A tax inspection is far less painful when your records are complete and easy to find. Most penalties during inspections are not about aggressive tax positions; they are about missing documents, weak filing, and expenses that cannot be substantiated. This guide explains what to keep, how long, how to organize it, and the errors that turn a routine check into an assessment. You will leave with a retention plan you can apply immediately.

Why documentation is the real battleground

Tax authorities do not just read your return. They test whether each deducted expense and declared input has valid supporting evidence. In Vietnam, a deductible expense generally needs a valid invoice, a contract or supporting document, proof of a genuine transaction, and, for larger payments, non-cash payment evidence. If any link is missing, the expense can be disallowed, increasing taxable income and creating penalties and interest.

The chain of evidence for an expense

Think of every cost as a chain: contract, invoice, delivery or service proof, and payment record. An inspector follows this chain. A broken link is where adjustments happen. Building the full chain during the year is far easier than reconstructing it under pressure.

What to retain and for how long

Accounting documents, ledgers, financial statements, and supporting records must be retained for the periods set by the Law on Accounting. In practice, accounting records and vouchers are kept for years, and documents directly used for recording and financial statements are kept for a long minimum period. Rather than memorizing a single number, apply a simple rule: keep everything that supports a tax return until well past the period the authority can still inspect it.

Categories worth filing separately

• Sales and purchase invoices, matched to contracts
• Bank statements and payment vouchers
• Payroll, labor contracts, and personal income tax records
• Fixed asset files, including invoices and depreciation schedules
• Tax returns and confirmations of submission and payment
• Import-export customs documents where relevant

A real scenario: the marketing spend with no contract

A services company deducted 600 million VND of marketing costs supported only by invoices. During inspection, the officer asked for contracts, deliverables, and evidence the services were performed. The company had none. The expense was disallowed, raising CIT and triggering penalties and late-payment interest. The invoices were genuine, but the transaction could not be proven. A one-page contract and acceptance record would have protected the deduction.

Common mistakes and how to fix them

Filing by date only. When an inspector asks for one supplier’s transactions, date-only filing forces a painful search. Fix: file by category and counterparty as well.

Paying large invoices in cash. Cash payment above the threshold can void input VAT and CIT deductibility. Fix: use bank transfers for significant payments.

Keeping only soft copies without control. Lost files and unsigned scans create gaps. Fix: keep organized digital archives with backups, and retain originals where required.

Discarding records too early. Destroying documents still within the inspection window removes your defense. Fix: follow a written retention schedule.

Records retention checklist

• Write a retention schedule listing each document type and its keep-until date
• File by period, category, and counterparty
• Ensure every expense has the full contract-invoice-proof-payment chain
• Use non-cash payment for significant transactions
• Back up digital records and store originals securely
• Reconcile filed documents to the ledger periodically
• Restrict who can dispose of records and log any disposal

Conclusion and next step

Good records are not bureaucracy; they are your defense in an inspection. Build the evidence chain as transactions happen and file it so anyone can retrieve a document in minutes. Next step: draft a one-page retention schedule this week and assign an owner for each document category.

Frequently asked questions

How long must we keep accounting records?

Retention periods are set by the Law on Accounting and vary by document type, from several years for supporting vouchers to longer minimums for records used in the financial statements. Keep anything supporting a tax return until well beyond the inspectable period.

Are scanned copies acceptable in an inspection?

Electronic records are increasingly accepted, especially for e-invoices, but you must be able to demonstrate authenticity and integrity. For documents legally required as originals, retain the originals.

Can an expense be disallowed even with a valid invoice?

Yes. A valid invoice alone is not enough if the transaction cannot be proven or lacks a contract, delivery evidence, or required non-cash payment. The full chain matters.

What triggers a tax inspection?

Risk indicators such as unusual ratios, continuous losses, large refunds, or industry focus can prompt one, though routine periodic inspections also occur. Strong records reduce risk regardless of the trigger.

References

• Law on Accounting (Vietnam) and its record-retention provisions
• Law on Tax Administration (Vietnam)
• Guiding circulars on invoices and deductible expenses under CIT and VAT