I. INTRODUCTION – AN AUDIT IS NOT YOUR ENEMY

A tax audit is a normal part of state administration. But for a business, it may:

• Create pressure
• Impact staff morale
• Affect reputation
• Create major financial risk

Common mistakes

1. Panic
2. Hide information
3. Provide more than requested
4. Argue emotionally

II. THE TAX AUDIT PROCESS IN 2026

Typically 6 steps:

1) Issuing the audit decision

• Official written decision
• Clearly states: scope, period, and audit team members

The business may: request the decision and verify timelines.

2) Announcing the decision

• The audit team works at the business premises
• An announcement record is made

Best practice: appoint an official focal point (CFO/Chief Accountant); avoid multiple people answering spontaneously.

3) Requesting documents

Typically includes: financial statements, general ledger, invoices, contracts, bank statements…

4) Meetings & reconciliation

The team may: reconcile revenue vs invoices, check input VAT, compare profit margins to industry norms, and analyze anomalies.

5) Draft minutes

The business may: explain, supplement documents, and refuse to sign if content is unclear.

6) Conclusion & handling decision

May include: back taxes, 20% penalty on underpaid tax, and late payment interest of 0.03%/day.

III. THE AUDIT TEAM’S AUTHORITY

They may

• Request documents within scope
• Reconcile and compare data
• Prepare minutes and records

They should not

• Request documents outside the decision scope
• Retain originals without proper minutes
• Work outside agreed hours without consent

IV. AUDIT DURATION

• Typical duration: 30 working days (may be extended)
• Scope period: often the most recent 3–5 years

V. FINANCIAL RISKS DURING AN AUDIT

Example: A business with revenue of VND 200B/year and 5% margin. The audit disallows VND 4B of expenses:

• CIT 20% = VND 800M
• Penalty 20% = VND 160M
• Late payment for 2 years ≈ VND 175M

Total ≈ VND 1.135B

VI. HOW TO RESPOND PROFESSIONALLY

1) Appoint a single focal point

• CFO or Chief Accountant
• Do not let staff answer freely

2) Prepare a dedicated working room

• Complete documentation
• Printer & copying available
• Avoid exposing unrelated data

3) Work in writing

• All requests should be in writing
• All explanations should be in writing

4) Avoid emotional arguments

Do not say: “We think…”, “It should be fine…”.

Do say: “Under Contract No…”, “Under Invoice dated…”.

VII. THE 5 MOST DANGEROUS MISTAKES

1. Hiding information
2. Providing documents outside scope
3. Not reviewing minutes carefully before signing
4. Not re-calculating the proposed adjustments
5. Not using legal/tax counsel when needed

VIII. PREVENTION STRATEGY FROM THE START OF THE YEAR

1. Review the last 3 years
2. Check large-value expenses
3. Reconcile revenue – invoices
4. Keep electronic archives in two locations
5. Run annual internal tax reviews

IX. CASE – RIGHT VS WRONG RESPONSES

Business A

• Prepared complete documents
• Explained with evidence
• Reduced back taxes from VND 2B to VND 800M

Business B

• No preparation
• Inconsistent answers
• Classified as high-risk

Result: Back tax + penalties > VND 3B.

X. CONCLUSION – AN AUDIT IS A SYSTEM STRESS TEST

An audit does not bankrupt a business. A weak system does.

• A strong business is not afraid of checks
• Not afraid of data
• Not afraid of reconciliation

Because the system has been clean from the start.

FAQ – 5 Frequently Asked Questions

1) What are the typical steps of a tax audit in 2026?

Typically 6 steps: issue the decision → announce the decision → request documents → meetings & reconciliation → draft minutes → conclusions & handling decision.

2) What should a business do immediately after receiving the audit decision?

Verify scope–period–timeline; appoint one focal point (CFO/Chief Accountant); prepare a dedicated room; and standardize “work in writing” as a rule.

3) Should we provide all bank statements, contracts, and data to the audit team?

No. Provide only what is specifically requested and within the decision scope to avoid exposing unrelated data that could expand the issues.

4) If draft minutes are unclear, should we sign?

Do not sign if you do not fully understand. You may explain, supplement evidence, and request clarification before signing.

5) How can we reduce back tax and penalty risks?

Standardize records early, review the last 3 years, reconcile revenue–invoices–VAT, check large expenses, keep dual electronic archives, and run annual internal reviews.