Circular No. 132/2018/TT-BTC guiding accounting regulations for micro enterprises

CIRCULAR

Guidelines on Accounting Regulations for Micro Enterprises

Pursuant to the Accounting Law number 88/2015/QH13 dated November 20, 2015;

Pursuant to the Law on Supporting Small and Medium-sized Enterprises number 04/2017/QH14 dated June 12, 2017;

Pursuant to the Government Decree number 174/2016/NĐ-CP dated December 30, 2016 detailing certain provisions of the Accounting Law;

Pursuant to the Government Decree number 39/2018/NĐ-CP dated March 11, 2018 detailing certain provisions of the Law on Supporting Small and Medium-sized Enterprises;

Pursuant to the Government Decree number 87/2017/NĐ-CP dated July 26, 2017 stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

At the proposal of the Director of the Department of Accounting Supervision and Auditing,

PART I

GENERAL PROVISIONS

Article 1. Scope of Regulation

This Circular guides the recording of accounting entries, preparation, and presentation of Financial Statements for micro enterprises. The determination of tax obligations of enterprises towards the State budget shall be carried out in accordance with the laws on taxation.

Article 2. Applicability

1. The subjects to which this Circular applies are micro enterprises, including micro enterprises subject to corporate income tax (CIT) calculated based on taxable income and those subject to CIT at a percentage rate on sales revenue from goods and services.

2. The criteria for identifying micro enterprises implementing the accounting regulations under this Circular shall be implemented in accordance with the laws on taxation.

Article 3. Application of Accounting Regulations

1. Micro enterprises subject to CIT calculated based on taxable income shall apply the accounting regulations as prescribed in Chapter II of this Circular.

2. Micro enterprises subject to CIT calculated at a percentage rate on sales revenue from goods and services shall apply the accounting regulations as prescribed in Chapter III of this Circular, or may choose to apply the accounting regulations as prescribed in Chapter II of this Circular.

3. Micro enterprises may choose to apply the Accounting Regulations for Small and Medium-sized Enterprises issued pursuant to Circular number 133/2016/TT-BTC dated August 26, 2016 of the Ministry of Finance, if it is suitable for their business operations and management requirements.

4. Micro enterprises must consistently apply the accounting regulations throughout a fiscal year. In case during a fiscal year, the enterprise experiences changes leading to no longer being within the scope defined in Article 2 of this Circular, they shall continue to apply this Circular until the end of the current fiscal year and implement changes to the accounting regulations from the next fiscal year onwards.

Article 4. Accounting Vouchers

1. The content of accounting vouchers, the issuance and signing of accounting vouchers by micro enterprises shall be carried out in accordance with Articles 16, 17, 18, and 19 of the Accounting Law and specific guidance provided in this Circular.

2. The content, form of invoices, procedures for issuance, management, and use of invoices (including electronic invoices) shall be carried out in accordance with the laws on taxation.

3. Micro enterprises are allowed to develop accounting voucher formats suitable for their business characteristics, ensuring clarity, transparency, and ease of verification and control (except for sales invoices). In cases where micro enterprises cannot develop accounting voucher formats for themselves, they may apply the formats and methods for issuing accounting vouchers as specified in Appendix 1 of this Circular.

Article 5. Accounting Books

1. The contents of accounting books, the system of accounting books, the opening of books, bookkeeping, closing of books, storage of accounting books, and the correction of accounting books at micro-enterprises shall be carried out in accordance with the provisions of Articles 24, 25, 26, and 27 of the Accounting Law and specific guidance provided in this Circular.

2. Micro-enterprises may develop accounting book formats suitable for their business characteristics, ensuring clarity, transparency, and ease of verification and control. In cases where micro-enterprises cannot develop their own accounting book formats, they may apply the formats and bookkeeping methods specified in this Circular.

Article 6. Units of Measurement Used in Accounting

Micro-enterprises shall comply with the regulations on units of measurement used in accounting as stipulated in Article 10 of the Accounting Law and Article 4 of Decree No. 174/2016/NĐ-CP dated December 30, 2016, detailing certain provisions of the Accounting Law issued by the Government.

