Regulations on tax record retention that enterprises need to know

In the course of production and business operations, retaining tax records is not only a mandatory requirement under applicable laws but also an important tool that enables enterprises to manage tax obligations, control legal risks, and protect their lawful rights and interests during inspections and tax audits conducted by tax authorities. However, in practice, many enterprises still lack a comprehensive understanding of the scope of records required to be retained, applicable retention periods, and the legal liabilities that may arise from non-compliance.

I. Current situation relating to tax record retention for enterprises

In current tax administration practice, tax record retention for enterprises still reveals a number of limitations that entail significant legal risks:

• Insufficient awareness: Many enterprises do not regard tax record retention as a mandatory obligation and often confuse the retention of accounting documents with the retention of tax records.
• Unsystematic retention: Records are fragmented, lack proper classification, and are not synchronized between physical and electronic versions, creating difficulties during inspections and audits.
• Non-compliance with retention periods: Enterprises are often unaware of statutory retention periods, resulting in destruction or loss of records while retention obligations remain in force.
• Unclear allocation of responsibilities: Internal responsibility for tax record retention is often not clearly assigned.

II. Definition of tax record retention for enterprises

1. What is tax record retention for enterprises?

Tax record retention for enterprises refers to a process whereby an enterprise collects, organizes, preserves, and maintains complete records, documents, and supporting materials relating to tax determination, tax declaration, tax payment, and tax finalization within the statutory retention period in order to facilitate tax administration and inspection activities by competent authorities, including the following documents:

• Tax registration dossiers and tax identification number notifications;
• Tax returns of all categories, supplementary declarations, and adjustment dossiers;
• Invoices, accounting vouchers, and commercial contracts serving as the basis for determining tax obligations;
• Accounting books, financial statements, and tax finalization dossiers;
• Documents relating to tax exemptions, reductions, refunds, and tax incentives;
• Working minutes, explanatory submissions, and conclusions arising from tax inspections or audits (if any).

Accordingly, taxpayers are obligated to retain complete, accurate, and secure tax records to demonstrate lawful compliance with tax obligations. Such retention is not merely procedural but constitutes an important legal basis for enterprises to protect their lawful rights and interests in the cases of tax inspections, audits, complaints, or tax-related disputes.

2. How does tax record retention help enterprises manage tax risks?

Maintaining complete, systematic, and timely tax records enables enterprises to manage tax risks effectively through the following aspects:

• Demonstrating the legality of tax obligations: Tax records serve as supporting evidence allowing enterprises to explain declared, paid, and deductible tax amounts during inspections and audits.
• Reducing exposure to tax reassessment and penalties: Proper retention of invoices, vouchers, and accounting books minimizes the risk of deemed tax assessments, tax arrears, and administrative sanctions due to insufficient evidence supporting deductible expenses.
• Facilitating early detection and correction of errors: Systematically retained tax records enable enterprises to review and reconcile data promptly and make lawful adjustments to declarations where necessary.
• Protecting lawful rights and interests: In the cases of complaints, disputes, or administrative proceedings relating to taxation, retained records constitute an important legal basis for protecting the enterprise’s interests before competent authorities.

III. Legal regulations relating to tax record retention for enterprises

1. Is tax record retention mandatory for all enterprises?

Clauses 1, 3, and 5 of Article 41 of the Accounting Law 2015 stipulate that all accounting entities (including enterprises) must preserve and retain accounting documents completely and securely for statutory periods, and the legal representative takes responsibility for organizing such retention. Since tax records are formed based on accounting materials (vouchers, accounting books, financial statements, and tax finalization dossiers), the obligation to retain accounting records simultaneously constitutes an obligation to retain tax records. 

Additionally, Clause 13, Article 17 of the Law on Tax Administration 2019 imposes tax record retention obligations in specific circumstances (notably transfer pricing documents), confirming that tax record retention is a mandatory requirement in tax administration.

Important notes:

• The retention obligation applies to all enterprises, including small enterprises, newly established enterprises, and enterprises regardless of whether tax liabilities arise.
• Enterprises failing to retain tax records properly may take legal risks during tax inspections and audits and may be subject to legal sanctions.

