Long-term tax planning services for enterprises: legal basis and sustainable tax governance solutions

Long-term tax planning services for enterprises are increasingly becoming an important legal and financial solution, helping enterprises not only optimize their tax obligations but also ensure sustainable legal compliance. The following article by NPLaw analyzes issues related to long-term tax planning services for enterprises.

I. Current situation regarding long-term tax planning services for enterprises

In practice, many enterprises in Vietnam still approach taxation passively, focusing only on handling tax obligations arising in each declaration period or when inspections and audits are conducted. Such an approach often causes enterprises to fall into situations of tax arrears, administrative sanctions, or failure to take advantage of tax incentives permitted by law.

In this context, long-term tax planning services for enterprises are not merely tax advisory activities but also legal risk management tools, enabling enterprises to proactively develop tax strategies aligned with their business orientation. It can be affirmed that the demand for these services is increasing significantly, especially among medium and large enterprises, FDI enterprises, and enterprises undergoing restructuring.

II. Concept of long-term tax planning services for enterprises

1. What are long-term tax planning services for enterprises?

Long-term tax planning services for enterprises refer to legal and tax advisory activities aimed at developing medium- and long-term strategies for organizing production, business operations, investment, and financial activities based on compliance with tax laws, in order to optimize the total tax obligations payable.

Tax planning does not merely focus on reasonably minimizing tax costs but also ensures that the enterprise’s financial activities and decisions are lawful and compliant with legal regulations. Establishing a tax plan often involves identifying the financial situation, analyzing available tax options, and making the most beneficial decisions to reduce tax burdens.

Therefore, in order to fully enjoy taxpayers’ rights as prescribed under Article 16 of the 2019 Law on Tax Administration, enterprises need a long-term tax plan to ensure full performance of their tax obligations. Long-term tax planning is not only a part of financial operations but also an important factor determining the sustainable development of an enterprise.

2. Should long-term tax planning services be implemented periodically?

From both legal and governance perspectives, a long-term tax plan is not a fixed document without changes. Vietnamese tax laws are frequently updated to align with practical circumstances through amended laws, decrees, and guiding circulars, especially in areas such as corporate income tax and investment incentives.

Therefore, periodic review and updating of tax plans, or revisions when major policy changes occur, are necessary requirements to ensure the legality and effectiveness of the established plan. This is consistent with the principle of legal compliance stipulated in Clause 1, Article 5 of the Law on Tax Administration 2019.

Accordingly, long-term tax planning services must be implemented and updated periodically to suit the legal context and business operations of the enterprise.

3. How do long-term tax planning services differ from short-term tax advisory services?

The core difference between long-term tax planning services and short-term tax advisory services lies in the scope and objective of the consultation.

• Short-term tax advisory services usually focus on resolving immediate issues, such as handling a tax arrears decision or explaining a specific tax inspection period.
• In contrast, long-term tax planning services for enterprises aim at comprehensively designing tax structures, capital structures, legal entity models, and cash flows over multiple years, in line with the enterprise’s development strategy. It is a preventive activity rather than merely dealing with consequences.

III. Legal regulations related to long-term tax planning services for enterprises

1. Does the law limit the advisory scope in long-term tax planning services?

Pursuant to Article 104 of the Law on Tax Administration 2019, tax procedure services (including tax advisory services) are activities performed by organizations and individuals meeting professional practice conditions to support taxpayers in tax declaration, tax payment procedures, and other tasks related to tax obligations as prescribed by law.

In other words, tax advisory services are legal and financial services provided by tax agents or legally registered consulting organizations to help enterprises and individuals comply with tax regulations. Therefore, the advisory scope must be limited to lawful solutions with genuine economic and legal substance. Long-term tax advisory services are only lawful when they do not cross the boundary into tax evasion.

2. What principles must be followed when developing a long-term tax plan?

The principles to be complied with when developing a long-term tax plan for enterprises include:

• Compliance with tax laws: All tax solutions must comply with legal regulations and must not aim at tax evasion or tax fraud (Article 5 and Article 16 of the Law on Tax Administration 2019).
• Tax optimization within the legal framework: Enterprises may only apply tax incentives, exemptions, reductions, and deductions when fully satisfying the conditions prescribed by specialized tax laws (Corporate Income Tax Law 2025, Value Added Tax Law 2024, etc.).
• Consistency with the nature and business strategy: Transaction arrangements and organizational structures must accurately reflect economic substance and avoid formal arrangements intended solely to avoid taxes.
• Transparency and explainability: Tax plans must be supported by complete and lawful records and documents to explain and justify them during tax inspections and audits (Law on Accounting 2015; Law on Tax Administration 2019).

3. What legal responsibilities do enterprises have when using long-term tax planning services?

Pursuant to applicable laws, taxpayers are responsible for the accuracy and truthfulness of tax dossiers.

The use of advisory services does not change the enterprise’s ultimate legal responsibility toward tax authorities. Therefore, enterprises cannot rely on advisory opinions to exempt themselves from liability if the tax plan violates the law.

