-
International Financial Reporting Advisory Services
IFRS reporting advisory serivces of Grant Thornton are carried out by our dedicated team with expertise in IFRS implementation.
-
Audit Services
• Statutory audit • Review of financial statements and financial information • Agreed-upon procedures • FRAS services • Compilation of financial information • Reporting accountant • Cross-border audit • US GAAP audit
-
Audit Quality
We have various methods of monitoring our system of quality control and engagement quality, including real-time involvement of coaches and national office personnel on select audit engagements, reviews of issuer audit engagements prior to archiving by someone outside of the engagement team, and internal inspections of assurance engagements and the system of quality control.
-
Audit Approach
Audit Approach
-
Licensing services
Licensing services
-
International tax planning
Our extensive international network provides us with significant resources to meet all your expansion goals. We strive to develop commercially focused and tailored tax strategies to minimise tax exposures and maximise business efficiency.
-
Expatriate tax planning
We have a broad knowledge base and skills to assist you keep your personal income taxes to a legitimate and reasonable level, while remaining compliant with legislation. We can develop a personalised package for each key employee to take maximum advantage of the exemptions and incentives available.
-
Tax advisory
We will review the proposed business model and transactions and advise on tax implications and recommendations to optimize the tax opportunities under the local regulations and treaties which Vietnam entered into. Furthermore, we coordinate with our GT global tax team to provide a comprehensive tax advisory for the countries involved in the business model and transactions.
-
Tax compliance services
This service is designed to assist enterprises to cope with the statutory tax declaration requirements in line with the Vietnamese tax laws as well as the frequent changes and updates in tax laws.
-
Tax health check
Our Tax Health Check involves a high-level review of specific tax areas to highlight the key issues that need to be rectified in order to reduce tax risks. Through our extensive experience, we have identified key risk areas in which many enterprises are not fully compliant or often overlook potential tax planning opportunities. Our tax health check service represents a cost-effective method to proactively manage risks and reduce potential issues arising as a result of a tax inspection.
-
Transfer Pricing
Transfer pricing is a pervasive tax issue among multinational companies. In Vietnam, the tax authorities require special documentation to report related party transactions. Compliance with transfer pricing regulations is an important aspect of doing business effectively in Vietnam as failure to do so may result in significant penalties.
-
Tax due diligence
We conduct tax due diligence reviews of target companies to analyse their tax exposure and position in relation to acquisitions, mergers or consolidations. We are able to integrate this service with our Advisory Services department in order to offer a comprehensive, holistic due diligence review.
-
Customs and international trade
Our experienced professionals can help you manage customs issues more effectively through valuation planning and making use of available free trade agreements. We also assist Clients in optimising their customs procedures by making use of potential duty exemptions and efficient import-export structures. Risk mitigation activities include customs audit defense and compliance reviews.
-
M&A Transaction
We advise numerous foreign investors on efficient tax structures for their investments. Our experience allows you to consider all the options and set up a corporate structure that meets both operational and tax efficiency requirements. In short, the structure that is best for you.
-
Industrial Zones – Picking A Location For Your Business
Grant Thornton Vietnam’s one-stop services are designed to provide comprehensive support to both new and current investors who are planning to expand or restructure their business in Vietnam. Our professionals have established strong working relationships with landlords, property developers and authorities at various localities. With extensive experiences in liaison with the relevant agencies, we offer assistance including negotiation on land rental rates and efficient management of licensing process. Our customized and flexible solutions can bring benefits of cost efficient location, accelerate licensing process, and optimize tax opportunities while remaining in compliance with legislation.
-
Tax Audit Support
Tax audit support services provide comprehensive assistance to your business in Vietnam. Recent tax practices have shown the general tendency of launching routine tax audit on yearly basis. Tax authorities have been effectively using more sophisticated methods to identify target entities from across different industry sectors.
-
Business Risk Services
Business Risk Services
-
Transaction Advisory Services
Transaction Advisory Services
-
Valuation
Valuation
-
Business consulting services
Finance Management Advisory
-
Accounting services
Accounting services
-
Taxes compliance within outsourcing
Taxes compliance within outsourcing
-
Payroll, personal income tax and labor compliance
Payroll, personal income tax and labor compliance
-
Secondments/Loan staff services
Secondments/Loan staff services
-
Compilation of the financial and non-financial information
Compilation of the financial and non-financial information
-
Accounting systems review and improvement
Accounting systems review and improvement
-
Initial setting-up for accounting and taxes systems
Initial setting-up for accounting and taxes systems
-
Management accounting and analysis
Management accounting and analysis
-
Comprehensive ERP system solution
ERP software is a tool for business operations, production management, order processing and inventory in the business process. Today, ERP software for small and medium businesses has been greatly improved to help businesses manage their business better. The article below will answer all relevant information about what ERP software is and offer the most suitable ERP solution for businesses. Let's follow along!
