Tax planning strategies for FDI businesses in Vietnam

FDI (Foreign Direct Investment Enterprise) is an enterprise with foreign direct investment capital, established and operating in Vietnam according to the law. This is a form of international investment, in which foreign investors directly invest capital in enterprises in Vietnam to own part or all of the enterprise and participate in the management and operation process. Therefore, S4B Vietnam’s Tax Accounting Services service for FDI enterprises in Vietnam will help enterprises say goodbye to worries about tax planning strategies for businesses in Vietnam.

1. Should foreign enterprises outsource Tax Accounting Services or use internal accounting?

To choose the appropriate form of Tax Accounting Services, enterprises should carefully consider the following criteria:

1.1 Salary and other expenses:

The salary paid to the tax accounting department of foreign enterprises is often quite high, averaging 20 – 30 million per month, not including allowances such as insurance and periodic bonuses, while the cost of hiring accounting services for foreign companies is lower, depending on the service packages that the company wants to use.

Moreover, to have a complete accounting department, not only good employees are needed but also investment in equipment serving accounting operations such as corporate tax preparation and filing software and good data processing computers.

1.2 Regarding human resources:

For outsourced tax accounting services, service providers always ensure to arrange a permanent person in charge of accounting work for customers. In the company, the staff is often unstable because employees quit or take maternity leave, which will waste time and costs in handing over books, work and retraining human resources.

1.3 Responsibility:

In case of errors, the company implementing the service will take responsibility to the competent authority and compensate for damages within the scope of the signed contract. As for accounting at the company, if the employee makes a mistake, the business must bear all the risks.

Corporate tax preparation and filing services

1.4 Professionalism:

If you hire unqualified employees, it will take time to train them, if you recruit professional accountants, the salary will be quite high. However, for accounting services for foreign companies, your business only needs to pay a reasonable fee (usually lower cost) while still ensuring compliance with tax regulations and work progress is completed quickly and transparently by a team of professional staff with many years of experience in the profession, easily handling arising problems.

Thus, for large-scale foreign companies that need to handle a large volume of work, they can design their own highly qualified accounting department at the company or choose a faster solution, which is to hire a reputable accounting firm to take charge of bookkeeping and tax reporting in the company.

For small and medium-sized foreign enterprises with limited resources and budget, it is not necessary to have a permanent accounting staff. Therefore, the optimal solution for these enterprises is to hire accounting services for foreign companies.

2. How to choose a suitable tax accounting service provider

Currently, there are many Tax Accounting Services providers for foreign companies on the market. To select a quality service provider to help increase the company’s operational efficiency, we would like to suggest the following factors to help businesses easily evaluate and consider carefully:

• Professionalism: Professionalism is demonstrated through the way of working, handling work related to financial accounting in an effective, transparent and timely manner. In addition, professionalism is also the ability to professionally perform specific tasks for foreign enterprises.
• Experience: To evaluate the quality of Tax planning strategies for businesses, it is necessary to consider the qualifications of the staff. The selected personnel should be those with many years of experience in the tax accounting industry, especially tax for foreign companies. In addition, Vietnamese personnel who have worked in that country will help businesses have more advantages in the process of working together.
• Professional certificates: CPA Auditor certificates, tax procedure service practice certificates, and other licenses not only ensure competence and professional qualifications but also demonstrate the ability to take responsibility for all activities signed with foreign partner companies. Not only that, this is also a factor demonstrating the prestige and reputation of the service provider compared to other units.

S4B Vietnam’s consultation of Tax planning strategies for businesses

3. Notes when using outsourced Tax Accounting Services of FDI enterprises

When deciding to hire Tax planning strategies for businesses services, foreign companies need to pay attention to the following agreements:

• Foreign companies need to request a clear list of tasks that the service provider needs to perform for their company.
• Consider tax audit data explanation services if your business is still lacking confidence and has not fully prepared documents and accounting books when receiving a tax audit decision. Therefore, ask the partner to provide this provision, which may be outside the contract and will be accompanied by an additional fee.
• Based on the form of service contract that the enterprise requires, agree on the content at 2 levels of “Doing it for you” or “Consulting and reviewing” to see if it is suitable for the amount that the company pays to the service provider.
• It should be clearly stated which party will be responsible for submitting declarations, tax reports and responsible for preserving and managing the expiry date of the digital signature.
• Foreign enterprises should require the partner to promptly report on monthly and quarterly indicators: VAT deducted/payable, financial statements, total revenue, expenses and net assets, expected corporate income tax in the period and solutions

Tax Accounting Services is not simply Corporate tax preparation and filing but also an important tool to enhance the reputation and credibility of businesses in the eyes of investors, shareholders and business partners. Tax Accounting Services Company acts as a bridge to help organizations ensure the accuracy and honesty of financial reports, thereby helping to improve transparency in the economy.

Contact S4B Vietnam today for a consultation of Tax planning strategies for businesses! Let us help you navigate the complexities of doing business in Vietnam!

S4B Vietnam

• Address: Unit 701B – 701C, Tower A, Handi Resco 521 Kim Ma Street, Ba Dinh District, Hanoi, Vietnam.
• Tel: + 84 24 3974 4181
• Email: service@s4b.com.vn

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