Tax accounting services in foreign languages

Accounting documents are papers proving that after an enterprise performs financial transactions of the company, this operation is only carried out when it has been completed to reflect financial operations before the tax authority. Accounting vouchers written in foreign languages, when used to record accounting books and make financial statements in Vietnam, must have the principal contents specified in Clause 1, Article 16 of the Accounting Law translated into Vietnamese. The accounting unit shall be responsible for the accuracy and completeness of the contents of the translated accounting vouchers. Viet An Tax Agent would like to introduce to you “tax accounting services in foreign languages” to support businesses in translating accounting documents.

What are accounting vouchers written in foreign languages?

Accounting vouchers written in foreign languages are explained in Clause 1, Article 3 of Circular No. 38/2013/TT-NHNN as follows:

“Vouchers written in foreign languages are accounting vouchers under the provisions of the Accounting Law, arising outside the territory of Vietnam and may be written in foreign languages on accounting vouchers”

Thus, according to the above provisions, accounting vouchers written in foreign languages are accounting vouchers under the provisions of the Accounting Law, arising outside the territory of Vietnam and may be written in foreign languages on accounting vouchers.

Required contents to be translated into foreign languages

Pursuant to Clause 1, Article 16 of the Law on Accounting 2015, a number of main contents in accounting vouchers that need to be translated into foreign languages include:

Principles of translation of accounting documents

Clause 5, Article 5 of Decree 174/2016/ND-CP explains the case of accounting documents written in foreign languages as follows:

Accordingly, when used to record accounting books and stamping financial statements in Vietnam, the main contents specified in Clause 1, Article 16 of the Accounting Law 2015 must be translated into Vietnamese

The accounting unit shall be responsible for the accuracy and completeness of the contents of accounting vouchers translated into foreign languages into Vietnamese. Accounting vouchers translated into Vietnamese must be enclosed with the originals in foreign languages.

Documents enclosed with accounting vouchers in foreign languages such as contracts, dossiers enclosed with payment vouchers, investment project dossiers, settlement reports and other relevant documents of accounting units are not required to be translated into Vietnamese unless requested by competent state agencies.

Documents enclosed with accounting vouchers in foreign languages such as contracts, dossiers enclosed with payment vouchers, investment project dossiers, settlement reports and other relevant documents of accounting units are not required to be translated into Vietnamese unless requested by competent state agencies.

Primary language of dealing with tax authorities

When an enterprise uses accounting documents and other relevant papers to transact and declare with the tax authority, the language used in the transaction document with the tax authority must comply with Article 85 of Circular 80/2021/TT-BTC.

Specifically, the language used in tax dossiers is Vietnamese, and documents in foreign languages must be translated into Vietnamese

Accordingly, the taxpayer shall sign and affix a seal on the translation and take responsibility before law for the content of the translation

In case the document in a foreign language has a total length of more than 20 pages of A4 paper, the taxpayer shall issue a written explanation and request to translate only the contents and terms related to the determination of tax obligations

For dossiers of application for tax exemption or reduction under tax agreements, depending on the nature of each type of contract and the request of the tax authority (if any), the taxpayer needs to translate the contents of the contract such as:

Consular legalization of papers and documents issued by foreign competent agencies is only mandatory in specific cases guided in Articles 30, 62 and 70 of Circular 80/2021/TT-BTC.

Some related questions

Is there a penalty for using foreign documents to record accounting books in Vietnam without translating them into Vietnamese?

Regarding this act, it will be administratively sanctioned according to the provisions of Clause 2, Article 8 of Decree 41/2018/ND-CP as follows:

“A fine of between VND 5,000,000 and VND 10,000,000 shall be imposed for one of the following acts:

a) Making accounting vouchers with insufficient number as prescribed by each type of accounting voucher

b) Signing accounting vouchers without sufficient contents of the vouchers under the responsibility of the signatories

c) Signing accounting vouchers in contravention of competence

d) The signature of a person is inconsistent with or inconsistent with the register of signature samples

dd) Accounting vouchers without sufficient signatures according to the titles specified on the vouchers

e) Failing to translate accounting vouchers in foreign languages into Vietnamese as prescribed

g) Causing damage or loss of accounting documents and vouchers in the process of use”

Thus, if the company fails to translate accounting vouchers in foreign languages into Vietnamese, it will be fined from 5 million to 10 million VND.

Is it allowed to use foreign currency for accounting bookkeeping?

Article 4 of Circular 200/2014/TT-BTC stipulates monetary units in accounting as follows:

“1. Enterprises engaged in collecting and spending mainly in foreign currencies shall base themselves on the provisions of the Accounting Law to consider and decide on the selection of monetary units in accounting and take responsibility for such decisions before law. When selecting the currency in accounting, the enterprise must notify the tax authority directly managing it.

2. Monetary unit in accounting is a monetary unit:

a) It is mainly used in sales and service provision transactions of the unit, has a great influence on the selling price of goods and the provision of services and is usually the currency used to post the selling price and be paid; and

b) It is used mainly for the purchase of goods and services, which has a great impact on the cost of labor, raw materials and other production and business costs, usually the currency used to pay for such expenses

3. The following factors shall also be considered and evidence of the currency in the entity’s accounting shall be provided:

a) Monetary units used to mobilize financial resources (such as issuance of stocks and bonds)

b) Monetary units that are regularly collected from business activities and stored up.

4. The monetary unit in accounting reflects transactions, events and conditions related to the operation of the unit. Once the currency in accounting has been determined, the unit must not be changed unless there is a material change in such transactions, events and conditions.”

Thus, the use of foreign currencies in accounting only applies to accounting units that mainly collect and spend in foreign currencies and meet the standards as prescribed above and accounting units are only allowed to select one type of foreign currency as the currency unit for recording in accounting books.

If you have any difficulties or questions related to tax accounting services in foreign languages, please contact Viet An Tax Agent for the most specific advice.