Practical experience in corporate income tax finalization to effectively minimize tax reassessment risks

In the context where tax authorities are increasingly tightening tax inspection and audit activities, practical experience in corporate income tax finalization plays a vital role in helping enterprises proactively review financial data, identify deductible expenses, and prepare complete documents in compliance with legal regulations, thereby minimizing the risk of tax reassessment and administrative tax sanctions. 

I. Current situation of using tax consulting services for corporate income tax finalization

As tax regulations become increasingly stringent and tax inspection and audit activities continue to intensify, many enterprises are seeking professional tax consulting services to support their corporate income tax finalization process.

It reflects the growing demand for ensuring the accuracy of accounting and tax data, while also demonstrating the increasing compliance pressure imposed on enterprises under the current tax regulatory framework.

II. Concept of practical experience in corporate income tax finalization

1. What is practical experience in corporate income tax finalization?

Practical experience in corporate income tax finalization refers to the combination of knowledge, skills, and practical methodologies that assist enterprises in compiling, reviewing, and reconciling accounting and tax data for the preparation of corporate income tax finalization dossiers in accordance with legal requirements.

Such experience includes determining deductible expenses under tax regulations, verifying the validity and legality of invoices and supporting documents, reconciling revenue and expenses between accounting records and tax declarations, as well as preparing comprehensive explanatory documents for submission during tax inspections and audits.

Proper application of corporate income tax finalization enables enterprises to minimize errors, reduce the risk of tax reassessment, and ensure the transparency and accuracy of financial statements.

2. Why should enterprises conduct a tax review before corporate income tax finalization?

Enterprises should conduct a comprehensive tax review before corporate income tax finalization to ensure that accounting and tax data are accurate, complete, and consistent with current legal regulations.

Under tax laws, enterprises are obligated to accurately and truthfully declare revenues, expenses, and tax liabilities. However, practical accounting processes may still lead to errors, such as unrecorded revenue, non-deductible expenses, or discrepancies between accounting books and tax declarations. Conducting a review before finalization allows enterprises to:

• Detect and promptly rectify errors in accounting and tax data;
• Standardize documents and supporting records for tax finalization purposes;
• Minimize the risk of tax reassessment and administrative sanctions;
• Enhance the transparency and reliability of financial statements.

Accordingly, conducting a tax review prior to finalization constitutes an important step in enabling enterprises to proactively manage risks and comply with tax regulations.

3. What main matters should be understood when conducting CIT finalization?

When implementing corporate income tax (CIT) finalization procedures, enterprises must thoroughly understand the main requirements prescribed under current tax legislation to ensure accurate, complete, and lawful tax declarations. Specifically, the principal matters include:

• Determination of taxable revenue: Revenue generated from the production and trading of goods and services, as well as other taxable income as prescribed by tax laws.
• Determination of deductible and non-deductible expenses: Based on the requirements for reasonable and legitimate expenses supported by valid invoices and documents and incurred for business operations.
• Determination of taxable income and assessable income: Following adjustments to revenues, expenses, and other income in accordance with legal requirements.
• Application of CIT rates: Based on the type of enterprise and business sector in accordance with prevailing tax regulations.
• Loss carry-forward and tax incentives (if any): Implemented in accordance with statutory deadlines and conditions governing loss carry-forward and tax incentives.
• Reconciliation of accounting records and tax declarations: Consistency among accounting books, financial statements, and tax filing dossiers.

III. Legal regulations related to corporate income tax finalization experience

1. Deductible expenses for corporate income tax purposes

Pursuant to Article 9 of Decree No. 320/2025/ND-CP, expenses may be treated as deductible expenses when determining taxable income for corporate income tax purposes if they satisfy all of the following conditions: (i) they are actually incurred in connection with production and business activities; (ii) they are supported by lawful invoices and documents; and (iii) non-cash payment evidence is available for transactions valued at 5 million VND or more as prescribed by law. Specifically, deductible expenses include:

• Expenses directly serving the enterprise’s production and business activities, including certain research and development expenditures;
• Research and development (R&D) expenses eligible for additional deduction, provided that the additional deductible amount does not exceed 200% of actual incurred expenses;
• Employee training and professional development expenses, as well as vocational education expenses in accordance with internal corporate policies;
• Lawful sponsorship expenditures for education, healthcare, culture, scientific research, digital transformation, disaster and epidemic relief, and beneficiaries of social welfare policies;
• Expenditures related to disease prevention and control, national security, and national defense activities as prescribed by law;
• Losses resulting from natural disasters, epidemics, or force majeure that are not compensated;
• Expenses associated with innovation activities, digital transformation initiatives, and greenhouse gas emission reduction efforts;
• Certain other specific expenses incurred for business operations, including market research expenses, unsuccessful bidding expenses, and expenses relating to the destruction of goods, assets, or scrap materials as prescribed by law.

