Accounting in Vietnam: An Overview for 2025

Accounting in Vietnam is built around Vietnamese Accounting Standards (VAS), a rules-based framework that underpins both corporate governance and tax compliance. For foreign investors, understanding VAS is essential to maintaining compliance, avoiding penalties, and aligning local operations with global reporting requirements.

This guide provides an overview of VAS, its differences from International Financial Reporting Standards (IFRS), and practical considerations for businesses operating in Vietnam.

Vietnamese Accounting Standards (VAS)

VAS forms the backbone of Vietnam’s accounting system. Unlike IFRS, which is principles-based, VAS is rules-driven and closely tied to the tax system.

Key features of VAS include:

• Standard Chart of Accounts (COA): All enterprises must adopt a fixed COA, with limited flexibility.

• Language: Records must be kept in Vietnamese (dual language is allowed, but Vietnamese takes priority).

• Currency: Accounting must be in Vietnamese Dong (VND), with limited exceptions.

• Documentation: Written vouchers and signed accounting records are required, often with physical or digital signatures.

• Chief Accountant Requirement: Every company must appoint a Chief Accountant responsible for financial statements and tax lodgements.

Failure to comply with VAS can result in tax penalties, financial restatements, and reputational risks.

VAS vs IFRS: Key Differences

While VAS was originally influenced by older international standards, it has diverged significantly from modern IFRS.

• Revenue Recognition: IFRS recognizes revenue when control transfers; VAS when risks and rewards transfer.

• Asset Valuation: IFRS allows fair value and impairment testing; VAS relies on historical cost.

• Financial Instruments: IFRS applies complex fair value models; VAS uses simplified, cost-based approaches.

• Leases: IFRS requires most leases on the balance sheet; VAS still classifies them as operating or finance leases.

For investors, this means financial statements prepared under VAS may not align with group-level IFRS reporting, making reconciliation and layered reporting essential.

Accounting & Tax Compliance in Vietnam

Unlike many jurisdictions, accounting in Vietnam is deeply integrated with taxation. Accounting records double as tax records, and authorities rely on them to assess Corporate Income Tax (CIT), VAT, and other obligations.

Key implications:

• Journals must follow prescribed ledger accounts to ensure tax deductibility.

• Contract and invoice details (names, addresses, amounts) must match exactly.

• Errors or omissions can result in disallowed deductions and fines.

The Chief Accountant plays a pivotal role, being legally responsible for both accounting accuracy and tax compliance.

Practical Challenges for Foreign Investors

Foreign investors often face unique challenges when structuring accounting systems in Vietnam:

• Software & Reporting: Accounting software must support VAS compliance while also meeting group reporting needs (multi-currency, cloud-based, IFRS mapping).

• Compliance Calendar: Local tax deadlines (VAT, CIT, year-end reporting) must be coordinated with group-level reporting cycles.

• Centralization Risks: Outsourcing accounting outside Vietnam may lead to compliance failures, since local expertise, language, and Chief Accountant oversight are required by law.

The best approach is often a dual-layered system: maintaining full VAS compliance locally, while preparing adjustments for IFRS consolidation at the group level.

How Alitium Supports Investors

At Alitium, we help foreign companies establish and maintain robust, compliant accounting systems in Vietnam. Our services include:

• Chief Accountant services to ensure ongoing compliance.

• VAS-to-IFRS reconciliations for group reporting.

• Tax integration support, including VAT and CIT compliance.

• Accounting software implementation adapted to Vietnam’s legal environment.

• Advisory and training for finance teams navigating VAS vs IFRS challenges.

With extensive experience in assisting investors in Vietnam, our team combines deep regulatory knowledge with practical solutions, helping businesses remain compliant while achieving efficiency and transparency.

Vietnam’s accounting system is unique: highly compliant, tax-driven, and evolving towards IFRS. For foreign investors, building a VAS-compliant accounting framework while aligning with global standards is the cornerstone of sustainable business success.

For further advice and assistance in planning your market entry and accounting structure, or to assist with your current operations in Vietnam, reach out to us on our contact page: https://www.alitium.com/contact/