The annual tax health check: a 12-point framework for Vietnamese businesses before every year-end close

The short answer

A company's "tax health" is like a person's health: regular check-ups are cheap, treating a serious illness is expensive. An annual self-review, carried out in Q4 before the year-end close, should answer 12 questions:

• does revenue match across data sources;

• are invoices issued at the right time;

• are any suppliers risky;

• do expenses meet the deductibility conditions;

• are related-party, foreign contractor tax, payroll and insurance obligations met;

• do tax incentives still meet their conditions;

• are there prior-year errors that should be amended.

When the tax authority manages by data and prioritises remote audits, the question is no longer "will it be found?" but "when will it be found?". A self-review lets the business find issues first. When an issue is found has a direct bearing on the penalty.

Why do it every year rather than waiting for an audit?

First, the cost of fixing errors rises over time. Errors that the business finds and amends before an audit decision usually cost only the tax shortfall and late-payment interest. Errors found by the tax authority also bring penalties and may be treated more severely.

Second, the amendment window is limited. The 2025 Law on Tax Administration allows amendments within 5 years of the filing deadline for the period concerned. Errors left too long may fall outside the self-correction window.

Third, the rules keep changing. In the past two years alone, Vietnam has introduced the 2024 VAT Law, the 2025 CIT Law, the 2025 Law on Tax Administration and a series of new decrees on invoicing and related-party transactions. A process that was correct last year may not be correct this year.

The 12-point framework

#	Area	Key question	Red flags
1	Revenue reconciliation	Does revenue match across e-invoices, ledgers, VAT returns and the CIT return?	Unexplained differences between sources
2	Invoice timing	Are invoices issued at the correct time for each revenue type?	Invoicing on collection instead of completion; month-end consolidation where not permitted
3	Input invoices	Are there invoices from suppliers that have ceased operating, left their address or carry risk alerts?	Intermediary suppliers with no real operating capacity
4	Payment	Does every invoice of VND 5 million or more have non-cash payment evidence?	Cash spending at branches or stores
5	Non-deductible expenses	Are interest, overtime, voluntary insurance and costs failing sector-law conditions correctly excluded?	No schedule of non-deductible expenses
6	Related-party transactions	Have all related parties been identified? Are TP documentation and the interest cap dealt with?	Persistent losses, large fees paid to the parent
7	Foreign contractor tax	Have service fees, royalties, software and advertising paid abroad been correctly withheld?	Employees paying overseas services on personal cards
8	Payroll, PIT and social insurance	Do payroll per the ledger, PIT returns and social insurance records match?	Allowances and bonuses not taxed or not insured
9	Tax incentives	Are incentive conditions (sector, location, size) still met this year?	15% or 17% rate applied despite related-party links
10	VAT rates	Are the 0%, 5%, 8% and 10% rates and exempt items applied correctly?	Missing export documentation; reduced rate applied in error
11	Tax account position	Do debts, late-payment interest and overpayments on the system match the books?	Payments posted to the wrong code, long-standing "stuck" balances
12	Prior-year errors	Are there known issues not yet amended? Which periods are close to the 5-year limit?	Audit qualifications relating to tax

How to make the review genuinely useful

Choose the timing. October and November are ideal. The business is still within its financial year and can adjust processes, add documents and set the right Q4 provisional payment.

Work from data, not instinct. Start by reconciling data: export all output and input e-invoices from the system and compare them with the ledgers and returns. Most risks surface at this step. It is also how the tax authority now works.

Add an independent perspective. Finance teams can become blind to their own processes. An independent specialist can spot what insiders miss, especially issues where law, contracts and tax intersect.

The output must be an action plan. A good output has three parts:

• a risk map ranked by severity and amount;

• a list of immediate fixes;

• process changes for the following year.

Illustrative case

Company S, a packaging manufacturer with annual revenue of around VND 300 billion, ran a self-review in October. It found three issues:

• Technical support fees of VND 2.5 billion a year paid to its overseas parent had not been subject to FCT withholding since 2022.

• A loan from the director equal to 12% of owner's equity, made during the year. Under Decree No. 255/2026/ND-CP, this loan creates a related-party relationship, which the company had not declared.

• Three materials suppliers had been flagged as "not operating at the registered address".

The company dealt with each issue:

• it declared and paid FCT for the periods still within the 5-year window;

• it added the loan to the related-party appendix for its CIT finalisation;

• it prepared evidence that the transactions were genuine for invoices issued before the suppliers' status changed.

All of this was completed before any request from the tax authority. Because it amended proactively, the company mainly paid the tax shortfall and late-payment interest.

FAQs

How often should a tax health check be done?

At least once a year, ideally in Q4 before the year-end close. It is also worth doing before major events such as M&A, restructuring, a change of chief accountant or dissolution.

Are self-identified errors penalised?

If amended before an audit decision, the business usually pays only the tax shortfall and late-payment interest. The exact outcome depends on the case under the penalty rules in force.

Do small businesses need one?

Yes. Small businesses often have fewer finance resources, so the risk of omissions is higher. The scope can be narrower, focusing on revenue, invoices, expenses and PIT.

Is a financial statement audit enough?

No. A statutory audit focuses on the fair presentation of the accounts. It does not replace an in-depth review of tax compliance.

Legal basis

• Law on Tax Administration No. 108/2025/QH15 and Decree No. 252/2026/ND-CP.

• VAT Law No. 48/2024/QH15, as amended by Law No. 149/2025/QH15.

• CIT Law No. 67/2025/QH15 and Decree No. 320/2025/ND-CP.

• Decree No. 254/2026/ND-CP on invoices and e-documents; Decree No. 255/2026/ND-CP on related-party transactions.

• Decree No. 125/2020/ND-CP, as amended by Decree No. 310/2025/ND-CP.

How W&A can help

The Tax Health Check is a service W&A carries out regularly for foreign-invested and private Vietnamese businesses. The approach combines data analytics with the perspective of tax lawyers and chartered accountants:

• Annual Tax Health Check using the 12-point framework, adaptable to industry and size.

• Analysis of e-invoice, ledger and tax return data to identify differences the way the tax authority does.

• Risk map and remediation plan, prioritised by severity and amount.

• Proactive amendments within the statutory window, minimising penalties.

• Targeted reviews before major events: M&A, restructuring, dissolution and handover of the chief accountant role.