Nghị định 174/2016/ND-CP

DECREE

ELABORATION OF SOME ARTICLE OF THE LAW ON ACCOUNTING

Pursuant to the Law on Government organization dated June 19, 2015;

Pursuant to the Law on Accounting dated November 20, 2015;

At the request of the Minister of Finance;

The Government promulgates a Decree on elaboration of some Article of the Law on Accounting.

Chapter I

GENERAL PROVISIONS

Article 1. Scope

This Decree elaborates some Articles of the Law on Accounting on accounting works, organization of the accounting apparatus and accountants, accounting services, provision of transboundary account services and accountant associations.

Article 2. Regulated entities

1. The entities specified in Clauses 1, 2, 3, 4, 5, 6, 7, 8, 9 Article 2 of the Law on Accounting.

2. Foreign organizations and individuals (other than those mentioned by Vietnam’s law) earning income from provision of services or services attached to goods in Vietnam (hereinafter referred to as “foreign contractors”).

3. Budget and finance accounting units of communes.

4. Other organizations and individuals involved in accounting and provision of account services in Vietnam.

Article 3. Definitions

In this Decree, the terms below are construed as follows:

1. A business accounting unit means an enterprise established and operating within Vietnam’s law; a branch in Vietnam of a foreign enterprise; a cooperative, cooperative association, project management board or another unit having its own legal status established by an enterprise.

2. A state accounting unit means state budget authority (State Treasuries, tax authorities, customs authorities); budget accounting and finance units of communes, regulatory bodies, public service agencies, units using state budget; project management boards having legal status established by regulatory bodies or public service agencies; organizations managing off-budget financial fund; organizations funded by the State to pursue certain political – social objectives.

3. Other accounting units are accounting units other than those specified in Clause 1 and Clause 2 of this Article.

4. Accounting unit manager means an enterprise’s manager or founder as defined by enterprise laws; a member of the Board of Directors of a cooperative as defined by the Law on Cooperatives; the head or legal representative of the accounting unit; a person holding a managerial position who is entitled to make transactions on behalf of the accounting unit.

5. Accounting service provider means an accounting firm, accounting household, Vietnamese branch of a foreign accounting firm, or a foreign accounting firm providing transboundary accounting services in Vietnam.

6. Transboundary accounting service provider means a foreign accounting firm permitted to provide accounting services for Vietnamese organizations without a commercial presence in Vietnam.

7. Accounting works involve accounting records, accounts and accounting books; financial statements; accounting inspection; stocktaking; retention of accounting documents; accounting works in case of division, amalgamation, merger, conversion, dissolution or bankruptcy of an accounting unit.

8. Transboundary accounting service joint venture means a joint venture between a foreign accounting firm and an accounting firm in Vietnam to provide accounting services in Vietnam without establishment of a new legal entity in Vietnam.

Article 4. Accounting currency

1. The accounting currency is Vietnam dong; its Vietnamese symbol is “đ” and international symbol is "VND”. Where an economic/financial transaction in a foreign currency occurs, the accounting unit must record the foreign currency and VND at the actual exchange rate, unless otherwise prescribed by law; if there is no exchange rate between the foreign currency and VND, it shall be exchanged into another foreign currency that has an exchange rate with VND.

An accounting unit whose most revenues and expenditures are in a foreign currency may use such foreign currency as the accounting currency and has to take legal responsibility for such action and notify its supervisory tax authority. The exchange rate between a foreign currency and accounting currency in financial statements shall follow instructions of the Ministry of Finance, unless otherwise prescribed by law.

2. State accounting units shall convert revenues and expenditures in foreign currencies into VND in accordance with the Law on State budget.

3. Unit of products and working time in accounting include tonne, quintal (100 kilograms), kilogram, square meter, cube meter, working day, working hour and other units of measurement defined by measurement laws.

4. When an accounting unit consolidates financial statements of its subsidiaries or affiliated units or when a superior state accounting unit consolidate financial statements or budget statements of its inferior units, the abbreviated currency used on the consolidated statement may be 1,000 dong if at least one entry thereon consists of 9 digits or more; 1 million dong if 12 digits or more; 1 billion dong if 15 digits or more.

5. When publishing a financial statement or budget statement, the abbreviated currency specified in Clause 4 of this Article may be used.

6. When using an abbreviated currency, decimals may be rounded up if greater than or equal to 5.

Chapter II

SPECIFIC PROVISIONS

Section 1. CONTENTS OF ACCOUNTING WORKS

Article 5. Accounting documents

1. Accounting records must be made in a clear, complete, timely, and accurate manner in accordance with Article 16 of the Law on Accounting.

2. A business accounting unit may design its own accounting records as long as they are conformable with provisions of Clause 1 Article 16 of the Law on Accounting and suitable for its operation, unless otherwise prescribed by law.