Article 7. Provisions on Storage and Preservation of Accounting Documents

1. Accounting vouchers, accounting books, and other accounting documents must be retained at the enterprise to serve daily recording; determine the tax obligations of micro-enterprises towards the state budget; and facilitate the inspection and supervision by the enterprise's owners, tax authorities, or other competent state agencies.

2. The preservation and storage of accounting documents of micro-enterprises shall be carried out in accordance with the provisions of the Accounting Law and Decree No. 174/2016/NĐ-CP dated December 30, 2016, detailing certain provisions of the Accounting Law issued by the Government.

3. Micro-enterprises may store accounting vouchers, accounting books, and other accounting documents electronically in accordance with the provisions of the Accounting Law.

Article 8. Organization of Accounting Staff and Accountants

1. Micro-enterprises may arrange personnel responsible for accounting without being required to appoint an accounting director. Micro-enterprises that pay corporate income tax based on a percentage of sales revenue may organize accounting activities in accordance with the provisions of Chapter III of this Circular.

2. The arrangement of accounting personnel in micro-enterprises must ensure compliance with the provisions of Article 19 of Decree No. 174/2016/NĐ-CP dated December 30, 2016, detailing certain provisions of the Accounting Law issued by the Government.

3. Micro-enterprises may enter into contracts with service providers to hire accounting services or accounting directors in accordance with the law. A list of qualified service providers is published and updated periodically on the Ministry of Finance’s electronic portal.

Chapter II

ACCOUNTING AT MICRO-ENTERPRISES THAT PAY CORPORATE INCOME TAX BASED ON INCOME SUBJECT TO TAX

PART 1

ACCOUNTING VOUCHERS

Article 9. Accounting Vouchers

1. Micro-enterprises that pay corporate income tax based on income subject to tax shall apply the following accounting vouchers:

3. In addition to the accounting vouchers prescribed in paragraph 1 of this Article, micro-enterprises may choose to apply the accounting vouchers prescribed in Circular No. 133/2016/TT-BTC of the Ministry of Finance dated August 26, 2016, guiding the accounting system for small and medium-sized enterprises to meet the management requirements of their production and business activities.

3. In addition to the accounting vouchers prescribed in Clause 1 of this Article, micro enterprises may choose to apply the accounting vouchers stipulated in Circular No. 133/2016/TT-BTC of the Ministry of Finance dated August 26, 2016, guiding the accounting system for small and medium-sized enterprises, to meet the management requirements of their business operations.

PART 2

ACCOUNTS

Article 10. Accounting Accounts

Small businesses subject to corporate income tax based on taxable income shall apply the list of accounting accounts, contents, structure, accounting principles, and accounting methods for some main economic transactions as specified in Appendix 2 "Accounting Account System" accompanying this Circular to record and reflect economic transactions arising according to each economic content.

PART 3

ACCOUNTING LEDGERS

Article 11. Accounting Books

1. Small businesses subject to corporate income tax based on taxable income shall apply the following accounting books:

2. Financial statements provide information about the following aspects of small businesses:

- Asset situation;

PART 4

FINANCIAL STATEMENTS

Article 12. - Debts and liabilities;

- Shareholders' equity;

- Revenue and income items;

- Expense items;

- Profit, loss, and distribution of business results.

Article 13. Financial Reporting System

1. Annually, small businesses subject to corporate income tax based on taxable income must prepare financial statements and supplementary financial statement reports according to the following list:

Name of Financial Statement

Balance Sheet

Form B01 - DNSN

Income Statement

3. In addition to the financial statements prescribed in Clause 1 of this Article, micro enterprises may choose to apply the financial statements prescribed in Circular No. 133/2016/TT-BTC of the Ministry of Finance dated August 26, 2016, to serve the management of their business operations as well as to determine tax obligations towards the state budget.

4. During the implementation process, if there are any difficulties, please reflect them to the Ministry of Finance for research and resolution./.

Article 14. Responsibilities, Timeframe for Preparing and Submitting Financial Reports

1. Annually, micro enterprises that pay corporate income tax based on taxable income must prepare financial reports and related financial report schedules in accordance with Clause 1 of Article 13 of this Circular.

