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Ministry of finance The Socialist Republic of Vietnam
No.84 TC/CDKT Independence-freedom-Happiness
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Hanoi, 23rd October, 1993
I. GENERAL PROVISIONS.
1/ All joint venture enterprises, enterprises with 100% foreign capital, foreign part undertakings and export and process enterprises (hereinafter referred to as the "enterprise") which are operating within the Socialist Republic of Vietnam, shall impleme nt their accounting operation in accordance with the Ordinance on Accounting and Statistics dated May 10,1988 and the provisions of this Circular.
2/ The accounting procedures of all enterprises shall ensure the faithful, regular, accurate, timely and continuously recording of work:
+ Expressing the current figures and movement of all assets, capital and sources of business funds;
+ Expressing the expenses, cost of products and services, the revenue and profit of the enterprises business activities;
+ Expressing the observance of Vietnamese Laws on Tax and other duties in accordance with the investment license.
3/ Enterprises shall operate their accounting procedures in accordance with the current accounting system of the Socialist Republic of Vietnam or any other system which chosen by the enterprise provided that the system must observe generally accepted Int ernational Accounting Standards and audit principles and must be approved in writing by the Ministry of finance before realization.
4/ Enterprises shall submit to the Ministry of finance the registration document of the accounting system which includes.
4.1. The registration latter of accounting system (form in annex No.1);
4.2. The investment license (copy);
4.3. In case the Vietnamese accounting system is used, it shall be identified as to what economic sector (industry, basic construction, commerce, service, agriculture).
4.4. In case a foreign accounting system issued, it shall be enclosed with the following documents:
+ A list of accounting vouchers to be used with samples attached.
+ The chart of accounts to be used with explanations of its contents, the method of recording the accounts, and a general chart of the accounting system utilization.
+ A list of accounting books with samples attached and an explanation on the method of recording and the relationship between the books.
+ A list of accounting reports attached with samples and explanations on the method of recording every specific item in the reports.
4.5. The chief accountant's certificate of accounting profession.
5/ Within 180 days from the date of the investment license, the enterprise must send the accounting system registration documents to the Ministry of finance. If the enterprise has not yet to been able to register their accounting to the Ministry of financ e.
6/ Within 30 days from the date of receiving the above documents, the Ministry of finance shall reach an official opinion in writing regarding the accounting system. In case the accounting system application of the company if not complete, unclear, the Mi nistry of finance will request the concerned enterprise to give further explanations and provide the necessary documents to supplement the registered documents. The time waiting for the answers is not counted in the time limit for the reply of the Ministr y of finance as mentioned above.
7/ Enterprises operating in processing zones in Vietnam shall send the registration documents of the accounting system to the board of management of the processing zone in accordance with the contents stipulated in point 4 and point 5 as mentioned above.
8/ foreign parties participating in contractual business in Vietnam must carry out their accounting operation according to the currently used accounting system and must registered this system with the Ministry of finance as mentioned in point 3 above. Du ring the time of contract realization, there must be adequate necessary accounting records with regard to their operations in Vietnam to facilitate Vietnamese authorities to carry out examinations and treatments based on laws on disputes if any.
9/ During the process of operations, the enterprise may change its registered accounting system. In this case the enterprise has to explain the reasons and redo all registering procedures which must be approved by Ministry of finance before utilization. C hange of accounting system can be made only at the beginning of an accounting year.
10/ The accounting operation of all enterprises shall be subject to the control and supervision of the financial bodies of the Socialist Republic of Vietnam.
11/ All records kept in relation to the accounting documents books and records of the enterprise shall be indexed using Arabic and Vietnamese or Vietnamese and a common foreign language as approved by the Ministry of finance, and this must be mentioned in the enterprise's statute.
12/ All of the values in the accounts must be expressed in Vietnamese currency or another foreign currency approved by the Ministry of finance. In the event that an accounting document is prepared using a different currency, then that currency shall be co nverted in accordance with the buying exchange rate of the State Bank of Vietnam at the date the transaction occurred.
In respect of the quantity, it shall be used the official unit of measurement in the Vietnam. In case that the accounting document is recorded in another unit of measurement, it shall be converted using the official unit of measurement before entry.
13/ The accounting year of the enterprise shall be the calendar year, commencing on the first day of January and ending on the thirty first day of December.
The accounting period within an accounting year shall be:
+ Month: from the first day to the end of the last day of each month.
+ Quarter from the first day of quarter to the end of the last day of the same quarter.
The implementation of any other accounting year must be approved by the Ministry of finance.
+ The first accounting year of the enterprise must be calculated from the day issuing the investment license to the last pay of that accounting year.
14/ Each enterprise shall have an independent accounting section with a sufficient number of accountants whose titles must agreed to stipulated standardized titles. The accountants are guaranteed the right to remain independent in the exercise of their p rofession. The head of the accounting section shall be the chief accountant appointed by the Board of Directors. The chief accountant shall be responsible for organizing and directing the accounting procedures, economic statistic, analyzing economic activ ities and shall examine and control the financial of the activities of the enterprise.
The chief accountant and other accountants of the enterprise shall be selected from persons who are qualified with either a certificate or diploma in financial accounting.
15/ The accounting data and information shall be legal evidences for the purpose of assessing the results of an enterprise's production and business operations and to fulfill all obligations owed to the State Bank of Vietnam and investing or joint venture parties.
