New Decree on Law No. 68/2014/QH13 (Law on Enterprise)

On October 19, 2015, the Government issued Decree No. 96/2015/ND-CP, providing guidance on Law on Enterprise.

Important points are the following:

  • Enterprises established before July 1, 2015 may keep using their seals without notifying the seal models to the provincial business registration departments. Any enterprises that make additional seals or change the ink color of the seal shall follow the procedures for notifying the seal model according to regulations on enterprise registration.
  • In case an enterprise established before July 1, 2015 makes a new seal, the old seal and the certificate of seal registration must be returned to the police authority that issued the certificate. The police authority shall issue a notice of receipt when receiving the enterprise’s seal.
  • In case an enterprise established before July 1, 2015 loses its seal or certificate of seal registration, it may make a new seal in accordance with this Decree and must concurrently notify the loss of the seal or certificate to the police authority that issued the certificate.

This Decree comes into force on December 8, 2015 and replaces Decree No. 102/2010/NĐ-CP.


Degree on polices for female employees

On October 1, 2015, the Government issued Decree No. 85/2015/ND-CP, detailing a number of articles in Law No. 10/2012/QH13 (Law on Labor) in terms of policies for female employees.

Highlights are the following:

Rights of female employees to work equally prescribed in Clause 1 Article 153 of Law on Labor is now specified as follows:

  • The employer shall ensure  equal rights between male employees and female employees in terms of recruitment, assignment, training, wages, awards, promotion, payment of wage and policies on social insurance, medical insurance, unemployment insurance, working conditions, labor safety, working time, rest time and other welfare pertaining to physical and spiritual condition.
  • The state shall ensure the equality mentioned above in labor relation and policies on preferential treatment and occasional tax reduction.

This Decree instructs the state to encourage employers to:

  • Prioritize females in recruitment and assignment if the job is suitable for both males and females and the applicant is qualified.
  • Establish and carry out better policies for female employees than the ones regulated in the laws.

Benefits of female employees are specified in this Decree as follows;

  • Employers shall ensure that there are sufficient bathrooms and restrooms at work place according to regulations of the Ministry of Health. Employers are encouraged to build up flexible work schedules according to reasonable requests of female employees.
  • Female employees are eligible for health care service as follows:
    • When having periodic check-up, female employees will receive maternity-related examination.
    • During the menstruation, female employees will have time-off of 30 minutes per day for at least 3 days per month. Employees shall be fully paid for such time-off.
    • During the time of raising infants, female employees will have time-off of 60 minutes per day to breastfeed children, collect and store milk or to take rest. Employees shall be fully paid for such time-off.
  • If a pregnant employee has a confirmation given by a competent medical facility that the continuation of working will impact negatively the embryo, she may unilaterally terminate or suspend the labor contract.
  • The employer shall build up plans on establishment of kindergartens or provision of subsidies on fees for kindergartens.

This Decree No. 85/2015/ND-CP comes into effect on November 15, 2015.


Official Letter on Circular 200/2014/TT-BTC

On September 9, 2015, Ministry of Finance issued Official Letter No. 12568/BTC-CĐKT answering some questions raised by Big 4s related to Circular 200/2014/TT-BTC.

Some of the highlights are as follows:

Selection of accounting currency

  • In case a company has majority of purchase and sales transactions in a foreign currency, the company can choose to use VND as accounting currency despite it satisfies conditions to use foreign currency as its accounting currency.

Conversion of financial statements prepared in foreign currency

  • Enterprises are allowed to apply actual exchange rate at January 1, 2015 to convert the retained earnings as of January 1, 2015 presented in the Notes to the Financial Statements from foreign currency to VND. The reason is that Circular 200 is applied from 2015 and there is no requirement for retrospective application in respect to the translation of retained earnings at January 1, 2015.

Other exchange rate matters

  • Buying exchange rate is applied for purchase of fixed assets or expense transactions paid in foreign currency (not through account payable). This selection of exchange rate is to ensure assets recognition is not higher than recoverable amount.
  • Selling exchange rate is used for purchase of fixed assets or expense transactions on credit. This selection of exchange rate is to ensure payable recognition is not lower than payment obligation.


  • The recognition of internal revenue and cost of goods sold and purchase transactions among dependent accounting units without legal personality is decision made by the enterprise irrespective of whether invoices or cum internal transportation notes have been issued or not.
  • Enterprise is not allowed to accrue revenue deductions because if a revenue deduction is determined exactly, net revenue shall be recorded. In case revenue deductions incur in the year following the year the revenue was recorded, the deduction should be adjusted to the year revenue was recorded or should be recorded in the peiord deduction incurred as stipulated in accounting standard on subsequent events after reporting date.