4. Will enterprises be sanctioned if they apply a long-term tax plan contrary to legal regulations?

Enterprises will be sanctioned if they apply a long-term tax plan contrary to legal regulations, depending on the nature and severity of the violation, specifically:

• If the tax plan results in incorrect declarations or underpayment of taxes, the enterprise will be subject to tax arrears collection, sanctions, and late payment interest under Clause 3, Article 17 and the late payment calculation prescribed in Clause 2, Article 59 of the Law on Tax Administration 2019, along with administrative fines under Decree No. 125/2020/ND-CP.
• If the tax plan shows signs of tax evasion or tax fraud (creating sham transactions, concealing revenue, using unlawful invoices, etc.), the enterprise may face severe sanctions and even criminal prosecution for tax evasion under Point d, Clause 1, Article 200 of the Penal Code 2015 (amended and supplemented in 2017).

IV. Questions related to long-term tax planning services for enterprises

1. Is long-term tax planning suitable for enterprises undergoing restructuring or mergers?

Mergers, consolidations, divisions, and separations all involve complex tax obligations. Long-term tax planning during such a stage is essential to control arising tax risks.

Pursuant to the Law on Enterprise 2020, mergers, consolidations, divisions, and separations of enterprises result in the transfer of all or part of assets, rights, and obligations, including tax obligations. Accordingly, enterprises after mergers or consolidations, or newly established enterprises after division or separation, inherit the tax rights and obligations of the merged, consolidated, divided, or separated enterprises.

At the same time, under Article 68 of the Law on Tax Administration 2019, taxpayers undergoing enterprise reorganization must complete tax obligations before implementing changes in enterprise registration, except where inheritance is legally permitted.

2. What should an enterprise do if the tax authority does not accept part of the implemented long-term tax plan?

When the tax authority does not accept part of the implemented long-term tax plan, the enterprise must first provide dossiers, documents, and explanations as required by the tax authority in accordance with Clause 2, Article 17 of the Law on Tax Administration 2019.

If the enterprise does not agree with such rejection, it has the right to file a complaint against the tax administrative decision under Article 7 of the Law on Complaints 2011. If the matter is still not satisfactorily resolved, the enterprise has the right to initiate an administrative lawsuit against the tax administrative decision before the Court in accordance with Article 30 of the Law on Administrative Procedures 2015.

At the same time, the enterprise should revise its long-term tax plan to ensure compliance with the principle that transactions must reflect their true substance and must not be aimed at tax avoidance, thereby minimizing legal risks for subsequent tax periods.

3. Can an enterprise adjust its long-term tax plan when tax policies change?

An enterprise may absolutely adjust its long-term tax plan when tax policies change, because tax law requires taxpayers to fulfill their tax obligations in accordance with the legal regulations effective at the time the tax obligation arises under Article 16 of the Law on Tax Administration 2019. Taxpayers are responsible for declaring and paying taxes accurately, fully, and on time in accordance with tax laws.

At the same time, Article 5 of the Law on Tax Administration 2019 establishes the principle of tax administration based on legal compliance and risk management. Therefore, when tax policies (laws, decrees, circulars) are amended, supplemented, or newly issued, enterprises must review and adjust their long-term tax plans accordingly.

If an enterprise continues applying an outdated tax plan that is no longer compliant, it may be subject to tax arrears collection, late payment interest, and administrative fines under the Law on Tax Administration 2019 and Decree No. 125/2020/ND-CP.

4. Can a long-term tax plan help enterprises sustainably benefit from tax incentives?

A long-term tax plan helps enterprises sustainably benefit from tax incentives when it is developed and implemented in compliance with the correct conditions, eligible subjects, and applicable periods prescribed by law.

Under the Corporate Income Tax Law 2025 and its guiding documents, enterprises are only entitled to preferential tax rates, tax exemptions, and tax reductions when they fully satisfy the conditions regarding incentivized sectors, incentivized geographical areas, investment scale, and applicable duration. At the same time, enterprises must continuously monitor both the incentive period and the conditions for maintaining such incentives.

5. How should enterprises control risks when implementing a long-term tax plan?

When implementing a long-term tax plan, enterprises must proactively and systematically control tax risks based on clear and specific legal grounds, including:

• First, enterprises must ensure full compliance with obligations relating to tax declaration, tax payment, and information provision under Article 17 of the Law on Tax Administration 2019, as it serves as the direct legal basis for tax authorities to assess the taxpayer’s compliance level and risk profile.
• Second, for high-risk transactions (such as related-party transactions, restructuring, and asset transfers), enterprises must ensure that transactions accurately reflect their true economic substance, are supported by adequate dossiers and evidentiary documents, and comply with anti-tax avoidance principles in order to prevent tax authorities from rejecting tax benefits.
• Third, enterprises must establish and record complete accounting documents and tax documents in accordance with tax law regulations, ensuring the ability to provide explanations during tax inspections and audits.
• Fourth, enterprises should regularly review and update their tax plans whenever tax policies change, in line with the principle that taxpayers must perform their obligations according to the laws effective at the time the tax obligation arises under the Law on Tax Administration 2019.

V. Why should enterprises seek legal advice from NPLaw regarding long-term tax planning services?

With a team of lawyers possessing in-depth knowledge of tax and corporate law, NPLaw not only supports enterprises in establishing lawful long-term tax planning services but also accompanies enterprises throughout the implementation process and in dealings with tax authorities. The combination of legal expertise and practical governance experience enables NPLaw to provide safe, sustainable, and effective tax solutions.

The above information is provided for reference purposes only. If you require detailed advice regarding your specific case, please contact NPLaw Firm for immediate consultation.