The impacts of COVID-19 on corporate governance & compliance in Vietnam (2020).

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The impacts of COVID-19 on corporate governance & compliance in Vietnam (2020)

With companies active in Vietnam impacted by the current Covid-19 situation, and facing structural and operational complications., it is important to be able to maintain compliance and ensure their business continuity plan is sustainable. Therefore, businesses need to have in place a clear corporate governance framework, covering all levels of compliance and operational strategy. Integrating these with an efficient risk management approach and a clear employee engagement and protection policy, businesses in Vietnam can overcome the difficulties they are facing and maintain their ability to operate.

1. Completing the Annual Finalisations and Audit

Most companies in Vietnam should be in the process of completing their Annual Finalisations and Audits for lodgement, according to requirements from the authorities.

All foreign invested companies in Vietnam must undertake an annual audit, and the audit report must be lodged with the tax authorities along with their annual tax finalisation within 90 days after tax year end, (in most cases, 30 March 2020).

Enterprises are required to have submitted the following annual taxation reports by their respective deadlines:

  • Corporate Income Tax Finalisation;
  • Personal Income Tax Finalisation declaration; and
  • Annual Transfer Pricing and Related Party declarations and submissions (as required);

Due to the outbreak of Covid-19, the Ho Chi Minh City Department of Taxation issued a notification regarding support for 2019 PIT finalisations on 2 March 2020. The notice confirms the deadline for 2019 PIT finalisations as 30 March 2020, except those with tax refund requests which can be lodged after this deadline. The Department will provide support and answer questions on PIT finalisation through online channels such as its website, Facebook page, and instructional video clips.

The Department and all 24 Tax Offices in Ho Chi Minh City will not arrange facilities for taxpayers to lodge their finalisation returns in person as in previous years. Taxpayers are therefore required to prepare tax returns and lodge online at

When providing original tax finalisation documents, the Department encourages taxpayers to send by post. If taxpayers choose to lodge documents directly during office hours, they must register online for an appointment with a tax officer first. More information about these here: Learn more

Companies with difficulties with lodgements should discuss with their local authority, and relief may be available for deferred/delayed payments based upon draft tax relief packages that have been announced (and discussed further below).

2. Apply and use a Compliance Calendar

Maintaining a Compliance Calendar assists companies in Vietnam to understand, plan and meet their obligations with Vietnamese authorities. Due to the recent complicated events, it is essential for business owners to have a clear updated calendar to take appropriate actions on time during the epidemic.

We have previously released our annual 2020 Vietnam Compliance Calendar, which provides an overview of the key dates and obligations for Accounting, Taxation, Payroll and Statistical Lodgements for Vietnamese entities for the next 12 months. This guide provides is an important foundation for any company’s compliance and reporting planning in Vietnam. To download the PDF file, please click here: Learn more

3. Support your Workforce and understand your Employment Obligations

During this period of the Covid-19 pandemic, business owners need to be aware and consider how they can support their employees in this difficult time. Their is the difficult decision of letting staff go where business sectors have long term impacts (ie, tourism), or whether other arrangements can be put in place to ensure a business infrastructure remains in place for when the recovery starts to occur.

For foreign employees, the authorities have been updating restrictions and requirements with the issuance of Visas, Work Permits and TRC’s. The employers should regularly check any relevant updates from the authorities to ensure their employees’ status remains legal and compliant. For some further information, please visit: Learn more.

Furthermore, there have been concerns and confusion regarding unilateral contract termination, reduction on hours or salaries, and sickness insurance for employees in quarantine. There are laws and regulations that support employers during “dangerous epidemics” but the employers should be careful when making decisions, as they are required to be agreement with the employees as well by mutual consent. For further information, please visit Learn more.

4. Advance digital transformation for your compliance systems

As the world continues moving towards digitalisation of economies, with each country taking differing steps towards this goal, Vietnamese companies can take advantage of the current situation and make significant advances in their digital transformation strategy.

Some of the key steps in ensuring companies can design an effective digital structure are implementing remote work policies, understanding how to maintain or increase productivity with remote-work programs, enhancing ways of communication with new technologies such as video conferencing, task management and document sharing.

The Vietnamese government begun to apply digital approaches to support compliance procedures. For instance, the Ho Chi Minh city Department of Taxation encourages taxpayers through online channels such as its website, Facebook page and instructional videos. In additional, there are several government apps and websites launched to support your compliance system to be executed online.

5. Adopt a Risk Management approach on all levels of compliance

Business owners should analyse the situation carefully, considering potential scenarios and plan on how to deal with them. Along with the general financial and welfare concerns for staff, businesses should prioritize the physical safety of their staff. Companies need to keep aware that working from home may be the key short-term solution which they need to consider in the near future. It is imperative to ensure all the staff are ready to work from home if the need arises.

Vietnamese authorities have taken drastic measures in the last few weeks such as limiting immigration and travel rights for foreign individuals entering the country, in order to maintain control. This poses significant statutory compliance risks for foreign employees and foreign investors on such things like Legal Representative, Visas, Work Permits, etc. Therefore, foreign investors should review their legal documentation to ensure the company and its staff remain compliant. Learn more

6. Stay updated with how authorities support businesses in time of crisis

Vietnamese authorities have proposed various levels of business support, and in coming days we expect these to be formally announced and signed by the Prime Minister for implementation. Below is an outline of the initial draft support tax support for businesses during Covid-19 (although we are aware that the final proposal provided to the Prime Minister for signing provides expanded support, and there is an additional proposal for employee support):

  • Applicable beneficiaries of the draft decree: The draft Decree intends to provide tax deferrals to some of the enterprises, individuals and household businesses.
  • Extended deadline for corporate VAT payments: VAT payments for companies will be delayed by 5 months from their current deadlines, with companies still required to submit and file VAT returns in accordance with current filing deadlines.
  • Extended deadlines for household businesses and individuals for pit & vat: For household businesses and individuals in the specified sectors/business activities, the payment deadline for VAT and PIT will be extended until 15 December 2020.
  • Annual land rental fee deferral: the first payment for 2020 annual land rental fees, where these payments are paid directly to the State, will be deferred for 5 months, where the land is used for the specified sectors/business activities.

For further information, please visit Learn more.

Last updated on November 12, 2020

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