Foreign enterprises in Ho Chi Minh City must comply with the current regulations and standards set by the Vietnamese government. They are required to record both their business and personal income taxes, and yearly tax finalizations as well as submit an annual audit report. Furthermore, balance sheets, income statements, profit, and loss statements, and equity statement revisions are all documents that require auditing.
As a result, accounting & bookkeeping compliance in Ho Chi Minh City becomes an entire process within itself pushing businesses to set up a separate departments and a series of investments to get it right. In such a scenario, outsourcing accounting becomes a saving grace for many businesses that let them cut overhead costs and provide assurance of timely updates and compliance.
Outcomes of Non-compliance
Companies that are unable to comply with the country’s tax and accounting laws are subject to the following outcomes:
- A penalty of 20% of the under-declared tax amount will be imposed if financial records are not precise and consistent.
- From the last day of the Tax report filing deadline, the interest rate on late tax payments is 0.03 % per day of the unpaid tax amount.
- Fines of up to VND 15,000,000 will be enforced if tax returns are not filed within 91 days of the deadline.
- Failure to submit a financial statement to the relevant authorities, failing to disclose financial statements, and failure to conduct a mandatory audit of financial accounts for a business that is obliged to audit financial statements will result in a fine of up to VND 50,000,000.
- Fines for not having a chief accountant assigned to your financials 10,000,000 – 20,000,000VND
Why Outsource your Accounting activities in Ho Chi Minh City?
Save time and concentrate on your business
Accounting, bookkeeping, and tax preparation might take a long time. Managers will free up critical time to focus on daily operations and bring in new clients by outsourcing their accounting and tax preparation work, including onerous chores linked to bills, payroll, obligatory disclosures, and other ancillary concerns.
Cut overhead costs
Companies save money on expenses such as recruiting, employee benefits, training, accounting software, hardware, and office supplies by outsourcing, allowing managers to focus on day-to-day operations, team management, and client acquisition, which are all critical for corporate success.
Improved Expertise and Skill Sets
One gets to have access to professional accountants who are up to speed on tax and regulatory developments and have knowledge in the sector (one of whom needs to have a Vietnam Chief Accountant Certificate). For the same price as various workers, businesses get access to a full team of skilled specialists by outsourcing.
Although an in-house accounting team is handy, scalability may be a problem in some cases. It will take a long time to locate and acquire skilled new personnel if your company unexpectedly expands and requires a larger crew. External service providers have a team on hand that may raise or decrease the number of resources assigned to a customer.
When it comes to accounting and tax declaration, avoiding mistakes is critical, and an external team of accountants is less likely to make mistakes. Outsourcing accounting is the ideal choice since enforcing robust internal checks and balances becomes unnecessary, with the bulk of those responsibilities placed under the accounting outsourcing team which is already very experienced and constantly in tune with government updates.
InCorp Vietnam (formerly Cekindo) is a leading provider of global market entry services. We are part of InCorp group, a regional leader in corporate solutions, that encompasses 8 countries in Asia-Pacific, headquartered in Singapore. With over 1,100 legal experts serving over 15,000 Corporate Clients across the region, our expertise speaks for itself. We provide transparent legal consulting, setup, and advice based on local requirements to make your business perfectly fit into the market with healthy growth.
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