Facing a deemed tax assessment in Vietnam: what rights do businesses have and how should they respond?
The short answer
A deemed tax assessment (ấn định thuế) occurs when the tax authority determines the tax payable itself, instead of relying on the figures the business declared. Under Law on Tax Administration No. 108/2025/QH15, the tax authority may impose one where a business:
fails to register for tax or file returns;
files incomplete, untruthful or inaccurate returns;
fails to produce books, invoices or records;
uses unlawful invoices or documents;
fails to comply with related-party transaction rules.
A deemed assessment is not the final word. The business has the right to:
know the basis of the assessment;
give explanations and provide supporting documents;
reserve its position;
complain about or challenge the decision in court.
An early response, backed by documents and legal reasoning, is usually the most effective way to narrow the amount assessed.
How does a deemed assessment differ from an ordinary adjustment?
In an ordinary audit, the tax authority reviews the figures the business declared, then disallows expenses or adjusts revenue using the business's own books.
A deemed assessment goes further. Where the authority considers the business's figures unreliable or unavailable, it uses other sources to determine the liability:
the tax administration database;
data on businesses in the same industry and of similar size;
documents and the results of audits or verifications.
Because it does not rest on the business's own data, a deemed assessment is usually higher and harder to contest. The longer the business takes to provide documents, the more likely the deemed figure becomes final.
Common triggers
Practical situation | Ground for assessment | Associated risk |
Books or records cannot be produced in an audit (data loss, staff turnover, poor archiving) | Failure to produce books and records | Revenue or profit margin assessed at industry averages |
Invoice data and bank inflows exceed declared revenue | Incomplete or inaccurate declaration of the tax base | Tax collection, with possible tax evasion review |
Invoices from "ghost" or absconded companies | Use of unlawful invoices | Disallowed expenses and input VAT, heavy penalties |
Foreign-invested company with persistent losses and no transfer pricing documentation | Non-compliance with related-party rules | Transfer prices assessed using comparable data, higher taxable income |
An activity not declared at all (asset leasing, capital transfer) | Failure to file | The full liability for that activity is assessed |
A note on related-party transactions. Decree No. 255/2026/ND-CP adds national databases to the data sources used to determine related-party prices. It also provides that the tax authority may not use the Country-by-Country Report (CbCR) to adjust prices. Both are important points for challenging an assessment based on unsuitable data.
What rights does the business have?
The right to know the basis. The business may ask the tax authority to explain the method, data sources and comparable companies used. It is impossible to rebut a figure without knowing how it was calculated.
The right to explain and provide documents. The business may submit evidence of its actual figures. Where the evidence is sufficient, the authority must consider an adjustment.
The right to reserve its position. If the business disagrees, it records its position in the minutes. It should not sign anything it does not agree with.
The right to complain or litigate against the assessment decision and any accompanying penalty decision.
The right to confidentiality of the data and transactions provided to the tax authority.
How to respond: a five-step process
Step 1: Identify the precise ground for the assessment. Each ground calls for a different response. Missing records must be reconstructed. Unlawful invoices require proof that the transactions are genuine. Related-party issues require a defence of the method and comparables.
Step 2: Request the basis in writing. Ask the tax authority for the calculation method, data sources and criteria for selecting comparables.
Step 3: Reconstruct and organise records. Gather contracts, invoices, bank statements, warehouse records and accounting software data. Where data has been lost, counterparties, banks or e-invoice providers may be able to supply copies.
Step 4: Explain in writing, with legal reasoning. The written explanation should match each point of the assessment against evidence and specific rules. Where possible, propose a more reasonable alternative, for example comparables that better match the business's industry and size.
Step 5: Prepare to complain. If the authority still issues an assessment the business disagrees with, track the complaint deadline closely and prepare the file immediately. A complaint does not suspend enforcement of the decision. The business should therefore consider paying the amount to avoid late-payment interest while pursuing the complaint.
Illustrative case
Company H, a building materials trader, changed its chief accountant mid-year and lost part of its 2024 records. In an audit, it could not produce its detailed cost-of-sales ledger.
The tax authority assessed a gross margin of 18% based on the industry average. That is far above the company's actual margin of around 9%.
Company H responded on three fronts:
it asked the authority to identify the comparable companies, then showed that they were mainly retailers, whereas the company sells wholesale to contractors at lower margins;
it reconstructed its cost of sales from input e-invoice data, bank payments to suppliers and warehouse issue data in its software;
it proposed recalculating cost of sales on the basis of the reconstructed data.
As a result, most of its cost of sales was accepted and the assessment was reduced significantly from the initial draft.
Prevention: five things to do now
Archive electronic records systematically with backups, especially before changes in accounting staff.
Regularly reconcile declared revenue with e-invoice data and bank inflows.
Vet suppliers before transacting to avoid unlawful invoices.
For businesses with related-party transactions: prepare and update transfer pricing documentation on time. Even where exempt, keep supporting evidence.
Amend known errors early, within the 5-year window under the 2025 Law on Tax Administration.
FAQs
When may the tax authority impose a deemed assessment?
Where a business fails to register or file, files incomplete or inaccurate returns, fails to produce records, uses unlawful invoices or does not comply with related-party rules.
What is a deemed assessment based on?
Mainly the tax administration database, data on similar businesses in the same industry and of similar size, and documents and audit results. For related-party transactions, national databases may also be used under Decree No. 255/2026/ND-CP.
Does a deemed assessment carry penalties?
Usually, yes. Depending on the nature of the conduct, the business may face a penalty of 20% of the under-declared tax, or much higher penalties if the conduct is treated as tax evasion.
What if the business disagrees with the assessment?
It may complain or bring a lawsuit. As a complaint does not suspend enforcement, the business should consider paying to avoid late-payment interest.
Legal basis
Law on Tax Administration No. 108/2025/QH15 and Decree No. 252/2026/ND-CP.
Decree No. 255/2026/ND-CP on tax administration of related-party transactions.
Decree No. 125/2020/ND-CP, as amended by Decree No. 310/2025/ND-CP.
Law on Complaints 2011, as amended by Law No. 136/2025/QH15.
How W&A can help
In deemed assessment cases, the gap between the initial figure and the final figure depends heavily on the quality of the business's response. With tax lawyers, licensed tax agents and transfer pricing specialists, W&A supports businesses with:
Review of draft assessments: analysing the basis, method and data used by the tax authority and identifying points to challenge.
Record reconstruction: rebuilding figures from e-invoice, bank and accounting software data.
Written explanations and attendance at meetings with the tax authority.
Defence of related-party positions: challenging comparables and proposing suitable alternative methods.
Complaints and litigation against assessment and penalty decisions.
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