Private business accounting is not simply about recording daily income and expenses; it's also a crucial legal risk management tool for business owners. With tax and accounting regulations in Vietnam undergoing significant changes by 2025, mastering bookkeeping methods and tax obligations is a prerequisite for stable business operations. This article is specifically designed for private business owners, in-house accountants, and those directly responsible for finance, aiming to provide the most comprehensive and accurate understanding possible.
Do private businesses need accountants?
According to current legal regulations, specifically the Accounting Law of 2015 and its amendments in 2024 effective from January 1, 2025, all private enterprises, upon establishment and commencement of operations, are required to organize accounting work. Private enterprise accounting plays a legal "filter," helping to ensure transparency in all financial transactions.
The unique responsibility of a sole proprietor stems from the very nature of this business model: the owner is liable without limit, using all of their personal assets for all debt obligations. Therefore, a rigorous accounting system for a sole proprietorship acts as a shield protecting personal assets against risks of litigation or debt collection.
The consequences of not having a properly organized accounting system can lead to serious economic losses for private businesses, such as the following:
- The tax authorities assessed the amount of tax payable based on assumed revenue because the private enterprise could not demonstrate reasonable expenses through its accounting records.
- They face serious administrative penalties under Decree 41/2018/ND-CP on violations in the field of accounting, with fines potentially reaching tens of millions of VND.
- Facing difficulties in demonstrating financial capacity when applying for bank loans or signing contracts with major partners.
In terms of personnel, private enterprises have the flexibility to organize their management structure. Common forms currently include:
- Establish your own dedicated accounting department within your business if you have a large scale of operation and generate many complex transactions.
- Hiring part-time accountants can save costs while still ensuring regular reporting is completed.
- Utilize professional private business accounting services to ensure high levels of expertise and timely updates on the constantly changing tax policies in 2025.
Choosing an accounting system for private businesses in 2025
Choosing the right accounting system from the outset will save private enterprise accountants a lot of time and effort in setting up the chart of accounts. Depending on the size of capital, revenue, and number of employees, the enterprise can apply one of the specific guiding circulars.
Circular 133/2016/TT-BTC is an accounting system specifically designed for small and medium-sized enterprises (SMEs). It remains the preferred choice for most private enterprise accountants today due to its flexibility, streamlined chart of accounts, and simplified reporting forms.
Circular 200/2014/TT-BTC applies to all types of businesses regardless of size. Large private enterprises, those operating in multiple sectors, or those planning to convert to joint-stock companies in the future often choose this circular to ensure consistency and high professionalism in their financial reporting.
Circular 99/2025/TT-BTC is the latest guidance document on the accounting regime for enterprises, issued on October 27, 2025. Although this document officially takes effect from January 1, 2026, the Ministry of Finance encourages units to implement it immediately in 2025 with the following objectives.
- Standardize digital financial data into modern formats for easier connection with regulatory authorities.
- This lays the groundwork for future integration and comparability of financial reporting according to international standards.
- Synchronizing the process of digitizing accounting documents for private enterprises right from the initial stage (Source: Ministry of Finance Information Portal).
The accounting system required for a private enterprise includes:
To ensure legal compliance when explaining matters to regulatory authorities, private enterprises must establish a well-structured accounting system from the very first accounting period. According to regulations, important documents must be stored at the company's headquarters for a minimum of 10 years.
The general ledger serves as the "backbone" of the system, comprising the general journal which records all transactions over time and the ledgers of accounts to aggregate data for each specific accounting object.
Detailed accounting ledgers are supplementary ledgers that help to closely manage each category of assets and liabilities. In particular, private enterprise accountants need to pay attention to specific types of ledgers to avoid confusion between personal assets and business assets.
Below is a summary table of the specific types of accounting books and their uses in private businesses.
| Type of accounting book | Target | Management objectives |
|---|---|---|
| Investment tracking log | Initial and additional capital contributions from the business owner. | Accurately determine the source of equity capital and the capacity to handle debt. |
| Detailed tax liability ledger | Value Added Tax (VAT), Corporate Income Tax (CIT), Personal Income Tax (PIT), and Business License Tax. | Control obligations to the state budget, avoid outstanding debts that could lead to forced collection of invoices. |
| Cash receipts and disbursements journal | Actual cash flow at the fund | Ensure a proper match between accounting records and cash, to meet immediate spending needs. |
Please note that these types of accounting records must be printed and bound at the end of each accounting period or stored as electronic files with digital signatures in accordance with current digital accounting regulations.
In terms of accounting methods, in 2025, private enterprise accountants typically apply the following modern methods to optimize efficiency.
- Use automated accounting software that integrates electronic invoicing to minimize data entry errors.
- Implementing digital signatures on internal documents is a step towards a paperless office model.