2. The financial reports and related financial report schedules of micro enterprises must be submitted to the direct managing tax authority and the business registration agency no later than 90 days from the end of the fiscal year, and must be preserved and stored at the enterprise in accordance with accounting laws for inspection and audit purposes as required by competent authorities.

CHAPTER III

ACCOUNTING AT MICRO ENTERPRISES THAT PAY CORPORATE INCOME TAX AS A PERCENTAGE OF SALES REVENUE FROM GOODS AND SERVICES

Article 15. Accounting Documents

1. Micro enterprises that pay corporate income tax as a percentage of sales revenue from goods and services shall apply accounting documents according to the following list:

2. The format, content, and method of preparing the accounting documents specified in Clause 1 of this Article are detailed in Appendix 1 "Format and Method of Preparing Accounting Documents" issued together with this Circular.

In addition to the accounting documents specified in Clause 1 of this Article, micro enterprises may choose to apply the accounting documents specified in Clause 1 of Article 9 of this Circular or Circular No. 133/2016/TT-BTC of the Ministry of Finance dated August 26, 2016, to meet the management requirements of their production and business activities.

3. Sales invoices for goods and services

- Sales invoices for goods and services are accounting documents reflecting completed sales transactions. Sales invoices for goods and services can be either VAT invoices or sales invoices, depending on the provisions of tax laws regarding the specific VAT payment methods applicable to micro enterprises, including:

+ In the case where micro enterprises pay VAT using the deduction method, the sales invoices issued to customers are VAT invoices.

+ In the case where micro enterprises pay VAT using the direct payment method, the sales invoices issued to customers are sales invoices.

- Sales invoices for goods and services issued by micro enterprises to customers when selling goods and services serve as the basis for determining the corporate income tax obligations of micro enterprises towards the state budget.

4. Payroll and other income payment vouchers for employees serve as the basis for determining the individual income tax obligations of employees in micro enterprises towards the state budget.

5. Payment vouchers submitted to the state budget serve as the basis for evaluating the fulfillment of tax payment obligations of micro enterprises towards the state budget.

Article 16. Accounting Methods

1. Micro enterprises that pay corporate income tax as a percentage of sales revenue from goods and services are not required to open accounting accounts if they have no need to do so; instead, they only record entries in the accounting ledger (recording economic transactions in relevant categories without reflecting corresponding accounts) to track revenues and incomes, taxes payable to the state, payroll expenses, and other deductions, serving the purpose of determining tax obligations of the enterprise towards the state budget.

2. If micro enterprises that pay corporate income tax as a percentage of sales revenue from goods and services require the application of accounting accounts similar to those used by enterprises paying corporate income tax based on taxable income to meet the management requirements of their production and business activities, they may apply the provisions of Chapter II of this Circular to implement such practices.

Article 17. Accounting Books

1. Small enterprises subject to corporate income tax calculated as a percentage of sales revenue from goods and services shall open accounting books to monitor revenues, income, taxes payable to the State, salaries, and deductions made according to salary, etc., for the purpose of determining the enterprise's tax obligations to the State budget as follows:

3. In addition to the accounting books prescribed in Clause 1 of this Article, small enterprises subject to corporate income tax calculated as a percentage of sales revenue from goods and services may choose to apply additional detailed accounting books or other consolidated accounting forms as stipulated in Circular No. 133/2016/TT-BTC dated August 26, 2016, guiding the accounting system for small and medium-sized enterprises, in accordance with the management requirements of their business activities and tax obligations to the State budget.

Article 18. Financial Statements

1. Small enterprises subject to corporate income tax calculated as a percentage of sales revenue from goods and services are not required to prepare financial statements to submit to tax authorities.

2. Small enterprises subject to corporate income tax calculated as a percentage of sales revenue from goods and services must comply with the reporting requirements set forth by tax laws. The time for preparation and submission of reports shall be carried out in accordance with the provisions of tax laws.

3. In addition to the reports required by tax laws, based on information about sales revenue and service provision, salaries, and deductions made according to salary, etc., small enterprises may prepare accounting reports to serve management and operation.