3. In the cases where a person suffering from complete vision loss has to sign an accounting record, the signing must be witness by a sighted person assigned by the accounting unit that issued such record. A person suffering from partial vision loss shall sign accounting records in accordance with provisions of the Law on Accounting.

4. Accounting units using electronic documents as prescribed in Article 17 of the Law on Accounting may use digital signatures in accounting. Digital signatures and the use thereof shall comply with provisions of the Law on Electronic transaction.

5. Primary contents of accounting records in foreign languages used for recording accounting books and preparing financial statements in Vietnam must be translated into Vietnamese language in accordance with Clause 1 Article 16 of the Law on Accounting. The accounting unit is responsible for the accuracy of such Vietnamese translations. The Vietnamese translations of accounting records must be attached to the original versions.

Vietnamese translations of documents in foreign languages attached to accounting records such as contracts, project dossiers, statements, etc. are not mandatory unless required by a competent authority.  

Article 6. Photocopies of accounting documents

1. Accounting documents must be photocopied from originals. Validity and retention of photocopies of accounting documents are the same as originals. Photocopies of accounting documents must bear signatures and seals (if any) of the legal representative of the accounting unit or of the competent authority that confiscates the originals. An accounting unit may only photocopy its accounting documents in the cases specified in Clause 2 through 5 of this Article.

2. In the cases where an accounting unit has a project that is granted a loan or funded by a foreign entity and has agreed to submit the original accounting records to the foreign sponsor, their photocopies retained by the accounting unit must bear the signature or seal (if any) of the legal representative (or authorized person) of the sponsor or the accounting unit.

3. In the cases where a program/project is presided over by a unit but executed at multiple units, accounting records shall be retained by those using the funding for such program/project. If accounting records have to be sent to the presiding unit, the funding user shall send photocopies bearing the signature and seal (if any) of its legal representative (or authorized representative) to the presiding unit.

4. In the cases where original copies of accounting documents of a accounting units is impounded or confiscated, their photocopies that are retained must bear the signature and seal (if any) of the legal representative (or authorized representative) of the competent authority that decide their impoundment or confiscation as prescribed in Clause 2 Article 7 hereof.

5. In the cases where accounting documents are lost or destroyed because of inevitable incidents such as natural disaster, flooding, conflagration, etc., the accounting unit must ask for their photocopies from its buyers, sellers or relevant entities. The photocopies must bear the signature and seal (if any) of the legal representative (or authorized representative) of such buyers, sellers or relevant entities.

6. In the cases where such an entity is not able to provide photocopies of accounting records because it has been dissolved, bankrupt or shut down, the legal representative of the accounting unit shall establish a council, which will issue a document certifying that photocopies of accounting documents are not obtainable and take legal responsibility for such certification.

Article 7. Sealing, impoundment and confiscation of accounting documents

1. In the cases where a regulatory body issues a decision to seal accounting documents as prescribed by law, the accounting unit and representative of such regulatory body shall issue a sealing record. The sealing record must specify the reasons for sealing, types of documents, quantity of each type, accounting period and other necessary information about the sealed documents. The sealing record must bear the signatures and seal (if any) of the legal representative of the accounting unit, the legal representative (or authorized representative) of the regulatory body.

2. In the cases where accounting documents are impounded or confiscated by a regulatory body, the accounting unit and legal representative of such regulatory body shall issue a document transfer record. The document transfer record must specify the reasons for sealing, types of documents, quantity of each type, accounting period and other necessary information about the impounded or sealed documents; time for returning accounting documents in case of impoundment.

The document transfer record must bear the signatures and seal (if any) of the legal representative of the accounting unit, the legal representative (or authorized representative) of the regulatory body; the accounting unit must make photocopies of the impounded or confiscated accounting documents. Photocopies of accounting documents must bear the signature and seal (if any) of the legal representative (or authorized representative) of the regulatory body.

Electronic accounting documents must be printed, signed and stamped in order to be impounded or confiscated.

Article 8. Accounting documents that have to be retained

The following accounting documents have to be retained:

1. Accounting records.

2. Detailed accounting books and overall accounting books.

3. Financial statements; budget statements; consolidated budget statements.

4. Other documents related to accounting works, including: contracts; administrative accounting reports; financial statements of completed projects and projects of national importance; reports on stocktaking and asset valuation; documents related to inspection and audit; records on destruction of accounting documents; decisions on addition of capital from profit, contributions to funds from profits; documents related to dissolution, bankruptcy, division, consolidation, merger, shutdown, conversion of the enterprise; documents related to receipt and use of funding or capital; documents related to taxes, fees, charges and other liabilities to the State; other documents.

