As an FDI enterprise, you are already familiar with the requirements of your foreign parent company. However, with complex domestic tax regulations and frequent changes, do you sometimes wonder whether your enterprise is fully compliant? This is not only your concern but also a common challenge shared by more than 18,000 FDI enterprises (according to the Vietnam Business White Book 2021) currently operating in Vietnam. KMC’s tax review and advisory services for FDI enterprises can help you address this issue.
Why Do FDI Enterprises Need Specialized Tax Review and Advisory Services?
Understand and Comply with Complex Tax Regulations
Vietnam’s tax system is complex, with multiple types of taxes, various tax incentives and exemptions, and regulations that may change annually. For FDI enterprises, fully and accurately understanding tax regulations has become increasingly challenging due to language barriers and differences in the application of laws compared with the foreign parent company.
Therefore, specialized tax review and advisory services are essential to help enterprises clearly understand the current regulations, ensure accurate and timely compliance, and avoid risks of tax arrears or administrative penalties.
Minimize Risks of Errors in Tax Filing
Tax filing requires a high level of accuracy. Even minor mistakes can result in serious consequences, such as heavy fines or reputational damage. Newly established FDI enterprises without experienced accountants are particularly prone to errors.
In such cases, specialized tax advisory services support your enterprise by carefully reviewing, checking, and assisting in tax filing to ensure compliance and minimize risks.
Optimize Costs and Leverage Tax-Saving Opportunities
Tax advisors not only help you comply with regulations but also identify legitimate tax-saving opportunities, such as incentives available to FDI enterprises in certain industries or regions.
Additionally, outsourcing tax advisory services can be more cost-effective than maintaining a dedicated in-house accounting team, especially when dealing with complex tax matters.
Support in Resolving Specialized Tax Issues
FDI enterprises often face unique tax challenges such as transfer pricing, cross-border corporate income tax, or import tax regulations.
Experienced tax advisors like KMC, who have worked extensively with Japanese FDI enterprises, can provide tailored solutions. We help your enterprise address these issues effectively, ensuring compliance and minimizing legal risks.
Peace of Mind to Focus on Core Business Activities
Complying with complex domestic tax regulations can consume significant time and resources for FDI enterprises. By using specialized tax review and advisory services, your company can confidently entrust all tax-related matters to professional experts. This allows you to focus resources on executing business strategies, expanding markets, and enhancing operational efficiency.
Warning Signs That Your FDI Enterprise Needs an Immediate Tax Review
You may not notice it, but tax risks can quietly arise without warning—especially related to invoices and VAT refunds. Below are critical “red flags” to watch for. If your FDI enterprise encounters any of these, consider a tax review to avoid unpleasant surprises.
Invoices “Out of Sync” with Business Activities
For example, you import electronic components, but the invoice shows sales of construction materials. Or your input and output invoices do not logically align with your industry. For FDI enterprises, this often occurs due to complex supply chains. The tax authority may treat this as an unusual sign, so you should check immediately to avoid the risk of VAT refunds being denied.
Revenue Surges but Taxes Lag Behind
If your current-period revenue suddenly triples compared to the previous period, but VAT payable is less than 1%, be cautious. Since FDI enterprises often conduct large-scale international transactions, tax liabilities should be proportionate. Otherwise, the tax authority may suspect fraud or errors. A tax review can help clarify this issue.
Frequent Changes of Legal Representative or Business Location
FDI enterprises often adjust their investment structures or business strategies, but such changes may be viewed by tax authorities as signs of tax evasion or invoice fraud risks.
If your enterprise has changed its legal representative more than twice within 12 months, or has simultaneously changed both its representative and business location, you need to ensure your tax records are “clean” before an inspection.
Errors in Tax Reports or Invoices
FDI enterprises using e-invoices often face issues such as forgetting to file invoice usage reports, submitting them late, or having voided invoices account for up to 20% of the total. This is usually due to unfamiliarity with Vietnamese regulations. In such cases, a tax review will help you promptly detect and correct errors.
Suspicious Bank Transactions
For FDI enterprises, complex international cash flows can cause misunderstandings. For example, money enters the account but is withdrawn on the same day, or transactions do not match business scale. The tax authority may consider this a sign of money laundering or tax evasion. A tax review will help you demonstrate transparency and clarity.
Tax Review and Advisory Process for FDI Enterprises at KMC
Step 1: Consultation and Scope Definition
After receiving your inquiry, we will arrange a direct meeting to discuss your specific needs. For example, you may require a tax review before an M&A transaction, a VAT compliance check, or an assessment of risks under the DTAA.
Based on this, we will propose an appropriate review scope, along with estimated timelines and costs. The objective is to focus on what truly matters to your FDI enterprise, saving time right from the start.
Step 2: Document Collection and Evaluation
We will provide detailed guidance on the documents required for the tax review of your enterprise. Typically, these include tax filings, financial statements, invoices, and accounting data. KMC will verify whether your tax declarations are accurate, check deductible transactions, and analyze tax data (CIT, VAT, and PIT for foreign experts). For FDI enterprises, we pay special attention to loans and technical support from abroad to avoid double taxation.
Step 3: Risk Analysis and In-Depth Verification
This is the most intensive part of the process. At this stage, we examine transaction patterns, interview key personnel (if necessary), and compare accounting data against current tax regulations. This enables us to detect any discrepancies, from invalid invoices to VAT refund risks, and assess potential impacts. For instance, if you are negotiating an M&A transaction, we will estimate possible tax risks arising after the deal.
Step 4: Detailed Report and Recommendations
Upon completion, KMC delivers a clear, reader-friendly report summarizing findings, assessing risk levels (low/medium/high), and providing specific solutions. Beyond numbers, we also suggest optimization measures such as applying DTAA to reduce PIT for foreign experts or expediting VAT refunds.
Step 5: Ongoing Support and Implementation
The process does not end with the report. We continue to accompany you by assisting in filing adjustments with tax authorities, responding to inquiries, and monitoring outcomes. If needed, we also provide internal training to strengthen your team’s confidence in tax compliance.
What Makes KMC’s Tax Review and Advisory Services for FDI Enterprises Different?
Specialized for FDI
KMC has extensive experience in providing tax review and advisory services for FDI enterprises, particularly Japanese companies. Unlike generic services, KMC customizes tax reviews specifically for your enterprise, ensuring alignment with the unique needs of FDI operations. For example, we assess the applicability of bilateral agreements to avoid double taxation and optimize profits. The result is significant savings while remaining fully compliant with Vietnamese tax authorities.
A Team with Hands-On Experience
KMC’s team consists of seasoned tax experts with many years of practical experience. For instance, Ms. Tran Mai Tuong Vy has nearly 25 years of experience working with international accounting firms, especially those involving Japanese-invested enterprises. With such expertise, we are confident in delivering professional tax review services and effectively resolving any arising issues.