2. What documents are included in an enterprise’s tax records?

Enterprise tax records consist of accounting and tax documents generated during business operations and used to determine tax liabilities, file tax declarations, make tax payments, finalize taxes, and provide explanations to tax authorities. Depending on operational characteristics, enterprises should retain the following main categories of records:

- Invoices and transaction documents

• Value Added Tax (VAT) invoices: Including both input and output invoices prepared and managed in accordance with regulations on electronic invoices under Circular No. 32/2025/TT-BTC.
• Payment documents: Receipts, payment vouchers, payment orders, and bank statements; transactions valued at 20 million VND or more must generally be supported by non-cash payment evidence for deduction and tax expense purposes.
• Goods receipt notes and delivery notes: Documents evidencing inventory movements and serving as the basis for cost determination and inventory management.

- Accounting books: general books and detailed accounting books tracking receivables, payables, inventories, fixed assets, and other accounting subjects.

- Tax declarations and reports

• VAT returns filed monthly or quarterly;
• Corporate Income Tax returns, including provisional quarterly filings and annual finalization;
• Personal Income Tax declarations and annual finalization;
• Annual financial statements, including balance sheets, income statements, cash flow statements, and explanatory notes.

Other supporting records: 

• Commercial contracts, including contracts for goods sales, service provision, lease arrangements, construction, and related transactions;
• Reconciliation and debt confirmation records;
• Employment and payroll records, including labour contracts, payroll schedules, personal income tax withholding documents, and social insurance records.

3. What is the statutory retention period for tax records?

Pursuant to Clause 5 Article 41 of the Accounting Law 2015:

• At least 05 years: Applicable to accounting records serving management and operational purposes and accounting documents not directly used for bookkeeping and preparation of financial statements.
• At least 10 years: Applicable to important tax records such as invoices, payment documents, tax returns, tax finalization dossiers, accounting records directly used for bookkeeping, accounting books, and annual financial statements.
• Permanent retention: Applicable to accounting materials of historical significance, major fixed asset documentation, investment finalization records, and important legal documents of the enterprise (such as enterprise registration certificates).

4. Who takes primary responsibility for retaining enterprise tax records?

Clause 4 Article 41 of the Accounting Law 2015 provides that the legal representative of the accounting entity is responsible for organizing the preservation and retention of accounting materials. Since tax records are formed from accounting records and tax declarations, responsibility for retaining tax records falls directly upon the legal representative.

Allocation of responsibility within the enterprise:

• The legal representative may assign or delegate tax record retention duties to the accounting department, finance department, or relevant personnel.
• However, such delegation does not alter ultimate legal responsibility; the legal representative remains legally accountable if the enterprise fails to comply with tax record retention obligations.

Therefore, the legal representative remains the principal and highest responsible person for organizing enterprise tax record retention. Internal delegation serves administrative purposes only and does not exempt legal liability where violations occur.

IV. Questions relating to tax record retention for enterprises

1. In what forms may enterprises retain tax records?

• Physical (paper) retention: Tax records are printed, compiled into files, and stored at the enterprise’s archive facility or another lawful storage location. Such retention must ensure that records are not lost, torn, damaged, and remain readily accessible throughout the statutory retention period.
• Electronic retention: Tax records are stored in electronic data form, including electronic invoices, electronic tax declarations, and electronic accounting vouchers.
• Combined physical and electronic retention: Enterprises may simultaneously retain tax records in both paper and electronic forms to enhance security and facilitate management and retrieval, particularly for important records or those having significant legal value.

2. How should an enterprise handle cases where tax records are lost, misplaced, or damaged?

Where tax records are lost, misplaced, or damaged, enterprises are required to implement remedial measures and take legal responsibility in accordance with applicable regulations.

- First, regarding mandatory remedial measures: Pursuant to Clause 2, Article 41 of the Accounting Law 2015 (guided by Articles 6 and 7 of Decree No. 174/2016/ND-CP), enterprises must:

• Prepare a written record confirming the loss, misplacement, or damage of records;
• Attach copies of available documents (if any) or obtain confirmation from relevant parties;
• Conduct inventory, classification, and restoration of lost or damaged accounting and tax records to the extent possible;
• Provide explanations to tax authorities upon request.

- Second, regarding administrative sanctions: Pursuant to Clause 2, Article 15 of Decree No. 41/2018/ND-CP, acts involving unsafe preservation or retention of accounting records resulting in damage or loss during the retention period are subject to:

• A fine ranging from 5,000,000 VND to 10,000,000 VND for individuals;
• For enterprises (organizations), the fine is doubled, ranging from 10,000,000 VND to 20,000,000 VND under Clause 2, Article 6 of Decree No. 41/2018/ND-CP (as amended by Decree No. 102/2021/ND-CP).