4. If small enterprises subject to corporate income tax calculated as a percentage of sales revenue from goods and services choose to apply the accounting system prescribed in Chapter II of this Circular to meet the needs of managing their production and business activities, they still need to prepare financial statements as required. These financial statements do not have to be submitted to tax authorities but should be kept and stored according to regulations and used within the enterprise for inspection and audit purposes when requested by competent state agencies.

Article 19. Transfer of Balances on Accounting Books

PART IV

IMPLEMENTATION

1. For small enterprises currently applying Circular No. 133/2016/TT-BTC, if they switch to applying the accounting system prescribed in Chapter II of this Circular, they shall transfer balances of accounting accounts as follows:

- The balance of Account 112 - Bank Deposits and the balance of Account 1281 - Time Deposits shall be transferred to Account 111 - Cash.

- The balance of Accounts 1331 - VAT Deductible Input Tax on Goods and Services, and 1332 - VAT Deductible Input Tax on Fixed Assets shall be transferred to Account 1313 - VAT Deductible Input Tax.

- The balance of Accounts 136 - Internal Receivables, 138 - Other Receivables, and 141 - Advance Payments shall be transferred to Account 1318 - Other Receivables.

- The balance of Accounts 152 - Raw Materials, and 153 - Tools and Equipment shall be transferred to Account 1521 - Raw Materials and Tools.

- The balance of Account 154 - Work-in-Progress Production Costs shall be transferred to Account 1524 - Work-in-Progress Production Costs.

- The balance of Accounts 155 - Finished Products, 156 - Inventory, and 157 - Goods Sent for Sale shall be transferred to Account 1526 - Finished Products and Inventory, including details as required for management.

- The balance of Debit Account 211 - Fixed Assets, after deducting the balance of Credit Account 214 - Depreciation of Fixed Assets, shall be transferred to the Debit Balance of Account 211 - Fixed Assets.

- The balance of Account 334 - Employee Payroll Liabilities shall be transferred to Account 3311 - Employee Payroll Liabilities.

- The balance of Accounts 3382 - Trade Union Fees, 3383 - Social Insurance, 3384 - Health Insurance, and 3385 - Unemployment Insurance shall be transferred to Account 3312 - Deductions According to Salary.

- The balance of Accounts 331 - Accounts Payable to Suppliers, 335 - Expenses Payable, 336 - Internal Payables, 3381 - Other Payables and Receivables, 3386 - Advance Deposits Received, 3387 - Unearned Revenue, 3388 - Other Payables and Receivables, 3411 - Loans, and 3412 - Operating Leases Payable shall be transferred to Account 3318 - Other Payables.

- The balance of Accounts 33311 - Output VAT, and 33312 - Import VAT shall be transferred to Account 33131 - VAT Payable.

- The balance of Accounts 3332 - Special Consumption Tax, 3333 - Export and Import Duties, 3335 - Personal Income Tax, 3336 - Resource Tax, 3337 - Land and Rent Taxes, 33381 - Environmental Protection Tax, 33382 - Other Taxes, and 3339 - Fees and Other Payables shall be transferred to Account 33138 - Other Taxes, Fees, and Other Payables.

- The balance of Accounts 4211 - Undistributed Profit After Tax of Previous Year, and 4212 - Undistributed Profit After Tax of Current Year shall be transferred to Account 4118 - Undistributed Profit After Tax.

2. Any other detailed contents reflected on related accounts that contradict this Circular must be adjusted according to the provisions of this Circular.

1. This Circular takes effect from February 15, 2019, and applies to fiscal years starting or after April 1, 2019.

Article 20. Effective Date

2. In cases where the legal normative documents cited in this Circular are amended, supplemented, or replaced, implementation shall follow the provisions of those documents.

3. Ministries, sectors, People's Committees, Departments of Finance, Provincial Tax Bureaus, and Municipalities directly under the Central Government are responsible for guiding small enterprises to implement this Circular.

4. During the implementation process, if there are any difficulties, they are advised to report to the Ministry of Finance for research and resolution./.

4. During the implementation process, if there are any difficulties, they are requested to be reflected to the Ministry of Finance for study and resolution./.