-
Analyze Business Administration data
We believe in the value that data can bring to the success and development of every business. Our team helps design data architecture supported by tools, to support business governance and provide useful information to management.
-
Financial reporting compliance solution package
Putting financial issues at the heart, this service helps ensure that financial reports for customers comply with both the requirements of Vietnamese accounting regulations and standards (VAS) as well as reporting standards. international finance (IFRS).
-
Third-party ERP extensions
ERP is a long-term solution that requires long-term travel, not short-term. We understand that many businesses cannot deploy the entire ERP system at once due to many different reasons, instead businesses can deploy each part. Over time, these solutions can be expanded to accommodate improved business processes or can even link completely new processes across different departments.
-
Localize, deploy and rebuild the project
Quite a few ERP projects need to be implemented according to current Vietnamese requirements and regulations, but still comply with common international business requirements. These projects need some improvements and adjustments in the right direction.
-
Consulting on technology solutions
We support the selection and implementation of the most suitable solutions, ensuring business efficiency and performance. We will work closely with customers to plan, evaluate and implement the right technology investment strategies and solutions to meet the development needs of businesses.
-
Offshore company establishment service
Using the offshore company model will facilitate the owner in the process of transaction and expand overseas markets, take advantage of the tax policy with many incentives and protect the value of the family enterprise's assets.
-
Private Trust Advisory
The development of the economy with many modern financial instruments has brought many advantages and opportunities for the enterprises, but there are still certain potential risks in any type of business. So how to protect your asset value with an appropriate company structure while stay compliance with relevant regulations?
-
Our values
We have six CLEARR values that underpin our culture and are embedded in everything we do.
-
Learning & development
At Grant Thornton we believe learning and development opportunities help to unlock your potential for growth, allowing you to be at your best every day. And when you are at your best, we are the best at serving our clients
-
Global talent mobility
One of the biggest attractions of a career with Grant Thornton is the opportunity to work on cross-border projects all over the world.
-
Diversity
Diversity helps us meet the demands of a changing world. We value the fact that our people come from all walks of life and that this diversity of experience and perspective makes our organisation stronger as a result.
-
Contact us
Contact us
-
Available positions
Experienced hires
-
Available positions
Available positions
There are potential licensing and tax risk issues in the event that a representative office is treated as a permanent establishment by its activities in Vietnam, as discussed by Nghiem Xuan Hong An and Nguyen Hung Du, of Grant Thornton.
Under commercial law, the representative office (RO) of a foreign entity in Vietnam is defined as a dependent unit of the foreign entity which is established for market research purposes and to conduct trade promotion activities permitted by Vietnamese laws.
The current regulations mention that the operation of the RO is solely confined to the conduct of liaison activities, market research, preparatory or auxiliary activities, and trade and investment promotion of its parent company within the period stated in the establishment license. In addition, for operational purposes in Vietnam, the RO is permitted to perform the following activities:
- rent offices, rent and purchase equipment and facilities necessary for their operations;
- recruit Vietnamese and expatriate employees to work for the RO;
- open bank accounts in foreign currencies or Vietnamese dong at licensed banks in Vietnam and use those accounts for the RO’s operations only;
- sign off contracts for the above-mentioned activities to serve its operation (i.e. labor contracts, office lease contracts, etc.); and
- have the RO’s name stamped.
Commercial law also clarifies that the RO is not allowed to carry out the following activities:
- directly conduct profit-generating activities in Vietnam;
- conduct trade promotion activities out of the permitted scope under commercial law;
- enter into any commercial contracts, amend or supplement the commercial contracts entered into by its parent company, except the permitted cases where the chief representatives are authorized by its parent company to take these actions with a letter of authorization.
Definition of Permanent Establishment
The creation of a permanent establishment (PE) in Vietnam is determined by application of the domestic laws and the tax treaties signed between Vietnam and other countries, i.e. avoidance of double taxation agreements (DTAs).