Article 9. Preservation, retention and publication of accounting documents and information

1. Accounting documents retained must be original copies as prescribed by law, except:

a) Accounting documents specified in Clause 2 and Clause 3 Article 6 hereof, each which has only one original copy but has to be retained by more than one entities, in which one of them may retain the original copy while the others may retain its photocopies.

b) Impounded or confiscated accounting documents as prescribed in Clause 4 Article 6 hereof, in which case their photocopies may be retained together with the document transfer record specified in Clause 2 Article 7 hereof.

c) Accounting documents that are lost or destroyed by inevitable incidents specified in Clause 5 Article 6 hereof, in which case their photocopies may be retained. In the cases where photocopies of them are unobtainable as mentioned in Clause 6 Article 6 hereof, the accounting unit shall retain the document certifying that such photocopies are unobtainable.

2. Accounting documents must be fully and safely stored by accounting units. Each accounting unit shall establish its own rules for management, use and storage of accounting documents, which specify the responsibility and right of each department and accountants. An accounting unit that is an extra-small enterprise is not required to establish its own rules for management, use and storage of accounting documents but has to fully and safely retain them as prescribed. An accounting unit must provide adequate equipment for management and storage of accounting documents. Accountants are responsible for protection of their accounting documents.

3. The legal representative of an accounting unit shall decide whether to store its accounting documents physically or electronically. The storage of accounting documents must be safe, secured and information must be provided at the request of competent authorities.

4. Accounting documents must be fully and systematically stored and sorted by creation date.

5. The legal representative of the accounting unit shall promptly provide information and accounting documents to tax authorities and competent authorities as prescribed by law. The authorities provided with accounting documents shall protect them and return them in time and in full after use.

Article 10. Electronic accounting documents

1. Every accounting record and accounting book must be printed out for archiving. The electronic accounting documents must be stored safely and accessible.

State accounting units (except for state budget collectors and users) that use electronic accounting documents must print out the general accounting books, have them signed and stamped (if any) for archiving. The legal representative of an accounting unit shall decide whether to print out accounting records, detailed accounting books and other accounting documents. State budget collectors and users shall comply with regulations of the Minister of Finance.

2. The accounting unit shall print out the electronic accounting documents and have them signed and stamped by the legal representative or chief accountant (or acting chief accountant) whenever a competent authority needs them for inspection or audit purposes.

Article 11. Accounting document storage location

1. An accounting unit shall store its own accounting documents. Each accounting unit must have adequate equipment to safely store its accounting documents.

It may hire an external organization to store its accounting documents by concluding an archiving contract as prescribed by law.

2. Accounting documents of a foreign-invested company, branch or representative office in Vietnam of a foreign enterprise shall be stored by an accounting unit in Vietnam or an external archive in Vietnam over its operating period specified in its certificate of investment, certificate of enterprise registration, certificate of branch or representative office registration.  When it ceases its operation in Vietnam, its legal representative will decide the place where the accounting documents are stored, unless otherwise prescribed by law.

3. Accounting documents of a unit that is dissolved, bankrupt, shut down or a project that is shut down include accounting documents of whose retention period is not expired, accounting documents related to the dissolution, bankruptcy or shutdown shall be stored at a place decided by the legal representative of such accounting units or the authority that decided its shutdown.

4. Accounting documents of a unit that is converted include accounting documents of whose retention period is not expired, accounting documents related to the conversion stored by the new accounting units or at a place decided by the authority that decided the conversion.

5. Accounting documents of a divided unit may be stored by the new unit or the old unit or at a place decided by the authority that decided such division. Accounting documents related to full division of an accounting unit (the transferor) shall be stored by the new accounting units (the transferees). Accounting documents related to partial division of an accounting unit (the transferor) shall be stored by both the transferor and the transferee.

6. Accounting documents whose retention period is not expired and accounting documents related to consolidation or merger of accounting units shall be held by the acquirer or the consolidated unit.

7. Accounting documents about national defense and security shall be stored in accordance with relevant regulations of law.

Article 12. Accounting documents to be retained for at least 5 years

The following accounting documents have to be retained for at least 5 years:

1. Accounting records that are not directly recorded to accounting books and financial statements such as collection notes, payment notes, which are not enclosed with accounting documents.

2. Accounting documents serving management of an accounting unit that are not directly recorded in accounting books and financial statements.

3. In the cases where other laws prescribe that the documents specified in Clause 1 or Clause 2 of this Article have to be retained for more than 5 years, such law shall apply.

Article 13. Accounting documents to be retained for at least 10 years

The following accounting documents have to be retained for at least 10 years:

1. Accounting records directly recorded in accounting books and financial statements, statements, detailed accounting books, general accounting books, monthly, quarterly and annual financial statements, annual statements, internal audit reports, accounting document destruction records and other documents directly recorded in accounting books and financial statements.

