What is the behavior of using two accounting systems?
The Tax Department has just issued a Handbook guiding the prevention and combat of acts of using two accounting systems, to help businesses, business households, tax agents and organizations providing tax technology solutions identify and prevent violations, contributing to accounting transparency and compliance with tax laws.
Accordingly, the act of using two accounting books (also known as "two book systems") is that one unit establishes and operates simultaneously from two or more financial accounting book systems.
In which, one system with "low" data is used to declare and report to tax authorities to reduce payables; another system reflects revenue, expenses, and actual profits operated internally or for other purposes such as borrowing capital and profit sharing.
The Tax Department said that the nature of this act is to intentionally hide revenue, hide the scale of production and business activities in order to distort tax obligations. This is a prohibited act and is a typical form of tax evasion and fraud.
Regarding the legal basis, the tax authority cited Clause 10, Article 13 of the 2015 Accounting Law, which strictly prohibits the act of creating two or more financial accounting book systems or providing and publishing financial statements with inconsistent data in the same accounting period.
According to the Tax Department, the prohibited thing is not only "setting up two books", but also the simultaneous existence of inconsistent reports and data in the same accounting period.
This act is also directly related to the provisions of Article 17 (responsibility of taxpayers), Article 143 (tax evasion) of the 2019 Law on Tax Administration; Clause 4, Article 45 of the 2025 Law on Tax Administration and may be handled according to Article 200 (Tax evasion crime) or point d, Clause 1, Article 221 (Crime of violating regulations on accounting causing serious consequences) of the 2015 Penal Code (amended and supplemented in 2017).
The Tax Department emphasizes the principle of "one system - honest - complete". Accordingly, all economic and financial operations arising must be recorded fully, honestly, and promptly on a unified accounting system according to regulations. Tax declaration data must match actual accounting data and business cash flow.
Distinguishing internal governance books and violations
However, the Tax Department notes that not everything that businesses maintain with many types of internal books and reports is a violation. Internal management books, analysis, and forecasting are completely legal if they do not distort tax obligations and do not have a parallel system of financial data different from the tax declaration data.
Conversely, the violation is the existence of two different sets of financial data in the same period; actual revenue is higher than declared revenue; transactions are kept "out of books" or intentionally separated data between software to avoid comparison.
The Tax Department said that the deciding line is that a corporate governance report becomes a violation immediately when it comes with the fact that tax declaration data is lower than reality. The purpose of concealing tax obligations, not the number of reports, is the constituent factor of the violation.
Warning 9 risk signs
The Tax authority recommends that businesses and business households proactively self-examine if one or more of the following signs appear:
Revenue is not commensurate with the number of invoices issued; selling goods but not issuing invoices or issuing invoices lower than the actual value.
The rate of cash transactions is unusually high compared to the specific nature of the industry and the scale of operations.
Data is not consistent between the accounting system, electronic invoices and cash flow through banks.
Using many non-synchronous accounting software, showing signs of separation, "dividing" data between systems.
Declarated profits are continuously abnormally low or losses are prolonged while scale and actual revenue are still growing.
Large difference between tax reporting data and data provided to banks when borrowing capital or to investors.
Business households declare revenue below the tax threshold but actual revenue above the tax threshold.
Accounting expenses that do not have full legal invoices and documents as prescribed or do not meet the conditions to be included in deductible expenses when determining taxable income.
The incurred costs increase abnormally or there is a significant difference between accounting data and tax returns, which is not consistent with the scale, industry and actual production and business activities of the enterprise.
According to the Tax Department, modern tax management methods allow for increasingly fast and accurate detection of errors through big data analysis and application of risk management to detect abnormalities in revenue, expenses, and profits by industry; cross-checking between electronic invoice data, accounting data and payment cash flow; connecting and sharing information between tax authorities and banks, e-commerce platforms, payment intermediary service providers and related agencies; receiving information from organizations providing accounting software solutions and electronic invoices.
The Tax Department warns that the above signs pose a high risk of tax law violations and can be fully detected through data analysis and risk management by tax authorities. "The gap between'declared data' and'actual data' is increasingly difficult to hide.