2. What documents are included in a corporate income tax finalization dossier?

Pursuant to Clauses 1 and 3, Article 12 of the Law on Tax Administration 2025, taxpayers are responsible for preparing accurate, truthful, and complete tax declarations and providing relevant information and documents upon request by tax authorities. Accordingly, a corporate income tax finalization dossier includes:

• Corporate income tax finalization return (Form No. 03/CIT): The prescribed form used by enterprises to declare taxable income and determine tax payable or refundable during the tax period.
• Balance sheet: It reflects the enterprise’s assets and capital sources at the end of the accounting period.
• Statement of business results: It presents revenue, expenses, and profit generated during the tax period.
• Accounting records: It includes general ledgers, subsidiary ledgers, and accounting vouchers relating to recorded economic transactions.
• Tax payment documents: It includes documents evidencing provisional CIT payments made during the year and taxes actually remitted to the State budget.
• Documents supporting deductible and non-deductible expenses: It consists of records and evidence demonstrating the legality and validity of expenses used in determining CIT taxable income in accordance with tax regulations.

3. Deadline for submission of corporate income tax finalization dossiers

Pursuant to Clause 1, Article 12 of the Law on Tax Administration 2025, taxpayers are obligated to file tax declarations and tax dossiers within statutory deadlines and independently determine their tax liabilities for the relevant tax period. For corporate income tax, the deadline for submission of finalization dossiers is as follows:

• No later than the last day of the third month following the end of the calendar year or fiscal year for enterprises applying an annual tax period.
• In cases where an enterprise terminates operations, converts its legal form, undergoes dissolution, or enters bankruptcy proceedings, the finalization dossier must be submitted within 45 days from the occurrence of the relevant event as prescribed by law.

Furthermore, under Clause 4, Article 12 of the Law on Tax Administration 2025, taxpayers may be granted an extension for filing tax declarations in cases of force majeure in accordance with statutory provisions.

4. How does the law regulate loss carry-forward in corporate income tax finalization?

The loss carry-forward mechanism in corporate income tax (CIT) finalization is regulated to ensure the accurate reflection of an enterprise’s business performance while complying with tax regulations.

Pursuant to Clause 1, Article 12 of the Law on Tax Administration 2025, taxpayers are required to declare tax information truthfully, accurately, and completely, including the determination of taxable income after offsetting losses in accordance with applicable laws. Specifically, the principles governing loss carry-forward in CIT finalization are as follows:

• Enterprises may continuously carry forward losses to offset taxable income in subsequent years after completing tax finalization for the year in which the losses arise;
• Loss carry-forward must be implemented in accordance with the period and conditions prescribed under corporate income tax legislation and must reflect actual losses incurred;
• Enterprises must separately identify and monitor losses incurred in each year to ensure transparency and provide supporting evidence during tax finalization declarations;
• Loss carry-forward may only be applied where accounting and tax data have been accurately and fully declared and supported by valid documents.

IV. Questions regarding practical experience in corporate income tax finalization

1. What common errors do enterprises frequently encounter during corporate income tax finalization?

Pursuant to the tax declaration principle stipulated in Clause 1, Article 12 of the Law on Tax Administration 2025, taxpayers are responsible for preparing truthful, accurate, and complete tax dossiers. However, in practice, enterprises commonly encounter the following errors:

• Errors in determining taxable revenue: Underreporting revenue, recognizing revenue in an incorrect accounting period, or failing to fully record revenue generated;
• Errors relating to deductible expenses: Recording expenses that do not satisfy statutory conditions or lack valid invoices and supporting documents;
• Discrepancies between accounting records and tax declarations: Accounting figures do not correspond with figures reported in tax filings;
• Errors in declaring value-added tax (VAT) and corporate income tax (CIT): Directly affecting the amount of tax payable;
• Failure to properly monitor loss carry-forwards and tax incentives: Resulting in overlooked entitlements or incorrect tax declarations.