2. Accounting documents related to liquidation or transfer of fixed assets; reports on stocktaking and asset valuation.

3. Accounting documents of investors, including annual accounting documents and terminal statements of completed Group B and Group C projects.

4. Accounting documents related to establishment, division, consolidation, merger, conversion of the enterprise, dissolution, bankruptcy, shutdown or termination of a project.

5. Relevant documents such as audit documents issued by State Audit Office of Vietnam, inspection documents issued by competent authorities or documents of independent audit organizations.

6. Documents other than those specified in Article 12 and Article 14 hereof.

7. In the cases where other laws prescribe that the documents specified in Clause 1 through 6 of this Article have to be retained for more than 10 years, such law shall apply.

Article 14. Accounting documents to be permanently retained

1. State accounting units shall permanently retain the following documents: annual state budget statements ratified by state budget, annual local budget statements ratified by the People’s Councils; documents and financial statements of completed Group A projects and projects of national importance; historical accounting documents or those of economic, national security, or national defense importance.

The legal representative of the accounting unit or local government shall identify accounting documents to be permanently retained.

2. Business accounting units shall permanently retain historical accounting documents or those of economic, national security, or national defense importance.

The head or legal representative of the accounting unit shall identify accounting documents to be permanently retained on a case-by-case basis and transfer them to the accounting department or another department for retention in the form of original copies or other forms.

3. Accounting documents to be permanently retained shall be retained for more than 10 years until they are naturally destroyed.

Article 15. Determination of retention period

1. For the documents specified in Article 12, Clause 1, 2, 7 Article 13 and Article 14 hereof, the retention period begins on the ending date of the fiscal year.

2. For the documents specified in Clause 3 Article 13 hereof, the retention period begins from the day on which the financial statement of the completed project is approved.

3. The retention period for accounting documents related to the unit establishment begins on the establishment date; for accounting documents related to division, consolidation, merger, conversion of an enterprise begins on the date of division, consolidation, merger or conversion; for accounting documents related to dissolution, bankruptcy, shutdown, termination of a project begins on the day on which the dissolution, bankruptcy, shutdown or termination procedures are completed; for accounting documents related to audit or inspection documents begins on the issuance date of the audit report or inspection report.

Article 16. Destruction of accounting documents

1. When the retention period expires and no directions are given by competent authorities, accounting documents may be destroyed under a decision of the accounting unit’s legal representative.

2. An accounting unit must destroy its own accounting documents.

3. The accounting unit may decide the destruction method such as burning, cutting, shredding, etc. as long as the destroyed documents can no longer be read.

Article 17. Destruction procedures

1. The legal representative of the accounting unit shall issue a decision to establish a document destruction council. The council consists of the head of the accounting unit, chief accountant, representative of the storage unit and other participants appointed by the legal representative of the accounting unit.

2. The council shall inspect, sort the accounting documents by type, compile a list and a document destruction record.

3. The document destruction record must be made right after accounting documents are destroyed, specify the types of accounting documents destroyed, retention period of each type, destruction method, conclusion and bear the signatures of the council members.

Section 2. ORGANIZATION OF ACCOUNTING APPARATUS AND ACCOUNTANTS

Article 18. Organization of accounting apparatus

1. The accounting unit must appoint accountants in accordance with the Law on Accounting; the quantity of accountants depends of the scope, requirements, functions or duties of the unit. Accountants may undertake other tasks that are not banned by accounting laws.

2. Organization of the accounting apparatus of a unit shall be decided by the regulatory body that established such unit. Organization of the accounting apparatus of a unit that is not established by a regulatory body shall be decided by the unit itself.

Organization of the accounting apparatus and accounting tasks of inferior units other than accounting units or affiliated units other than accounting units shall be decided by legal representative of the accounting unit. State accounting units must not appoint chief accountants or acting chief accountants of units other than accounting units.

Financial statements of an accounting unit shall contain financial information of its inferior units and affiliated units.

3. State budget authorities shall organize their own accounting apparatus.

4. Regulatory bodies, public service agencies using state budget shall assign accounting tasks according to state-funded units.

5. A trained accountant means a person who has an associate degree, college degree, bachelor’s degree or post-graduate degree in finance, accounting or audit granted by higher education institutions in Vietnam and overseas; a person who has the audit practitioner certificate specified in the Law on Independent audit; a person who has the accountant practitioner certificate specified in the Law on Accounting; a person who has the accounting expert certificate or accountant certificate issued by a foreign organization or foreign professional organization recognized by the Ministry of Finance Vietnam.

6. A person who was appointed as chief accountant of a state accounting unit by a competent authority and has worked as chief accountant for such units for at least 10 years by the effective date of this Decree may still be appointed as chief accountant of state accounting units if other requirements are satisfied without having to possess a degree mentioned in Clause 5 of this Article.

