Accounting regime for SMEs

Question: What are the new accounting regime on SMEs?

Answer: The objects governed by this Circular are small and medium-sized enterprises (including microenterprises) in all fields and all economic sectors in accordance with the law on supporting small and medium-sized enterprises (except for State enterprises and enterprises in which the State owns over 50% of charter capital, public companies, cooperatives and cooperative unions) (hereinafter collectively referred to as "Enterprise").

In particular, SMEs of such specific sectors as electricity, oil and gas, insurance, securities and so forth will apply an industry-specific accounting regime as issued or approved by the Ministry of Finance.

Circular 133 has some following key contents:

Principles for applying the accounting regime and accounting standards

Enterprises can choose to apply the Corporate Accounting Regime issued by Circular No. 200/2014/TT-BTC dated 22/12/2014 of the Ministry of Finance and its written amendments, supplements or replacements, but must notify the tax authorities in charge of their management and conduct consistent implementation in the fiscal year.

If reverting to the application of an accounting regime for small and medium-sized enterprises under Circular 133, enterprises must conduct it from the beginning of the financial year and notify the tax authorities.

In any fiscal year, if an enterprise experiences changes which take it out of the governing scope of Circular 133, it may apply Circular 133 until the end of its current financial year and must apply the appropriate Accounting Regime in accordance with the law from the next financial year.

Financial statements must be denominated in Vietnamese Dong

Circular 133 regulates if enterprises use currencies other than Vietnamese Dong as an accounting monetary unit, the legal financial statements for public disclosure and submission to the competent authorities in Viet Nam must be denominated in Vietnamese Dong. Where enterprises are subject to mandatory audit of financial statements, their financial statements submitted to the State management authorities disclosed to the public must be audited.

Where corporate financial statements are prepared in a foreign currency, they must be converted into Vietnamese Dong and upon announcement to the public and submission to the relevant State management authorities in Viet Nam, the financial statements denominated in Vietnamese Dong must be attached to the financial statements in foreign currency. At the same time, enterprises must clearly state in the Notes to the Financial Statements any impact (if any) on the Financial Statements due to the conversion from any foreign currency to Vietnamese Dong therein.

In addition, Circular 133 provides that enterprises must prepare and submit annual Financial Statements at the latest within 90 days after fiscal year end to the tax authorities, business registration agencies and statistical agencies. Particularly, enterprises in export processing zones, industrial parks and high-tech zones must also submit annual Financial Statements to the zone management board if required.

Circular 133 takes effect and applies to the financial years beginning on or after 01/01/2017, replacing the contents applying to small and medium-sized enterprises as stipulated by Decision No. 48/2006/QD-BTC dated 14/09/2006 and Circular No. 138/2011/TT-BTC dated 04/10/2011./.