The problem: a private school collects tens of billions in tuition yearly — where does it go, who oversees? Quick answer: private schools must run transparent finances: full bookkeeping, regulated financial-report disclosure, independent audits where required, and full tax compliance. “Slush funds” and double books breach accounting and tax law.
Financial transparency duties
- Full bookkeeping: every collection (tuition, service fees, sponsorships) and expense (salaries, facilities, operations) recorded under the Accounting Law 88/2015/QH13 — nothing off-book.
- Disclosure: publish financial reports and revenue-expense settlements as prescribed; foreign-invested schools also follow investor reporting rules.
- Separation: school finances separated from owners’ personal finances — treating school money as a “personal wallet” breaches governance and the law.
Independent audits
Auditable private schools need annual financial-statement audits by independent auditors. Audit reports are credibility “passports” with parents, investors, and banks (for expansion loans) — and shields in tax inspections: independently audited figures carry far more weight than internal books.
Internal financial governance
Schools need: internal spending rules (who approves, what limits); separated accountant/cashier roles; internal controls over major spending (construction, equipment procurement); and school-board/investor oversight. Many private-school “over-collection” and leakage scandals stem from loose internal governance, not missing laws.
Tax duties
Private schools declare and pay fully: VAT, CIT (CIT Law 67/2025, standard rate 20%), and PIT withheld for teachers and staff. Under Tax Administration Law 108/2025/QH15 inspections, schools must produce complete books and vouchers — undocumented expenses may be disallowed, with back-taxes and penalties.
Frequently Asked Questions
1. Must private schools disclose financial reports?
Yes: full bookkeeping under the Accounting Law, regulated disclosure of financial reports and settlements.
2. Are private schools audited?
Auditable schools need annual independent audits. Audit reports build credibility and stand up in tax inspections.
3. Can owners spend school money personally?
No. School and personal finances must be separated; personal use breaches governance and accounting/tax law.
4. Penalties for double books?
Accounting and tax violations: administrative penalties, back-taxes, disallowed undocumented expenses on inspection.
5. Can parents see school financial reports?
Parents are entitled to information on charges concerning their children under publicity principles; overall-report access follows school financial-disclosure rules.
This article has been quality-reviewed by the FLAW AI Legal Council.