7. A person who does not have a degree in finance, accounting or audit but appointed as accountant of a state accounting unit before January 01, 2014 may still work as accountant but will not be appointed as chief accountant until corresponding requirements are satisfied, except for those specified in Clause 6 of this Article.

Article 19. People prohibited from practicing accounting

1. The people specified in Clause 1 and Clause 2 Article 52 of the Law on Accounting.

2. Parents, adoptive parents, spouses, children, siblings of the legal representative, head, Director, General Director, deputies of the head, Deputy Director, Deputy General Director in charge of finance – accounting, and the chief accountant of the same accounting unit, except for sole proprietorships, single-member limited liability companies owned by individuals, other types of enterprises not funded by state budget and are extra-small enterprises defined in the law on provision of assistance for small and medium enterprises.

3. People holding the position of managers, executive officers, treasurers, warehouse-keepers, buyers or sellers of assets in the same accounting unit except for sole proprietorships, single-member limited liability companies owned by individuals, and other types of enterprises not funded by state budget and are extra-small enterprises defined in the law on provision of assistance for small and medium enterprises.

Article 20. Chief accountants and acting chief accountants

1. An accounting unit must have a chief accountant, except for those specified in Clause 2 of this Article. In the cases where a unit is not able to appoint a chief accountant at the time, it may appoint an acting chief accountant or outsource chief accountant works. An acting chief accountant will hold the position for up to 12 months, after which a chief accountant shall be appointed.

2. Acting chief accountant:

a) An accounting unit that has only one accountant or part-time accountant, budget accounting and finance units of communes shall appoint only acting chief accountants, not chief accountants.

b) Extra-small enterprises defined by the law on provision of assistance for small and medium enterprises may appoint acting chief accountants without having to appoint chief accountants.

3. Time limit for appoint chief accountants of state accounting units and acting chief accountant of the unit mentioned in Clause 2a of this Article is 5 years; regulations of law on reappointment of chief accountants and acting chief accountants shall be complied with after such time.

4. When replacing a chief accountant or acting chief accountant, the legal representative or manager of the accounting unit shall transfer the tasks and accounting documents from the old chief accountant or acting chief accountant to the new one; inform relevant departments of the unit; inform the organizations where its accounts are opened of the full name and specimen signature of the new chief accountant or acting chief accountant. The new chief accountant or acting chief accountant shall take over the accounting tasks from the transfer date. The old chief accountant or acting chief accountant is still responsible for the accounting tasks they performed.

5. The Ministry of Home Affairs shall provide instructions on tasks, power of chief accountants and acting chief accountants of state accounting units, procedures for appointment, reappointment, dismissal and replacement thereof.

Article 21. Standards and requirements to be satisfied by chief accountants and acting chief accountants

1. The chief accountant or acting chief accountant must satisfy the standards specified in Points a, c, d Clause 1 Article 54 of the Law on Accounting and are not prohibited from working as accountants as prescribed in Article 19 of this Decree.  The Ministry of Finance shall promulgate regulations on training and licensing chief accountants.

2. The chief accountants and acting chief accountants of the following accounting units must have at least bachelor's degrees in accounting:

a) State budget authorities;

b) Ministries, ministerial agencies, Governmental agencies, agencies affiliated to the National Assembly, other central authorities and accounting units affiliated thereto;

c) Public service agencies of Ministries, ministerial agencies, Governmental agencies, other central authorities and the People’s Committees of provinces;

d) Specialized agencies affiliated to the People’s Committees of provinces and equivalent authorities; regulatory bodies affiliated thereto;

dd) Vertically organized central authorities in provinces;

e) Central and provincial political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations funded by state budget;

g) Management boards of Group A projects and projects of national importance or that have their own accounting apparatus and are funded by state budget;

h) Level 1 state-funded unit of districts;

i) Enterprises established and operating within Vietnam’s law, except for those specified in Clause 3g of this Article;

k) Cooperatives, cooperative associations whose charter capital is at least 10 billion dongs;

l) Branches in Vietnam of foreign enterprises.

3. The chief accountants and acting chief accountants of the following accounting units must have at least bachelor's degrees in accounting:

a) Professional agencies affiliated to the People’s Committee of the province if they have their own accounting apparatus (except for those mentioned in Clause 2h of this Article);

b) Vertically organized central authorities in district authorities; provincial authorities in district authorities;

c) political organizations, socio-political organizations, socio-political-professional organizations, social organizations, socio-professional organizations of districts funded by state budget;

d) Management boards of projects having their own accounting apparatus are funded by state budget, except for those in Clause 2g of this Article;

dd) Budget accounting and finance unit of communes;

e) Public service agencies other than those specified in Clause 2c of this Article;

g) Enterprises established and operating within Vietnam’s law that are not funded by state budget and whose charter capital is smaller than 10 billion dongs;

h) Cooperatives, cooperative associations whose charter capital is smaller than 10 billion dongs.