2. How will an enterprise be fined if it submits its tax finalization dossier late?

Pursuant to Clause 1, Article 12 of the Law on Tax Administration 2025, taxpayers are obligated to submit tax declaration dossiers fully, truthfully, and within the prescribed statutory deadlines. In cases where an enterprise submits its corporate income tax finalization dossier late, penalties shall be imposed in accordance with Article 13 of Decree No. 125/2020/ND-CP as follows:

• Warning sanctions: Applicable where the dossier is submitted from 01 to 05 days late and mitigating circumstances exist;
• Monetary fine ranging from 2,000,000 VND to 5,000,000 VND: Applicable to late submission from 01 to 30 days;
• Monetary fine ranging from 5,000,000 VND to 8,000,000 VND: Applicable to late submission from 31 to 60 days;
• Monetary fine ranging from 8,000,000 VND to 15,000,000 VND: Applicable to late submission from 61 to 90 days, or failure to submit a dossier where no tax liability arises;
• Monetary fine ranging from 15,000,000 VND to 25,000,000 VND: Applicable where the dossier is submitted more than 90 days late and tax payable arises (provided that the tax amount has been paid before the commencement of an inspection or audit).

In addition, enterprises may be subject to remedial measures, including:

• Mandatory payment of late payment interest and outstanding tax amounts (where tax obligations arise);
• Mandatory submission of supplementary tax dossiers and relevant appendices.

3. When is an enterprise required to submit a supplementary tax finalization declaration?

Pursuant to Clause 5, Article 12 of the Law on Tax Administration 2025, taxpayers are entitled to submit supplementary tax declarations upon discovering errors in previously submitted tax dossiers, provided that such amendments are made within five (05) years from the expiration date for filing the tax dossier relating to the affected tax period and satisfy statutory requirements.

An enterprise should submit a supplementary tax finalization declaration in the following typical circumstances:

• Discovery of errors relating to revenue, expenses, or taxable income that affect the amount of tax payable;
• Understatement or incorrect declaration of deductible or non-deductible expenses affecting the corporate income tax finalization result;
• Discrepancies between accounting records and tax filing dossiers;
• Omission or incorrect declaration of tax incentives or loss carry-forwards;
• Adjustments required under conclusions issued by tax authorities or competent authorities following inspections or audits.

4. Should enterprises engage professional tax consulting firms to support corporate income tax finalization?

Engaging a professional tax consulting firm to assist with corporate income tax finalization is a solution chosen by many enterprises, particularly medium-sized and large enterprises or those maintaining complex accounting systems.

From a practical perspective, tax consulting firms employ accountants and tax specialists with extensive knowledge of tax regulations and tax finalization procedures, thereby helping enterprises reduce declaration errors and accurately determine deductible expenses. It is consistent with the taxpayer’s obligation to make accurate, truthful, and complete tax declarations under Clause 1, Article 12 of the Law on Tax Administration 2025.

Benefits of engaging professional tax consulting services include:

• Assistance in reviewing accounting records and identifying errors before tax finalization;
• Proper determination of deductible expenses and optimization of tax obligations within the framework of applicable laws;
• Reduction of risks relating to tax penalties, reassessments, or tax imposition during tax inspections;
• Saving time and reducing workload for the enterprise’s internal accounting department;
• Assistance in preparing explanations and supporting documentation during tax inspections and audits.

Note: The enterprise remains ultimately responsible for the accuracy and completeness of its tax dossiers, even where a tax consulting firm has been engaged to perform the work.

V. Why should you seek legal advice from NPLaw regarding corporate income tax finalization experience?

Enterprises conducting corporate income tax finalization frequently face various risks relating to tax declarations, deductible expenses, and supporting documentation. Utilizing services provided by NPLaw helps ensure compliance with the requirements of the Law on Tax Administration 2025 regarding truthful and accurate tax declarations.

NPLaw assists enterprises in reviewing accounting records, determining legitimate deductible expenses, rectifying errors, and providing advice on supplementary tax declarations. At the same time, NPLaw helps enterprises minimize the risk of tax reassessment or administrative penalties during inspections conducted by tax authorities.

The information provided above is for reference purposes only. Should you require detailed advice regarding your specific circumstances, please contact NPLaw for immediate legal consultation.