Press release

9 Dec 2019 Hanoi, VN

Vietnamese enterprises need well prepared for changes in tax policy

Hanoi, 9 december 2019 To ensure the position as one of the fastest growing economies in the Asia Pacific region, Vietnam has introduced various regulatory and tax reforms to maintain its attractive business environment, to attract foreign investment and to support local private enterprises.

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Nguyet Thu Vu

EY Vietnam Brand, Marketing and Communications Director

Passionate about connecting people with trusted sources of knowledge that contributes to and enables their business a sustainable growth.

Related topics Tax Law

At the “Tax and Law Symposium 2019” workshop, experts from EY Consulting Vietnam Joint Stock Company (EY Consulting Vietnam) emphasized that apart from handling tax issues appropriately and reducing tax costs, enterprises also need to take care of potential risks of non-compliance, especially in a fast-growing digital business environment.

New Law of Tax Administration in 2019, recent proposals on the application of International Financial Reporting Standards (IFRS) in Vietnam, as well as previous decrees on e-invoices and transfer pricing, all share the same goal of raising Vietnam tax regulations to international standards in order to have a more effective system for both government authorities and tax payers in tax administration, collection and tax dispute resolution. 

These policies not only introduce new tax treatments such as e-commerce transactions, re-auditing or the application of penalties, but also propose new regulations of tax compliance and audit management. 

Apart from handling tax issue properly, enterprises also need to focus on managing supporting documents appropriately, especially proofs of digital transactions which are increasing nowadays. It is not only about the collaboration among an enterprise’s internal functions, but also among subsidiaries and parent companies or headquarters abroad.

Continuous changes in technology under Industry 4.0 wave not only have a strong impact on the business performance of enterprises, but also put a pressure on the need to digitalize their tax reporting activities in the context of government agencies are also applying more and more information technology achievements in tax management and tax inspection activities. Enterprises, therefore, need to review and restructure their internal process in data management and exchange, to be able to “communicate” with digitalized tax management systems.

To help enterprises comply with tax regulations and ready for changes in tax policy, as well as avoid potential non-compliance risks, four important notes were recommended by EY Consulting Vietnam’s professionals at the workshop. Accordingly, enterprises need to understand all types and processes of tax inspection, timeline and specific requirements of each type of tax inspection. Secondly, they need a complete and strict data management method, avoid losing data when changing manpower, changing offices or cyberattacks, etc. and be ready to extract data when there are tax inspections.

In addition, an enterprise needs a methodical plan to manage tax risks and implement the best risk management practices recommended by experts such as investing on the improvement of employee performance, internal review regularly, fixing mistakes available, being well-prepared before inspections. Finally, they should make appropriate choices when tackling tax disputes to ensure the compliance whilst reduce the damages which are caused by disputes.

Tax and Law Symposium 2019 is the major annual event organized by EY Consulting Vietnam to help businesses update tax policy changes, related policies, global, regional and local tax trends. The workshop help answer enterprises’ questions in tax compliance and related regulations, as well as provide recommendations to build more effective tax and tax risks management plans.

 

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