4. Legal representatives of organizations and units other than those  mentioned in Clause 2 and Clause 3 of this Article shall decide the standards applied to their chief accountants or acting chief accountants in accordance with the Law on Accounting and relevant regulations of law.

5. The chief accountant or acting chief accountant of a parent company that is a wholly state-owned enterprise or an enterprise in which state capital makes up more than 50% of its charter capital has to work in accounting for at least 05 years.

6. The Ministry of National Defense and the Ministry of Public Security shall specify standards applied to chief accountants and acting chief accountants of the People’s armed force units.

Article 22. Outsourcing accounting works and chief accountant’s works

1. a) Business accounting units, public service agencies not funded by state budget and other accounting units mentioned in Clause 3 Article 3 hereof may hire accounting service providers to do their accounting works or chief accountant’s works. Legal representatives of public service agencies may decide whether to hire accounting service providers to do their accounting works or chief accountant’s works.

2. When providing accounting services, the service provider must comply with provisions of Clause 1 Article 51, Article 56 and Article 58 of the Law on Accounting and is not one prohibited from doing accounting works or providing accounting services as specified in Article 19 and Article 25 of this Decree.

3. When providing chief accountant services, the service provider must comply with provisions of Article 56 and Article 58 of the Law on Accounting, Article 21 of this Decree and is not one prohibited from doing accounting works or providing accounting services as specified in Article 19 and Article 25 of this Decree.

4. The person hired to provide accounting services has the rights and responsibilities of accountants specified in Clause 2 and Clause 3 Article 51 of the Law on Accounting. The person hired to provide chief accountant services has the rights and responsibilities of chief accountants specified Article 55 of the Law on Accounting.

5. The legal representative of the accounting unit is responsible for his/her decision outsourcing the chief accountant’s works.

Article 23. Accounting works of representative offices in Vietnam of foreign enterprises, household businesses, artels and foreign contractors

1. The appointment of accountants of a representative office in Vietnam of a foreign enterprise, household business or artel shall be decided by the head of such representative office, household business or artel.

2. Representative offices in Vietnam of foreign enterprises, household businesses and artels may apply corporate accounting regulations to open accounting books serving tax accounting.

3. Foreign contractor having permanent establishments in Vietnam that are not independent legal entities may fully or partly apply Vietnam’s corporate accounting regulations and shall notify tax authorities of their choices.

A foreign contractor that fully applies Vietnam’s corporate accounting regulations must do it consistently throughout the fiscal year.

Section 3. PROVISION OF ACCOUNTING SERVICES

Article 24. Provision of accounting services of audit firms and audit practitioners

1. The audit firm that fully satisfies requirements for provision of audit services prescribed by regulations of law on independent audit may provide accounting services. An audit firm that no longer satisfies requirements for provision of audit services prescribed by regulations of law on independent audit may not provide accounting services.

2. An audit practitioner that fully satisfies requirements for audit practice prescribed by regulations of law on independent audit may provide accounting services. An audit practitioner that no longer satisfies requirements for audit practice prescribed by regulations of law on independent audit may not provide accounting services.

3. Audit firms and audit practitioners are responsible to the Ministry of Finance for their accounting service quality.

Article 25. Cases in which provision of accounting services are prohibited

Enterprises, household businesses providing accounting services and audit firms (hereinafter referred to as “accounting service providers”) must not provide accounting services in the cases where the manager, executive officer or the person that directly performs the account services is:

1. a parent, adoptive parent, spouse, child, sibling of the manager, executive officer or chief accountant of the accounting unit, unless the accounting unit is a sole proprietorship or limited liability company owned by an individual or an extra-small enterprise not funded by state budget as defined by regulations of law on assistance for small and medium enterprises.

2. any of the people specified in Clause 2 through 5 Article 68 of the Law on Accounting.

3. A person in the cases specified by Code of ethics for professional accountants and auditors and the law.

Article 26. Holdings of members that are organizations of a multi-member limited liability company

A member that is an organization may contribute up to 35% of the charter capital of a multi-member limited liability company providing accounting services. If capital is contributed by more than one organization, the total holdings of organizations must not exceed 35% of charter capital of such company.

Article 27. Holdings of accounting practitioners of a multi-member limited liability company

1. A limited liability company providing accounting services must have at least 02 capital contributors who are its accounting practitioners. Holdings of accounting practitioners of such a company must exceed 50% of its charter capital.

2. Accounting practitioners must not work for more than one accounting service providers simultaneously.

Article 28. Professional liability insurance

1. An accounting service provider must buy professional liability insurance, which is the source for paying compensation for its clients in case of damage caused by its accounting practitioners.