3. How are tax records handled when an enterprise is dissolved or ceases operations?

Where an enterprise is dissolved or terminates operations, tax records must continue to be preserved and retained in accordance with law and may not be arbitrarily destroyed.

The handling of tax records in cases of dissolution or cessation of operations includes:

• Completion of tax obligations prior to dissolution: An enterprise may only be dissolved after completing tax finalization procedures and obtaining confirmation from tax authorities that no outstanding tax obligations remain. Tax records generated throughout business operations must be fully compiled for tax finalization purposes.
• Continued retention after cessation of operations: Even after business operations have ceased, tax records must continue to be retained for the statutory period prescribed under Article 41 of the Accounting Law 2015 (05 years, 10 years, or permanently depending on record type).
• Identification of the responsible party: The legal representative of the enterprise prior to dissolution, or any organization or individual assigned responsibility under the dissolution decision, remains responsible for preserving and retaining tax records.
• Transfer of records where obligations are succeeded: If dissolution occurs due to merger, consolidation, division, separation, or conversion of enterprise type, tax records shall be transferred to the successor enterprise, which continues to fulfill retention obligations in accordance with law.

4. May an enterprise engage a third party to retain tax records?

Enterprises may engage third parties to perform tax record retention services; however, legal responsibility cannot be transferred.

Current laws do not prohibit enterprises from engaging external organizations or individuals (such as archival service providers, accounting service providers, or data digitization service providers) to preserve and retain accounting and tax records. Nevertheless, under Clause 4, Article 41 of the Accounting Law 2015, the legal representative remains responsible for organizing the preservation and retention of accounting records, including tax records.

Conditions when engaging a third party for tax record retention:

• A clear service agreement must be executed, specifying scope, retention period, confidentiality obligations, and preservation responsibilities;
• The third party must satisfy requirements concerning security, confidentiality, fire prevention, and protection against loss or damage;
• The enterprise must ensure the ability to retrieve and provide records promptly when requested by tax authorities.

5. What are the consequences if an enterprise fails to comply with regulations on tax record retention?

If an enterprise fails to comply, or improperly complies, with tax record retention regulations, it may be subject to administrative sanctions and exposed to tax-related legal risks depending on the nature and severity of the violation.

- First, administrative sanctions relating to accounting and record retention

Pursuant to Article 15 of Decree No. 41/2018/ND-CP, enterprises may be sanctioned for acts including:

• Failure to retain accounting records completely;
• Unsafe preservation resulting in damage or loss of accounting records;
• Failure to inventory, classify, or restore lost or destroyed accounting records;
• Destruction of accounting records before expiry of the statutory retention period.

For enterprises (organizations), fines may reach up to 20,000,000 VND, as fines applicable to organizations are double those imposed on individuals.

- Second, consequences in tax administration

Failure to retain complete tax records may result in:

• Insufficient grounds to provide explanations during tax inspections and audits;
• Disallowance of deductible expenses, tax deductions, tax refunds, or tax incentives;
• Tax reassessment, late payment interest, and administrative tax sanctions.

- Third, responsibility of enterprise management

Pursuant to Clause 4, Article 41 of the Accounting Law 2015, the legal representative is responsible for organizing record retention. In cases of serious violations, management personnel may incur personal liability under applicable laws.

V. Why you should seek legal advice from NPLaw regarding tax record retention for enterprises

During the management and retention of tax records, particularly where risks relating to record loss, errors, or interactions with tax authorities arise, obtaining timely legal advice from NPLaw may assist enterprises in:

• Clarifying obligations concerning tax record retention, retention periods, and managerial responsibilities in accordance with tax and accounting laws;
• Reviewing and assessing the completeness and validity of tax records to reduce exposure to deemed tax assessments, tax reassessment, and administrative sanctions;
• Advising on handling measures where tax records are lost, misplaced, damaged, or where enterprises undergo dissolution or cessation of operations;
• Supporting enterprises in communications and explanations provided to tax authorities during tax inspections and audits;
• Advising on the establishment of systematic and legally compliant tax record retention procedures to minimize long-term legal risks.

The information above is provided for reference purposes only. Should you require detailed advice for a specific situation, please contact NPLaw Firm for timely and accurate assistance.