- Synchronize your data to a cloud storage system to ensure data security against hardware failures.
Types of taxes private businesses must pay in 2025
The year 2025 marks a significant shift in Vietnam's tax policy, with many attractive incentives aimed at stimulating the economy. Private business accountants need to understand these changes to optimize their tax obligations.
Business license tax is the first fee that businesses must pay annually based on their registered investment capital. Value Added Tax (VAT) continues to be reduced to 81% for many industry groups according to the roadmap in Decree 174/2025/ND-CP (Source: Government of Vietnam).
Corporate income tax (CIT) is a key focus in private enterprise accounting in 2025. According to the Corporate Income Tax Law No. 67/2025/QH15, tax policies are decentralized to support businesses.
Below is a detailed table of corporate income tax rates applicable for the year 2025.
| Business group | Annual revenue requirements | Applicable tax rate |
|---|---|---|
| Micro-enterprises | Under 3 billion VND | 15% |
| Small and medium-sized enterprises | From 3 billion to 50 billion VND | 17% |
| Conventional businesses | Over 50 billion VND | 20% |
Note that private enterprise accountants must truthfully declare the scale of revenue in order to apply the correct preferential tax rate according to the Law on supporting small and medium-sized enterprises.
Regarding personal income tax for sole proprietorships, the following characteristics should be noted to avoid confusion with other types of companies.
- Income from after-tax profits of a private enterprise belongs to the business owner and is generally not subject to additional personal income tax on capital investment after corporate income tax has been paid.
- If the employer signs an employment contract and pays their own salary, this income must be taxed according to the progressive tax rate schedule, just like regular employees.
- Personal expenses not related to business operations, if accounted for in the company's financial statements, will be excluded when calculating corporate income tax and may be considered taxable personal income for the owner.
Accounting procedures for private enterprises
To ensure a clean and error-free year-end financial report, private enterprise accountants need to follow a scientific and logical six-step process.
- Step 1: Gathering original documents is the most important stage, including purchase and sales invoices, inventory receipts and delivery notes, and bank documents.
- Step 2: Verify the legality and validity of the invoice to eliminate risks from illegal invoices by cross-checking it on the General Department of Taxation's portal.
- Step 3: Record entries in the general journal based on the verified documents to track all financial changes in chronological order.
- Step 4: Update the general ledger and subsidiary ledgers to categorize cash flows, serving the immediate management needs of the business owner.
- Step 5: Perform year-end closing entries such as transferring revenue and expenses to accurately determine the actual profit of the private enterprise accountant.
- Step 6: Prepare annual financial statements and tax returns to submit to the relevant authorities within the prescribed deadline (Source: General Department of Taxation).
Organizing effective accounting work in private enterprises
In the private business model, flexibility often comes with the risk of lax management. Therefore, professional accounting practices are the only way to optimize costs.
Establishing clear internal financial regulations helps private enterprise accountants effectively control cash flows. The necessary contents of these regulations include:
- Establish specific budget limits for client entertainment expenses, fuel costs, and travel expenses for each department.
- The process for approving advances and settling accounts is rigorous to prevent losses.
- Regulations regarding the use of company assets for personal purposes and vice versa.
Strengthening internal control through regular inventory activities is also a key task for private enterprise accountants in 2025. Specifically, as follows:
- Conduct daily cash counts to ensure accuracy between records and actual cash.
- Reconcile accounts payable with customers and suppliers quarterly to ensure timely collection of funds.
- Review the inventory list to identify slow-moving or damaged materials early on.
Common tax risks for private businesses in 2025
With the development of Big Data technology, tax authorities now have the ability to cross-check invoice data from all parties involved in a transaction. Private business accountants need to pay particular attention to the following risks.
The risks associated with using illegal invoices can lead to serious legal consequences. Businesses need to proactively implement the following preventive measures.
- Regularly check the operational status of your partners on the electronic invoice lookup system.
- Under no circumstances should you engage in transactions involving the purchase or sale of fictitious invoices without actual goods or services being provided.
- Keep complete records of transactions such as contracts, goods delivery and receipt records, and non-cash payment documents for invoices exceeding 20 million VND.
Errors in filing deadlines and discrepancies in profits are also key issues that private enterprise accountants need to clearly explain to the owner. Preparing complete and transparent documentation is the best way to protect the business from tax audits and inspections in 2025.
In summary, accounting practices for private enterprises in 2025 require a seamless combination of solid professional knowledge and a keen understanding of digital technology. Proactively reviewing accounting systems and updating to the latest preferential tax policies is key to ensuring the sustainable development and legal safety of private enterprises in today's business environment.
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Content production by: Mr. Le Hoang Tuyen – Founder & CEO MAN – Master Accountant Network, Vietnamese CPA Auditor with over 30 years of experience in Accounting, Auditing and Financial Consulting.
