An accounting period is the time frame during which a business prepares its financial statements and reports its results of operations and financial position. With the introduction of Circular 111/2021/TT-BTC (effective from July 1, 2022) on domestic tax operations issued by the Ministry of Finance, the concept of tax accounting period has had some changes. changes from the old regulations. In this article, Faro Vietnam will help you clarify the above concept.
1. What is an accounting period?
How is the tax accounting period determined according to the latest current regulations? The accounting period is the duration during which accounting receives, processes, and provides information about the economic and financial activities of the entity occurring within that specific period.
The accounting period concept relates to the going concern of an accounting entity. If you wait until the accounting unit no longer exists to determine the operating results and financial position of the accounting unit, the users of accounting information will face many difficulties in making decisions. economic decisions related to the entity.
How is the tax accounting period determined?
2. What is the accounting period in Vietnam's accounting law?
According to Clause 1, Article 8 of Circular 111/2021/TT-BTC (effective from July 1, 2022), which stipulates the tax accounting period: The tax accounting period is determined according to the calendar year, referred to as the accounting year, consisting of 4 quarters, specifically:
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The tax accounting period runs from January 1 to December 31 of the calendar year.
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For a newly established tax accounting unit, the tax accounting period for the first year is determined from the effective date of the decision on establishment, division, separation, consolidation, or merger of the tax accounting unit until December 31 of the calendar year.
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The last tax accounting period for a tax accounting unit undergoing division, separation, consolidation, merger, or dissolution is from January 1 of the calendar year to the day before the effective date of the decision on division, separation, consolidation, merger, or dissolution.
The timing of the tax accounting period for the first and last years shall comply with the guidance provided in the Accounting Law and its related documents. This revised version organizes the information into bullet points for better clarity and readability.
Principles of Accounting According to the Tax Accounting Period
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3. Objects of tax accounting in 2023
Tax accounting encompasses the collection, recording, and documentation of all tax amounts collected, pending collection, refunded, exempted, reduced, frozen, or canceled by tax authorities during the course of their professional tax management activities.
In which, the subjects of tax accounting include:
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Receivables, already collected, and yet to be collected from tax: Reflects the amount of tax that is collected, collected, and still receivable by the tax authority from the taxpayer or the organization authorized to collect by the tax authority.
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Amounts that must be refunded, refunded, and still need to be refunded: Reflects the tax amounts that must be refunded, refunded or refunded to the taxpayer or the organization authorized to collect by the tax authority.
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Exemptions, reductions, debt freezes, tax debt cancellations: Reflects tax exemptions, reductions, debt freezes and debt cancellations made by tax authorities.
4. Principles of Accounting According to the Tax Accounting Period
The tax accounting date is determined as the date of recording in tax accounting books within the tax accounting module.
The date for collecting input information by the tax accountant must adhere to the principle of recording on the day when the tax administration operation occurs or, at the latest, on the day immediately following the occurrence of the tax administration operation. Exceptions apply for statutory holidays, where the date of information collection is the next working day after the holiday.
In cases where adjustments to tax administration operations that were accounted for in the previous year's tax accounting period are necessary during the preparation of tax accounting reports, these adjustments can be made before the closing time of the tax accounting period. Such adjustments are accounted for and allocated to the tax accounting period of the previous year, as determined by the accounting year information specified in Clause 1 of this Article.
After the closing time of the tax accounting period, adjustments to data in the tax accounting period of the previous year can only be made upon the request of the competent state agency and in accordance with the provisions outlined in Clauses 3 and 4, Article 27, and Clauses 2 and 3, Article 30 of this Circular.
This revised version organizes the information into bullet points for easier comprehension and emphasizes key points in each section.
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