2. Professional liability insurance must be bought for an accounting practitioner within 60 days from the day on which he/she is granted the Certificate of Accounting Service Registration.

The cost of professional liability insurance may be aggregated with operating cost as long as it is supported by valid invoices and documents.

3. The accounting service provider and insurer may reach an agreement on the insurance premium, which must not fall below the service charges imposed by the accounting service provider.

Section 4. PROVISION OF TRANSBOUNDARY ACCOUNTING SERVICES BY FOREIGN ACCOUNTING FIRMS

Article 29. Permissible providers of transboundary accounting services for organizations in Vietnam

1. Foreign accounting firms of a WHO member state, a nation or territory that signed an international treaty on provision of transboundary accounting services with Vietnam may provide transboundary accounting services for enterprises and organizations in Vietnam.

2. The performance of accounting tasks according to common policies of a foreign corporation for the parent company and other subsidiaries operating in Vietnam of the same corporation are not considered provision of transboundary accounting services. In such cases, the accounting unit in Vietnam is not considered an accounting service provider defined by this Decree; the chief accountant and legal representative of the accounting unit in Vietnam is totally responsible for the data and financial information of the unit in Vietnam in accordance with Vietnam’s law.

Article 30. Conditions for provision of transboundary accounting services

1. Foreign accounting firms may provide transboundary accounting services if the following conditions are satisfied:

a) It is permitted to provide accounting services as prescribed by law of the nation where its headquarters are situated (home country);

b) An accounting service authority or accounting association of its home country issues a document certifying that it does not violate regulations on provision of accounting services and other laws over the last 3 years before the submission of the application for the certificate of eligibility to provide transboundary accounting services.

c) At least 02 of its employees are granted the Certificate of Accounting Service Registration by the Ministry of Finance, including its legal representative;

d) It has purchased professional liability insurance for its accounting practitioners who work in Vietnam;

dd) It does not incur administrative penalties for violations against regulations on provision of transboundary accounting services in Vietnam over the last 12 months before submission of the application for the certificate of eligibility to provide transboundary accounting services in Vietnam.

2. A foreign accounting firm may only provide transboundary accounting services in Vietnam if it has been registered and granted the certificate of eligibility to provide transboundary accounting services in Vietnam by the Ministry of Finance of Vietnam. The methods for provision of transboundary accounting services must comply with provisions of Article 31 hereof.

3. A foreign accounting firm must maintain fulfillment of the conditions specified in Clause 1 of this Article throughout the effective period of the certificate of eligibility to provide transboundary accounting services in Vietnam. In the cases where any of such conditions is not fulfilled, the foreign accounting firm must inform the Ministry of Finance within 20 days from such date.

Article 31. Methods for provision of transboundary accounting services

1. When providing transboundary accounting services in Vietnam, a foreign accounting firm must form a joint venture with an accounting firm in Vietnam which is qualified for provision of accounting services as prescribed by law.

2. To form a joint venture with a foreign accounting firm to provide transboundary services, the accounting firm in Vietnam must satisfy all conditions for provision of accounting services specified in Article 60 of the Law on Accounting and this Decree and obtain the certificate of eligibility to provide accounting services.

3. The foreign accounting firm and the accounting firm in Vietnam must conclude a joint venture contract for provision of transboundary accounting services. The contract must specify the obligations of each party for provision of transboundary accounting services.

4. When forming such a joint venture to provide transboundary accounting services, the foreign accounting firm and the accounting firm in Vietnam shall conclude an accounting service contract with the client in accordance with Vietnam’s law. The accounting service contract must bear the signatures of the legal representatives of the foreign accounting firm, the accounting firm in Vietnam and the client.

5. The foreign accounting firm and the accounting firm in Vietnam shall appoint an accountant to perform their services specified in the accounting service contract.

6. The accounting service contract, the joint venture contract and accounting service documents must be made in both Vietnamese and English languages.

7. The payment of service charges must be transferred through a credit institution operating under the law on foreign currency management of Vietnam.

Article 32. Responsibilities of the foreign accounting firm providing transboundary accounting services

1. Assign tasks to capable employees to assure service quality. Comply with regulations on prohibited acts and cases of prohibition from accounting service provision specified in Article 25 of this Decree and relevant provisions of the Law on Accounting.

2. Adhere to accounting standards and regulations of Vietnam when providing transboundary accounting services in Vietnam.

3. Pay taxes and fulfill other financial liabilities related to provision of transboundary accounting services in Vietnam as prescribed by Vietnam’s tax laws.

4. Submit biannual reports to the Ministry of Finance on execution of contracts for provision of transboundary accounting services over the last 6 months (using the specimen report provided by the Ministry of Finance).

5. Appoint a person responsible for reporting and providing explanation for Vietnamese authorities regarding accounting service contracts, accounting service documents and other issues relevant to provision of transboundary accounting services in Vietnam.

