Annual Compliance in Vietnam: A Guide for Foreign-Owned Enterprises (FOEs)

Step 1: CIT Finalization

• Deadline: The last day of the third month after the close of the annual accounting period
• Form Submission: Use Form 03/TNDN and submit it to the tax authority
• Importance: Conducting CIT finalization is a mandatory step for all FOEs operating in Vietnam

Step 2: PIT Finalization

• Responsibility: FOEs are responsible for finalizing all Personal Income Taxes (PITs) of their employees, covering deductions from salaries throughout the year.
• Deadline: The last day of the fourth month from the end of the calendar year.
• Importance: Accurate PIT finalization ensures that both employers and employees comply with Vietnamese tax law.

Step 3: Social Insurance Finalization

• Mandatory: The social insurance scheme is mandatory for all Vietnamese and foreign employees working in Vietnam under labor contracts.
• Completion Deadline: Specified by the Ministry of Labor, Invalids and Social Affairs.
• Importance: FOEs must maintain accurate records of their employees’ social insurance status to avoid legal issues.

Step 4: Profit Remittance

• Eligibility: After completing tax finalization or terminating investment projects in Vietnam, profits can be remitted to offshore accounts if the business has fulfilled all financial obligations to the State.
• Importance: Compliance with Vietnamese law is crucial for smooth profit remittance.

Conclusion

Annual compliance not only satisfies legal requirements but also serves as an opportunity for companies to assess their financial health. FOEs should direct any inquiries related to annual compliance in Vietnam to the Ministry of Finance or professional service firms operating within the country to ensure they are in compliance with Vietnamese law and can remit profits without issues.