures that group reporting timelines are met. The accounting services team at Á Châu can assist with maintaining this VAS-IFRS bridge throughout the year, complementing the work of your external auditors.
7. Penalties for Non-Compliance
The consequences of late or incorrect financial reporting are governed by Decree 125/2020/ND-CP (amended by Decree 102/2021/ND-CP), which establishes the following administrative penalty framework:
| Violation | Penalty Range (VND) | Additional Consequences |
|---|---|---|
| Late submission of financial statements (<3 months) | 5,000,000 – 10,000,000 | — |
| Late submission of financial statements (>3 months) | 10,000,000 – 20,000,000 | — |
| Material misstatement in FS | 10,000,000 – 30,000,000 | Corrective filing required |
| Failure to submit audited FS | 30,000,000 – 50,000,000 | May trigger tax audit |
| Fraudulent financial reporting | 40,000,000 – 50,000,000 | Criminal liability possible |
| Non-compliance with accounting standards | 10,000,000 – 30,000,000 | May impact tax incentives |
Beyond monetary penalties, non-compliance with financial reporting obligations can trigger a tax audit by the General Department of Taxation (GDT). Tax audits in Vietnam are comprehensive — they typically cover the previous 3–5 fiscal years and can result in substantial back-tax assessments, late payment interest (0.03% per day), and penalties of up to 20% of underpaid tax. Proactive compliance management through professional accounting services is the most cost-effective way to avoid these risks.
Need Accounting & Assurance Services for Your Vietnam Entity?
Á Châu provides VAS-compliant financial statement preparation, audit support, bookkeeping review, and IFRS reconciliation — all in English. Our team works alongside your external auditors to ensure a smooth, on-time audit cycle with minimal adjustments.
📞 +84 932 154 266 | ✉️ info@dichvuketoanachau.com
🔗 Explore the Á Châu Ecosystem:
- Tài Chính Á Châu — Financial Advisory, Corporate Finance & Loan Consulting for FDI
- BIZCA — Business Networking Hub: Capital, M&A, Service & Sales Matching
- Dịch Vụ Kế Toán Á Châu — Accounting & Assurance Services for FDI Enterprises
Official sources: Vietnam Laws (VBPL) · Thu Vien Phap Luat · Ministry of Finance Portal · Government Portal
Frequently Asked Questions
Do all FDI companies in Vietnam need an annual audit?
Yes. Under the Law on Independent Audit No. 67/2011/QH12, all foreign-invested enterprises — regardless of size, revenue, or industry — must have their annual financial statements audited by a licensed independent auditing firm. This applies to 100% foreign-owned companies, joint ventures, and branch offices.
What happens if we miss the March 31 financial statement deadline?
Late submission incurs administrative penalties of VND 5–20 million depending on the delay duration. More importantly, it may trigger a tax audit by the General Department of Taxation, delay the CIT finalization process, and raise red flags with the Department of Planning and Investment during the annual investment report review. Repeated late filing can also impact work permit renewals for expatriate staff.
Can we prepare financial statements under IFRS instead of VAS?
No. Vietnamese law requires financial statements to be prepared under Vietnamese Accounting Standards (VAS). IFRS financial statements may be prepared as supplementary reports for group consolidation purposes, but the statutory filing to Vietnamese authorities must be VAS-compliant. Most FDI companies maintain a VAS-IFRS reconciliation bridge to satisfy both requirements.
What is the cost of an audit for an FDI company in Vietnam?
Audit fees vary based on company size, complexity, industry, and the auditing firm. For a typical trading or service FDI company with VND 20–50 billion in annual revenue, expect VND 40–80 million for a Big 4 audit and VND 25–50 million for a mid-tier firm. Manufacturing companies with inventory and fixed assets typically pay 30–50% more. Engaging pre-audit accounting services can reduce audit time and fees by 20–30% by ensuring records are audit-ready before fieldwork begins.
How does the new CIT Law (2025) affect financial statement preparation?
The new Law on CIT — effective from October 1, 2025 for the 2025 tax year onward — introduced tiered rates for SMEs (15–17%), revised tax incentive schemes, and narrowed the scope of incentives for companies in industrial zones. For financial reporting, the key impact is in the tax expense calculation and deferred tax recognition: companies must apply the new CIT rates, reassess the realizability of deferred tax assets linked to incentive periods, and update their effective tax rate reconciliation in the Notes to Financial Statements. The tax calculation section of the annual CIT return now also requires explicit tie-out to accounting profit.
