2025 TAX FINALIZATION (PART 2): INTER-DISCIPLINARY CONTROL, E-INVOICE PRESSURE, AND SOCIAL INSURANCE – THE MANDATORY DIGITALIZATION STRATEGY

2025 marks the era of inter-disciplinary control and real-time data surveillance. Risks are no longer confined to accounting ledgers but extend to all business transactions and legal liabilities toward employees. This article focuses on two critical data “hotspots” and one mandatory strategy:

• E-INVOICES (E-INV): THE REQUIREMENT FOR INSTANT ACCURACY

The E-invoice system has become the first and most effective “web” of the tax authorities. All input and output transactions are transmitted directly and reconciled automatically, making errors more detectable than ever.

1. The Peak of Digital Control: Timing of Issuance Issuing invoices late (after the transfer of ownership), failing to issue invoices upon receiving contract advances for services, or failing to issue invoices upon service completion will face strict penalties.

Note: Tax authorities will use the digital signature date on the E-invoice system to compare with the actual delivery/service date (as shown on handover minutes or contracts). Businesses must ensure the invoicing process happens concurrently with or immediately after the transaction occurs.

• Reconciling Risk Data 

The system will automatically filter E-invoices showing signs of risk, including:

• Incorrect Information: Wrong business line codes, incorrect Tax Identification Numbers (TIN), or buyer information that does not match registration data.
• Abnormal Transactions: Purchases/services that do not align with the core business sector or transactions with high-risk companies (e.g., suspended or abandoned business addresses).

1. Difficulty in Adjustments 

The process of handling erroneous invoices (cancellation, replacement, adjustment) is becoming more complex and time-consuming. Frequent adjustments serve as an indicator that categorizes a business as “high-risk,” significantly increasing the likelihood of an audit.

• THE SOCIAL INSURANCE (SI) RED LINE: CROSS-CHECKING PRESSURE AND LEGAL LIABILITY

The “hotspot” of Social Insurance and base salary is not just a cost issue but a matter of labor law compliance, which can lead to severe legal consequences.

• Inter-departmental Cross-checking 

The Social Insurance Agency, Tax Authorities, and Department of Labor will synchronize data for cross-checks:

• Salaries subject to SI must correspond to the Salary Structure and headcount stated in the Labor Contracts.
• SI contribution levels must be consistent with the deductible payroll expenses for CIT and the declared taxable income for PIT.

• Handling Evasion and Underpayment 

Acts of evasion (not enrolling eligible employees) or underpayment (declaring contribution salaries lower than actual salaries) will be strictly penalized:

• Arrears Collection: Full recovery of unpaid SI, Health Insurance, and Unemployment Insurance.
• Late Payment Interest: Fines based on the amount of arrears.
• Criminal Liability: In cases of large-scale SI evasion, businesses may face criminal prosecution under the Penal Code.

Solution: Businesses must transparently define salary structures in Labor Contracts and Financial Regulations, ensuring SI contributions are based on actual wages as per regulations.

3. THE SURVIVAL STRATEGY: COMPREHENSIVE STANDARDIZATION AND DIGITALIZATION

In the data era, compliance cannot rely on manual year-end checks. Digital transformation is a mandatory strategy to mitigate risks:

• Process Standardization: 

Establish standard operating procedures (SOPs) for all activities:

• Invoicing Process: Clearly define responsible personnel and the exact timing for E-invoice issuance (immediately after acceptance).
• Expense Documentation Process: Implement approval workflows to verify the validity of invoices, contracts, and payment vouchers before payment and recording.

• Adopting Digital Tools: 

Businesses should invest in tools capable of:

• Centralized E-invoice Management: Automatically fetching input/output data, comparing, and alerting errors instantly.
• Accounting/ERP Software: Integrating Accounting – Finance – Payroll – Contract data to ensure data consistency for cross-reconciliation.
• E-archiving: Transitioning to secure electronic storage for quick retrieval upon tax authority request.

FINAL CONCLUSION FOR 2025 TAXES

2025 is a test of a business’s ability to manage through data. To avoid the risk of arrears, heavy fines, and to ensure effective governance:

1. Input Control: Tighten E-invoices and non-cash payment documents.
2. HR Transparency: Standardize salary structures and SI contribution levels according to the law.
3. Process Optimization: Apply digital technology for automated reconciliation to minimize manual errors.

SPECIALIZED SUPPORT FROM TPM 

The transformation and standardization of systems in 2025 are urgent and complex. For professional consultancy, comprehensive reviews of Accounting – Tax – SI processes, and implementation of suitable digital solutions, please contact the TPM expert team.

Quyen Nguyen