II. SPECIfiC PROVISIONS
1/ The accounts of an enterprise shall consists of the system of accounting vouchers to be opened, the flow and processing of source documents, the entry (detailed accounts and general accounts) of financial statements, internal controls and the filing of accounting records.
2/ The accounting vouchers:
The accounting vouchers consist of source documents and entry vouchers. The source document is the legal evidence reflecting the financial transaction incurred. The entry vouchers is the basis of recording.
All economic activities undertaken by the enterprise shall be recorded in the source document. A source document is made for each transaction and shall be faithful, regular, lawful. reasonably reflecting the financial economic content of the enterprise an d shall follow the printed forms of the State.
- If the accounting vouchers documentation system of a foreign country is applied, it shall be exactly the same as registered forms which are approved by the Ministry of finance. Especially sales invoices must be on printed forms issued by the Ministry of finance. In case of using their own printed forms, the enterprise must register them with the Department of Tax of Vietnam for approval before their use.
- The accounting must be the original and not a copy.
3/ The enterprise shall use only the accounting system and accounting books which has been registered and approved.
Every enterprise shall have only one official system of accounting books and it must be legal and reasonable. The accounting books include the general journal, general ledger and detail ledger. The enterprise shall base on the accounting system, the accou nting policies and management requirements to open the necessary accounting books of the enterprise. All data recorded in the books of account shall be on the legal accounting document of the enterprise. It must be up date in the accounting period and th e accounting year; continuous and systematic.
4/ Enterprise shall prepare an accounts report in accordance with the accounting year registered and approved by the Ministry of finance. The accounts report must use faithful, correct figures throughout the report.
The accounts report shall consist of:
4.1. The trial balance (balance -sheep) which reflects the value and the structure of all kinds of capital, the source of capital of the enterprise as at the end of each accounting period and the financial year.
4.2. The profit and loss statement shall reflect the revenue receive, lawful expenditures and the profits of the business activities.
4.3. The report by the board of management (or board of directors) of the enterprise shall state the true results of carrying on the business of the enterprise, the situation of distribution and use of profits from the business and recommendations on busi ness activities.
In the event that one of the joint venture parties requests an exchange report (from the report using accounting standard of a foreign country), the enterprise has the responsibility to make the exchange report and sent it to the party requesting it.
5/ Place at which the accounting reports are to be submitted:
+ Enterprise with one hundred (100) per cent foreign owned capital and foreign parties contracting cooperation shall submit their accounting reports to the State Committee for Cooperation and Investment;
+ Joint venture enterprises: reports shall be submitted to the State Committee for Cooperation and Investment, the tax office of the province where the head office of the enterprise is located and the joint venture parties;
+ Enterprise in the special export processing zones: reports shall send to the board of management of the special export processing zone, tax office of the special export processing zone and the joint venture parties.
6/ Deadlines for the submission of reports:
+ Quarterly reports: within 30 days of the end of each quarter in respect to which the report has been prepared.
+ Annual report: within 3 months of the date of close of the financial year.
7/ The annual accounting report of the enterprise shall be confirmed by an audit agency before being submitted to the State Committee for Cooperation and Investment and the Ministry of finance as referred to in clause 5 of point II.
The enterprise shall appoint a legal audit agency of Vietnam which shall conduct the audit of the accounting books and reports of the enterprise.
In the event that the enterprise wants to appoint a foreign audit agency which has not yet received a license to operate in Vietnam, the enterprise shall follow the following conditions:
+ Enterprises with 100% foreign invested capital and foreign parties contracting cooperation shall inform to Ministry of finance that an audit agency shall be appointed for their consideration and approval and the enterprise shall pay tax to the State of Vietnam for this audit agency in accordance with the law on its operation in Vietnam.
+ Joint venture enterprise: The audit agency which is appointed shall link with an audit agency of Vietnam to conduct the audit. The result of the audit has only a legal value when the two parties are of one mind, then the foreign audit company to be appo inted will conduct the audit of the enterprise after informing and being approved by the Ministry.
8/ The audit agency shall be responsible before the law for the independence, objectiveness and faithfulness of the results of audit.
The audit report shall be enclosed with the financial statements of the enterprise.
The audit report shall comment on the following:
+ The faithfulness and the accuracy of the accounting data on the financial statements of the enterprise;
+ The situation of the accounts of the enterprise and compliance with accounting standards and regulations;
+ Recommendations.
9/ The enterprise shall compile an inventory of property at the end of each accounting year to determine the actual amount and the status of the property of the enterprise.
10/ Accounting information includes: Documents, books, records and information related to accounting. This information shall be carefully and safely maintained when in use. The accounting information shall be archived in its original form for a minimum of 10 years at the enterprise.
A foreign invested capital enterprise which fails to comply with or violates the above- mentioned regulations shall be treated in accordance with the Law on Accounting and Statistic dated May 10, 1988.
III. PROVISIONS fOR EXECUTION.
This Circular is in replacement of Circular No. 46 TC/CDKT of the Ministry of finance dated October 21, 1989 and it shall be valid from the signing day. All enterprises shall strictly and fully observe all regulations in this Circular. The local tax offic e and the management board of export process zones shall be responsible for guidance and examination to the enterprises which they supervise in accordance with the regulations of this Circular.
for the Ministry of finance
Vice Minister
PHAM VAN TRONG (Signed)