New Inspection Regime for Foreign Owned Enterprises
Vietnam’s Ministry of Finance (MoF) has issued Decision 1381/QD-BTC introducing a new inspection regime for Foreign-invested enterprises (FIEs). The decision is already in effect since 24 July 2017. The MoF will be coordinating with other departments such as General Department of Customs, Department of Tax Policy, Department of Finance, Department of Planning and Investment, and provincial Tax and Customs Departments to supervise and audit FIEs. The new decision is being implemented to reduce malpractices by existing FDI firms.
The annual audits are supposed to take place in October, while the next year’s inspection plans will be decided by the MoF’s Inspectorate, and submitted to MoF and the Ministry of Planning and Investment (MPI), before November 30 of the same year.
The scope of inspection will include auditing the following;
- Value of assets contributed as capital by the foreign-owned enterprises such as land use rights, tangible and intangible fixed assets;
- Use of imported assets such as machinery and equipment which were imported duty free for purposes as declared;
- Provision of loans (corporate bonds, bank loans etc.);
- Making and use of provisional funds, depreciation of fixed assets, and accounting of exchange rate differences;
- Profit share from state-contributed capital in foreign invested economic organisations or projects;
- Ownership changes
- Ensuring commitments made in order to qualify for financial incentives and investment support (excluding tax incentives);
Although the decision is in place, there is not much information about the timeline regarding inspections. Foreign owned enterprises should be prepared for inspections anytime this year.
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