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On 12 March 2018, the Vietnam Government issued Decree 41/2018/ND-CP concerning penalties for Accounting Administration Infringements. The new Decree is effective from 1 May 2018, and replaces Decree 105/2013/ND-CP.

This new Decree places further stringent requirements on companies with respect to basic accounting records and procedures, reflecting the Government’s emphasis on compliance in general, by adding additional infringements and increasing penalties when compared to the previous Decree that it replaces.

 

Client Alert, April 2018: Increased Penalties for Accounting Administration Infringements

 

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PENALTIES FOR SPECIFIC INFRINGEMENTS

 

The Decree clarifies penalties on the administration of the accounting function where specific requirements are not complied with. Selected penalties include:

 

Accounting Vouchers

 

Mistakes or carelessness in preparing or maintaining accounting vouchers will lead to the following penalties:

 

Issues / Errors Penalty (million VND)
Accounting vouchers with stamped signatures, lacking required information, erased content, or signing with red ink. 3-5
Accounting vouchers with inconsistent signatures, lacking required signatures, failure to translate into Vietnamese, damaged or lost vouchers, or signing accounting vouchers without proper authority. 5-10
Non-compliance with wording, numbers, monetary units and accounting period regulations. 10-20
Issuing more than one voucher for each transaction, or inconsistent content in voucher copies compared with the original. 20-30

 

Accounting Documents

 

Penalties for infringements concerning accounting records, chart of accounts, financial statements, document retention and governance are listed below:

 

Issues / Errors Penalty (million VND)
Accounting Records  
Accounting records lack signatures, have no page numbering, or are not stamped across pages. 1-2
No accounting vouchers to prove data is recorded. 3-5
Chart of Accounts  
The chart of accounts used doesn’t comply with current regulations. 10-20
Financial Statements ("FS")  
Financial Statement Format  
The FS are missing information, lacking required signatures, or do not comply with requirement templates. 5-10
Parts of the financial statements are missing. 10-20
The FS data is not consistent with the data from the accounting records. 20-30
Financial Statement Lodgement  
Late lodgment of FS, up to 3 months late. 5-10
Late lodgment of FS, more than 3 months late, or failure to attach the audited FS for companies that require an annual audit. 10-20
Document Retention  
Document retention for less than required period. 5-10
Governance  
Failure to appoint a Chief Accountant or person in charge of accounting, or failure to declare changes with the tax authority. 5-10
Appointing or hiring a Chief Accountant who fails to meet legal requirements. 20-30

 

Asset Records

 

Non-compliance with maintaining asset inventories will lead to the following penalties:

 

Issues / Errors Penalty (million VND)
Failure to total the inventory reports, or having reports lacking required signatures, or Failure to reflect differences between actual inventory on hand and accounting records. 1-2
Failure to record assets in accordance with regulations. 3-5

 

Statute of Limitations

 

The statute of limitations for Accounting Administration Infringements is 2 years.

 

    • For acts of administrative infringements which have ceased, the statute of limitations commences from the ending date of the infringing events.
      For acts of administrative infringements which are currently occurring, the statute of limitations commences from the time of detection of the infringing events.

 

 

Enterprises in Vietnam need to take a cautious and careful approach towards their accounting system, and we encourage enterprises to seek professional, external advice and assistance to ensure compliance and avoid penalties from authorities.

 



For further information contact:

 

Matthew Lourey, Managing Partner

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Phan Thi Thu Thuy, Senior Manager - Accounting

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Nguyen Thi Thuy, Business Manager

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