Prepaid expenses

  • The classification of long-term and short-term prepaid expenses is determined based on the original term of such prepaid expenses, not based on the remaining term.
  • Item “increase/decrease in prepaid expenses” in cash flow statement does not simply reflect the difference between closing and opening balances of prepaid expense account. This is because long-term prepaid expenses account (Account 242) is used to record land lease fee paid at once, which does not satisfy conditions to be recorded as non-current intangible assets. If the land lease fee is paid in installment, the cash outflow is considered as cash flow from operating activities. However, cash outflows of fees paid for land lease fee at once and purchase of land use right are treated as cash flows from investing activities.

Investment property

  • Enterprises do not depreciate investment property held for capital appreciation according to Circular 200. Circular 200 does not require retrospective adjustment. Therefore, accumulated depreciation of investment properties held for capital appreciation recorded prior to adaptation of Circular 200 should be included in “accumulated depreciation”, and it should not be offset against related purchase cost. This amount should be disclosed in a separated line item of accumulated depreciation in the Notes to the Financial Statements.
  • If there is evidence that value of investment property is less than the market value and the loss is measured reliably, the company must reduce the cost of investment property and record the loss as cost of goods sold. Enterprises should record impairment losses in accordance with international accounting practices. When the value of investment property rises again, enterprise can make reversal transaction (maximum amount of reversal is limited to the impairment loss recorded for that asset).

Accounting record

  • Enterprises are required to develop forms of accounting books of their own and provide true and fair information in the Financial Situations. However, unlike under Decision 15, previous accounting guidance, Circular 200 does not specifically require to present opposite account for each transaction in the general ledger the company maintains.


Official Letter on tax inspection

On October 27, 2015, General Department of Taxation issued Official Letter 4445/TCT-KK, explaining the actions it takes when late tax payment is identified during tax inspections.

This Official Letter summarizes that during tax inspection, if tax authority finds out:

  • Tax payer issued invoice in wrong date leading to late declaration of tax payable and late tax payment or
  • Before tax inspection, tax payer issued invoice, declared and paid the above tax payable amount.

The following actions are taken:

  • Tax payer shall be fined for violation of regulation on using invoices.
  • Tax authority shall calculate and determine the tax liability arisen at the “should-be” invoice date. Then, late tax payment (if any) will be calculated until the time tax payer declared and paid full tax amount due for related transactions.

The following regulations are the basis for this conclusion stated in the Official Letter.

The date of invoice is regulated in accordance with Point 3 of Article 15 in Decree No. 51/2010/ND-CP dated May 14, 2010.

“3. Date of issuing an invoice is the date on which the seller and buyer carry out procedures to acknowledge that the ownership or use right over goods and services has been transferred. In cases in which it is provided by law that the transfer of ownership or use right takes effect from the time of registration, the date of issuing an invoice is the date of delivery of goods.

In case of multiple delivery of goods or transfer of goods item by item or services stage by stage, an invoice must be made out for each delivery and transfer for the volume and value of delivered or transferred goods or services.”;

The detailed guidance of Decree No.51/2010/ND-CP, Point 2 of Article 16 in Circular 39/2014/TT-BTC dated March 31, 2014, also specifies the invoice date for construction and installation service as follows.

“Date of an invoice for construction and installation is the day on which the finished work or item is accepted and transferred, whether money is paid or not.”

Point 1 of Article 33 in Decree No. 51/2010/ND-CP describes fines for violation on invoice usage as follows;

“1. A fine of between VND 200 thousand and VND 1 million shall be imposed for acts of failing to fully fill in pre-printed contents when making out invoices or filling in them in contravention of Article 15 of this Decree”

The calculation of late payment penalty is found in Point 1 of Article 41 in Circular 166/2013/TT-BTC dated November 15, 2013.

“1. Late payment of tax and fines shall be dealt with in accordance with the Law on Tax administration and its guiding documents.

If tax is found understated after inspection, late payment interest shall be imposed at 0.05% per day on the tax arrears. If the taxpayer fails to pay tax arrears after 90 days from the deadline, which is written on the penalty decision or the decision to collect tax arrears, the taxpayer shall incur a late payment interest at 0.07% per day on the tax arrears.