6. Send the Ministry of Finance an annual financial statement and a report on the foreign accounting firm’s compliance to regulations of law on accounting units and other law issued by the accounting service authority of its home country within 120 days from the end of the fiscal year.

7. Exercise the rights and perform the duties of accounting firms specified in this Decree; comply with provisions of the Law on Accounting and relevant laws of Vietnam.

Article 33. Responsibilities of accounting firm in Vietnam that forms a joint venture with a foreign accounting firm to provide transboundary accounting services

1. Retain every document about the accounting services provided by the joint venture and provide them for competent authorities at their request.

2. Take legal responsibility for the results of accounting services; provide explanation for competent authorities regarding such results, documents about provision of accounting services and other issues relevant to the establishment of such joint venture.

3. Submit biannual reports to the Ministry of Finance on provision of transboundary accounting services in cooperation with the foreign accounting firm over the last 6 months (using the specimen report provided by the Ministry of Finance).

4. Facilitate accounting service quality control by the Ministry of Finance.

Article 34. Application and procedures for issuance of the certificate of eligibility to provide transboundary accounting services in Vietnam to a foreign accounting firm

1. An application for issuance of the certificate of eligibility to provide transboundary accounting services in Vietnam consists of:

a) Documents proving that the foreign accounting firm is permitted to provide accounting services according to its home country’s law;

b) A document issued by the authority of the foreign accounting firm’s home country that it does not violate regulations on provision of accounting services and other laws over the last 3 years before submission of the application;

c) Copies of the Certificates of Accounting Service Registration granted by the Ministry of Finance to the foreign accounting firm’s accounting practitioners, including its legal representative;

d) Documents proving the purchase of professional liability insurance for its accounting practitioners who work in Vietnam.

2. Procedures for issuance of the certificate of eligibility to provide transboundary accounting services:

a) The foreign accounting firm (the applicant) shall submit an application specified in Clause 1 of this Article to the Ministry of Finance;

b) Within 15 days from the day on which the valid application is received, the Ministry of Finance shall consider issuing the certificate of eligibility to provide transboundary accounting services.  If the application is rejected, the Ministry of Finance shall make a written response and provide explanation.

3. The Ministry of Finance shall provide the templates of the certificate of eligibility to provide accounting services and the report on provision of transboundary accounting services in Vietnam by foreign accounting firm.

Section 5. ACCOUNTING ASSOCIATIONS

Article 35. Accounting associations

1. An accounting association is a socio-professional organization of accountants, holders of audit practitioner certificates, audit practitioners and accounting service providers.

2. An accounting association is entitled to:

a) receive refresh training for accountants and accounting practitioners;

b) participate in study, compilation, update of Vietnam’s account standards and professional ethics for accountants on the basis of relevant international standards;

c) take examinations for audit practitioner certificates according to regulations of the Ministry of Finance;

d) cooperate with the Ministry of Finance in accounting service quality inspection and control on request.

3. The Ministry of Finance shall specify the methods for reporting and inspection of activities of accounting associations specified in Clause 2 of this Article.

Chapter III

IMPLEMENTATION

Article 36. Effect

1. This Decree comes into force from January 01, 2017.

2. The Government's Decree No. 128/2004/NĐ-CP and Decree No. 129/2004/NĐ-CP are abrogated from the effective date of this Decree.

Article 37. Transition clause

1. Within 24 months from the effective date of this Decree, acting chief accountants appointed before such date must obtain chief accountant certificates in accordance with Clause 1c Article 54 of the Law on Accounting.

2. Within 24 months from the effective date of this Decree, multi-member limited liability companies providing accounting services that are established before such date must ensure that the holdings of capital contributors and accounting practitioners are conformable with this Decree and other requirements in the Law on Accounting are fulfilled to be granted the Certificate of eligibility to provide accounting services.  Provision of accounting services will be terminated if any of the requirements specified in this Decree or the Law on Accounting is not fulfilled.

3. If a state accounting unit that only has acting chief accountant according to provisions of this Decree has appointed a chief accountant before the effective date of this Decree, it is not required to dismiss such chief accountant when this Decree comes into force. The chief accountant may hold his/her position until the end of the period specified in the decision on appointment of chief accountant. When the aforementioned period expires, an acting chief accountant will be appointed in accordance with this Decree.

Article 38. Responsibility for implementation

1. The Minister of Finance shall provide guidance and organize implementation of this Decree within its authority; inspect and supervise the adherence to regulations of law on accounting works, accounting apparatus, accountants and provision of accounting services.

2. Ministries, Heads of ministerial agencies, Heads of Governmental agencies, Presidents of the People’s Councils and the People’s Committees of provinces are responsible for the implementation of this Decree./.