In the modern business market, transparency is a main factor in building trust. For public companies, the disclosure of financial information, particularly tax-related information, holds critical importance for investors. Such clarity not only enables investors to accurately assess operational efficiency but also serves as a measure of corporate responsibility and legal compliance. To help enterprises fulfill such obligations fully and accurately, NPLaw summarizes and clarifies the regulations governing tax disclosure for investors.

I. Current situation regarding tax disclosure for investors

Vietnam’s securities market is rapidly evolving, accompanied by increasing demands in both quantity and quality regarding tax disclosure requirements for investors. At present, the state of tax disclosure among listed enterprises varies significantly.

Some large enterprises with strong governance frameworks disclose tax information in a comprehensive and detailed manner within their Financial Statements (FS) and Annual Reports (AR), allowing investors to easily evaluate post-tax performance and risk exposure.

However, many enterprises still disclose only the minimum data required by templates (such as current corporate income tax expense or deferred tax expense), while omitting detailed explanations regarding applicable tax policies, major permanent or temporary differences between accounting profit and taxable income, or issues related to tax incentives and exemptions. Such lack of transparency makes it difficult for investors to analyze profit quality and exposes both companies and shareholders to compliance risks.

In short, enhancing the completeness and transparency of tax disclosure for investors is an urgent requirement to foster a sustainable capital market.

II. Legal provisions on tax disclosure for investors

To ensure the accuracy and fairness of financial matters, particularly Corporate Income Tax (CIT), public companies must thoroughly understand the legal framework governing disclosure obligations. The following sections outline the key legal provisions related to tax disclosure for investors, encompassing both accounting standards and securities market regulations.

1. What is tax disclosure for investors?

Tax disclosure for investors refers to enterprises (especially public or listed companies) publicly, fully, and promptly providing information concerning tax obligations, tax policies, tax expenses, and factors affecting their effective tax rates to shareholders and potential investors. The objective is to ensure transparency, allowing investors to accurately assess the enterprise’s financial position and legal compliance risks.

2. What obligations do enterprises have regarding tax disclosure for investors?

Enterprises are required to comply with the disclosure obligations set out in the Law on Securities, its guiding decrees, and the applicable accounting standards (such as Vietnamese Accounting Standards – VAS, and International Financial Reporting Standards – IFRS, if applicable). Specifically, enterprises must:

  • Prepare financial statements in accordance with regulations and provide detailed explanations on corporate income tax;
  • Publish annual reports and corporate governance reports, which must address main tax policies and risks;
  • Disclose periodic and ad hoc information as required by the State Securities Commission and the relevant Stock Exchanges.

3. What tax information must be disclosed to investors?

Enterprises are required to disclose and explain in their financial statements the following tax-related information:

  • Current and deferred income tax expenses recognized during the period;
  • Explanation between income tax expense and accounting profit before tax (i.e., the difference between nominal and effective tax rates);
  • Deferred tax assets and liabilities;
  • Unused tax losses and unutilized tax incentives;
  • Changes in tax policies or tax rates affecting deferred tax assets/liabilities.

4. What are the standard steps for enterprises to disclose tax information to investors?

The standard process typically includes the following steps:

  • Preparation and review of financial statements: The accounting/finance department calculates tax amounts and prepares the financial statements, including tax-related disclosures under Corporate Income Tax.
  • Audit: Financial statements must be independently audited to verify the accuracy and reliability of tax data.
  • Approval by the Board of Directors/Executive Board: After the audit, financial statements are approved by the Board of Directors or General Director.
  • Disclosure: The enterprise submits financial statements (with tax notes) and related reports to the State Securities Commission and Stock Exchange, and publishes them on its website within the prescribed time limits.

Timely disclosure is crucial to avoid administrative sanctions and ensure investor confidence.

III. Questions regarding tax disclosure for investors

1. Are enterprises subject to administrative sanctions for late disclosure of tax information?

The delay in information disclosure, including tax-related information in periodic reports (Financial Statements and Annual Reports), constitutes an administrative violation under Clause 1, Article 8 of Decree No. 156/2020/NĐ-CP on administrative sanctions in the securities sector.

Specifically, failure to disclose information is deemed an administrative violation in the field of securities and the securities market. Enterprises may be subject to monetary fines in accordance with the provisions of this Decree on administrative sanctions in the securities sector.

2. Through what means must enterprises disclose tax information to investors?

Tax-related information must be disclosed primarily through the following means:

  • The information disclosure systems of the State Securities Commission and Stock Exchanges;
  • The enterprise’s official website;
  • Mass media means (in some cases for ad hoc events).

3. Which types of taxes must be included in tax disclosure for investors?

Public companies must primarily focus on Corporate Income Tax and its components when disclosing tax information. Specifically, enterprises must clearly disclose current and deferred tax expenses, along with explanations of differences between accounting profit before tax and taxable income.

The main legal bases are Vietnamese Accounting Standard No. 17 – Income Taxes, and Circular No. 200/2014/TT-BTC (or Circular No. 133/2016/TT-BTC) on corporate accounting regimes, particularly provisions on the presentation of information in audited financial statements and notes to financial statements.

4. Does tax disclosure for investors require confirmation from the tax authority?

Under Clause 1, Article 70 of Circular No. 80/2021/TT-BTC, tax information disclosed in financial statements must be certified by an independent auditing organization. Enterprises are not required to obtain confirmation directly from the tax authority for disclosure purposes, although the figures must be determined in accordance with tax administration regulations.

5. Do contractors have the right to file complaints if an enterprise fails to properly disclose tax information to investors?

Contractors (suppliers of goods or services) generally do not have standing to complain about an enterprise’s failure to disclose tax information to investors. Such complaints or denunciations are within the authority of shareholders, investors, or State authorities (the State Securities Commission and Stock Exchanges), as well as investor protection organizations.

Contractors may only file complaints relating to tax obligations that directly affect them (e.g., incorrect tax withholding). Hence, shareholders and investors are the principal parties entitled to demand tax transparency.

IV. Legal consultancy services on tax disclosure for investors

Complying with regulations on tax disclosure for investors is a complex task that requires close coordination between accounting, legal, and corporate governance departments. Errors or omissions may lead to severe administrative sanctions and undermine market credibility.

To help enterprises ensure full and accurate compliance, NPLaw offers professional legal consultancy services, including:

  • Reviewing and advising on the completeness and accuracy of tax disclosures in financial statements and annual reports;
  • Advising on procedures and duration for disclosure in accordance with the Law on Securities;
  • Assisting in the preparation of records and legal documents related to the disclosure process and compliance verification.

Let NPLaw accompany your enterprise in building transparency and reputation in the capital market.