On January 1, 2025, Vietnam will implement significant changes to its accounting regulations, as stipulated by the latest amendment to the Accounting Law. This amendment, part of the broader push for regulatory reform, aims to simplify the documentation process for businesses operating within the country.
Under the new guidelines, accounting documents will primarily need to be recorded and reported in Vietnamese. Previously, companies had to prepare these documents bilingually, including Vietnamese and any relevant foreign language when applicable. This requirement can be cumbersome, especially for smaller businesses operating with limited resources.
The amendment states: "Trừ báo cáo tài chính, mọi tài liệu kế toán khác chỉ phải dịch ra tiếng Việt khi cơ quan Nhà nước có thẩm quyền yêu cầu," which translates to: "Except for financial statements, all other accounting documents only need to be translated to Vietnamese upon request from authorities." This marks the first major relaxation of the language requirements for accounting since the introduction of the previous laws.
The Vietnamese government, through its Ministry of Finance, recognized the burden posed by the stringent bilingual requirements. By streamlining the process, the new law aims to ease the administrative load on companies and allow for greater compliance flexibility.
Before the amendment, any accounting documentation, whether it was invoices, ledgers, or financial reports, had to be prepared and maintained both in Vietnamese and the foreign languages used within those records. Such constraints often raised costs and complicated operational procedures, particularly for foreign businesses operating in Vietnam or for those businesses engaging cross-border transactions.
With this change, businesses will now find it easier to manage their accounting practices without the dual-language demands previously enforced. They can focus more on accuracy and compliance with general accounting principles rather than the additional layer of translation.
Critically, the amendment retains the requirement for financial statements to remain bilingual. This means transparency and clarity for stakeholders, particularly investors and regulatory bodies, will continue to be prioritized within Vietnam’s financial reporting standards.
Alongside easing language requirements, the amendment facilitates the accounting process for many firms by limiting the instances when foreign language translations are necessary. Currently, translations must occur for compliance and regulatory reporting, which can be time-consuming and cost-prohibitive for smaller firms. Now, translations will only be required upon explicit request from regulatory agencies.
This adjustment could potentially improve the ease of doing business within Vietnam, aligning with broader governmental efforts to attract international investment and bolster the local economy. Such reforms signal Vietnam’s commitment to fostering a more business-friendly environment.
With the new law coming to effect at the start of 2025, businesses across the country need to prepare for this transition and align their accounting practices accordingly. It also opens discussions on the future of regulatory landscapes as Vietnam seeks to modernize its economy and create more efficient processes.
Overall, the amendment reflects broader trends within Vietnam to embrace more flexible and responsive regulatory mechanisms, allowing businesses to flourish without being hindered by bureaucratic limitations. With the new changes set to be operational soon, companies are encouraged to review their accounting practices and prepare for the upcoming requirements.
