The General Department of Taxation has issued Official Dispatch 1927, instructing subordinate units to strengthen oversight and step up inspections of firms with prolonged losses or unusually thin profit margins. The move aims to detect tax evasion and fraud while ensuring full and accurate state budget collection.
The 302 companies identified for monitoring and potential audits are based in key economic hubs, including Ho Chi Minh City, Hanoi, Bac Ninh, Hung Yen, Ninh Binh, Dong Nai and Phu Tho.
In Hanoi, tax authorities plan to inspect several major firms, including TOTO Vietnam Co., Ltd., KFC Vietnam Joint Venture Co., Ltd., Thanh An Automobile JSC, Minh Tan Hanoi Real Estate Co., Ltd. and Phuong Dong Hanoi Real Estate Co., Ltd.
In Ho Chi Minh City, a number of high-profile brands have been listed for tax review, such as Be Group JSC, Lotteria Vietnam Co., Ltd., Mercedes Benz Vietnam Co., Ltd., Nguyen Kim Trading JSC, VNG Group JSC, Petro SG Co., Ltd., Tung Ho Steel Vietnam Co., Ltd. and Anheuser Busch InBev Vietnam Co., Ltd.
Meanwhile, in Dong Nai, tax inspections will target companies including Vina Plastics Chemicals Co., Ltd., Pegas Group JSC, PELIO Group JSC, Hung Nghiep Formosa Co., Ltd. and Tenma HCM Vietnam Co., Ltd.
March 31 marked the deadline for corporate income tax finalisation. A nationwide review of filings revealed that more than 400 enterprises with annual revenues exceeding VND 1 trillion (approximately USD 40 million) have reported losses for multiple years or only marginal profits.
During inspections of persistently loss-making or low-margin firms, the tax authority has instructed officials to focus on several key areas.
First, auditors must assess the validity of revenue, costs and profits, with particular scrutiny on large or unusual expenses. This includes comparing revenue fluctuations with corresponding input costs and cross-checking with relevant documentation.
Second, authorities will verify the timing of revenue recognition and value-added tax declarations to ensure compliance with accounting periods and prevent underreporting or false declarations.
In addition, tax units will review input and output VAT declarations, invoices and supporting documents to ensure they are valid and recorded in the correct reporting period. Costs of goods sold, administrative expenses and sales expenses will also be examined to confirm their relevance to business operations.
The General Department of Taxation also highlighted internal financial arrangements, including intra-group interest expenses and service fees such as management support, technical services, licensing and franchising, to ensure they reflect arm’s-length transactions and are linked to revenue generation.
Companies are required to carefully review contracts for buying and selling goods with related parties, ensuring compliance with transfer pricing principles and market-based pricing.
Tax units must submit detailed inspection plans for each enterprise in April, provide monthly progress updates, and compile final results by December.
Final reports are required to specify additional tax collected, penalties imposed, and common violations among long-term loss-making firms. Authorities must also evaluate tax administration performance, identify challenges, and propose appropriate policy solutions.