The current Vietnamese regulations stipulate the following conditions to identify whether the foreign entity’s business activities constitute a PE in Vietnam:
- a business establishment is maintained (e.g. branches, executive offices, plants and a location in Vietnam where natural resources are exploited, or construction sites, installation or assembly works, establishments providing services, agents, and representatives, buildings, vehicle, machinery or equipment or merely a specific place without an identifiable management system, etc.);
- the business establishment must be fixed. This means that it must be established at a specified place in Vietnam and/or maintained on a permanent basis. However, the definition of “fixed” does not necessarily mean that the establishment must be located in a specific place for a specific time;
- business activities in Vietnam are partly or wholly conducted by a foreign company through this establishment.
Meanwhile, the PE definition, in most DTAs, is generally a fixed place of business through which the foreign entity carries out partly or wholly its business activities.
In this regard, it is important to note that in the event of different provisions in the PE definition provided under a DTA and the domestic laws, the provisions in the DTA take precedence over domestic regulations.
RO of Foreign Entity Regarded as PE in Vietnam
In the event that the RO carries out activities of the permitted functions of a RO according to the prevailing Vietnamese regulations, it might trigger a high licensing risk.
As a result, after a period of operating in Vietnam, if the overseas parent company of the RO would like to convert the RO into another business form, for example, an enterprise, to perform income-generating activities, the overseas parent company might encounter difficulties in obtaining the licenses to set up the new company in Vietnam from the licensing authority as its RO has history of having violated the licensing regulations in the past.
Additionally, from a tax perspective, there is a potential high PE risk in Vietnam for the foreign entity created by the RO through the activities performed out of the allowed scope in the establishment license. Consequently, the income attributed to the RO would be subject to tax in Vietnam. This results in more financial burden (i.e. tax burden) for the foreign entity carrying out business activities in Vietnam.
To provide a clearer understanding of the above issues we will discuss the following cases which we notice in practice and are confirmed by tax authorities as creating a PE through the RO’s activities:
• Official Letter 855/TCT-HTQT, dated February 28, 2019, issued by the General Department of Taxation (GDT) mentions that if the RO participates in activities related to trading business of the overseas parent company, the RO’s activities (which are assessed based on the nature of the activities) are not regarded as the preparatory and ancillary services, but partly generating income for the overseas parent company such as negotiating and signing off commercial contracts, carrying out marketing, advertising, sales promotion activities, providing after-sales services, etc. Therefore, the RO is considered a PE in Vietnam through which the overseas parent company carries out partly or wholly its business activities in Vietnam.
• Another case of the RO being defined as a PE is where the RO is involved in delivering goods from the bonded warehouse rented by its parent company in Denmark to the business partners in Vietnam, according to Official Letter No. 2652/TCT-HTQT dated June 30, 2015, also issued by the GDT. To be specific, in this case, after the Denmark company rented a bonded warehouse in Vietnam, it let its representative in Vietnam, which is the RO, be responsible for storing goods and distributing goods in the warehouse, monitoring and controlling the process of receiving and delivering goods in the warehouse per the technical requirement of the Denmark company, signing off the acknowledgment/notes on goods delivery to allow the goods to be delivered out of the warehouse and to the business partners in Vietnam.
• Zarnestservice Ltd, a company incorporated in Russia, was granted a license to establish its RO in Vietnam. This RO, on behalf of its parent company in Russia, conducts trade promotion activities such as marketing, meeting with customers, participating in the process of negotiating and concluding contracts, participates in the implementation of the signed contracts (i.e. monitoring, pushing the implementation of the contracts in Vietnam). Accordingly, it is interpreted by the GDT in official letter 2826/TCT-DNL dated June 23, 2016 that Zarnestservice Ltd carries out its business in Vietnam partly or wholly through its RO in Vietnam.
Planning Points
In order to avoid the potential licensing and tax risk in the event that a RO is treated as a PE by its activities in Vietnam, the foreign entity is not recommended to get its RO involved in the trading transactions or any phase of the trading cycle which is out of the RO’s licensed function, or any other activities generating revenues for the foreign entity in Vietnam as mentioned above.
In this regard, the personnel in charge of foreign entities and Vietnamese entities are encouraged to equip themselves with the necessary technical knowledge of domestic laws in the jurisdiction where the foreign entity carries out its business activities as well as the tax treaty, so that they can identify the cases where a PE can be created, relevant tax implications and also the possibility of applying the tax treaty for tax exemption or reduction purposes.
Nghiem Xuan Hong An is a Tax Senior Manager and Nguyen Hung Du is a Tax Partner at Grant Thornton Vietnam.
This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.