Do enterprises have the right to request an explanation of the tax audit record at their premises in Vietnam?

Do enterprises have the right to request an explanation of the tax audit record at their premises in Vietnam?

Based on subsection c, clause 1, Article 111 of the Law on Tax Administration 2019, it is stipulated as follows:

Rights and obligations of taxpayers during tax audits at their premises

1. Taxpayers have the following rights:

a) Refuse the inspection when there is no tax audit decision;

b) Refuse to provide information, documents not related to the tax audit content; information, documents that are state secrets, except in cases where the law provides otherwise;

c) Receive tax audit record and request an explanation of the content of the tax audit record;

d) Preserve opinions in the tax audit record;

đ) Complain, initiate lawsuits, and request compensation as prescribed by law;

e) Denounce legal violations during the tax audit process.

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Thus, enterprises have the right to request an explanation of the content of the tax audit record when the tax audit is conducted at their premises.

Do enterprises have the right to request an explanation of the tax audit record at their premises in Vietnam? (Image from the Internet)

What are cases where an enterprise subject to tax audit at its premises in Vietnam?

According to clause 1, Article 110 of the Law on Tax Administration 2019, it is stipulated about the cases where an enterprise is subject to tax audit at its premises as follows:

- Cases where the dossier is subject to inspection before tax refund; inspection after tax refund for dossiers entitled to tax refund before inspection;

- Cases stipulated in point b, clause 2, Article 109 of Law on Tax Administration 2019;

- Cases of post-clearance inspection at the premises of the customs declarant according to the provisions of customs law;

- Cases with signs of legal violations;

- Cases selected according to the plan, special topics;

- Cases following recommendations of the State Audit, State Inspectorate, and other competent authorities;

- Cases of division, separation, merger, consolidation, type change, dissolution, cessation of operations, equitization, termination of tax code effect, relocation of business, and ad-hoc inspections as directed by competent authorities, excluding dissolution and cessation of operations where the tax authority is not required to conduct final tax settlement according to legal regulations.

What is the procedure for tax audit at enterprise premises in Vietnam?

According to clause 5, Article 72 of Circular 80/2021/TT-BTC, the procedure for tax audit at enterprise premises is regulated as follows:

- Issuance of tax audit Decision

+ Tax authorities issue a tax audit decision for cases regulated in Article 110 of the Law on Tax Administration 2019. tax audit at enterprise premises is only conducted when there is a tax audit decision for the enterprise's premises.

+ Tax authorities issue a tax audit Decision for the contents and periods with risks, excluding tax refund inspections. The tax audit Decision is made following form No. 04/KTT issued with Circular 80/2021/TT-BTC.

+ The inspection duration is determined according to the provisions of clause 4, Article 110 of the Law on Tax Administration 2019. In case of extension, the Head of the inspection team reports to the competent person to issue an Extension Decision according to form No. 05/KTT issued with appendix I of Circular 80/2021/TT-BTC.

- The inspection under the tax audit Decision must be completed no later than 10 working days from the date of issuance of the tax audit Decision, except in cases where the tax audit Decision must be canceled according to form No. 06/KTT issued with appendix I of Circular 80/2021/TT-BTC or inspection time is postponed.

+ At the commencement of the tax audit, the Head of the inspection team is responsible for announcing the tax audit Decision, preparing the Announcement Report, and explaining the content of the Inspection Decision so that the enterprise understands and adheres to the Inspection Decision. The Announcement Report of the Inspection Decision is prepared following form No. 07/KTT issued with appendix I of Circular 80/2021/TT-BTC.

- If the enterprise requests to postpone the inspection time with valid reasons, or the tax authority has force majeure reasons to postpone, the tax authority must notify the enterprise before the expiry of the decision announcement period according to form No. 08/KTT issued with appendix I of Circular 80/2021/TT-BTC.

+ During the inspection, if force majeure reasons arise, making it impossible to continue the inspection, the Head of the inspection team reports to the decision issuer to temporarily suspend the inspection. The suspension period is not counted in the inspection duration.

- If during the tax audit it is necessary to adjust the Inspection Decision (replace the Head, member or add team members, add inspection content, period or reduce team members, content, period), the Head of the inspection team must report to competent authorities to issue an Adjustment Decision for the Inspection Decision. The Adjustment Decision of the Inspection Decision is implemented according to forms No. 09/KTT, 10/KTT, 11/KTT issued with appendix I of Circular 80/2021/TT-BTC.

- tax audit record

+ Upon completion of the tax audit at the enterprise's premises, the inspection team drafts the tax audit record following form No. 12/KTT issued with appendix I of Circular 80/2021/TT-BTC and publicly announces it before the inspection team and the enterprise for comments, explanations. Comments, explanations from the enterprise must be retained with the draft minutes (if any). The public announcement of the draft tax audit record is prepared according to form No. 13/KTT issued with appendix I of Circular 80/2021/TT-BTC.

+ Comments, explanations, completion, and the signing of the tax audit record between the inspection team and the enterprise must be completed within 05 working days from the end of the inspection. If the enterprise still has comments, they are recorded in the Minutes or retained with the signed Minutes. The tax audit record must be signed by the Head of the inspection team and the enterprise (or its legal representative) on each page, with the enterprise seal if the enterprise is an organization with its own seal (including separate seals and those used across the pages of the minutes).

+ If there are unresolved issues regarding policy mechanisms requiring consultations, they are noted in the minutes. Upon receiving a response document, the inspection team or inspection section is responsible for drafting an appendix with the enterprise according to form No. 14/KTT issued with appendix I of Circular 80/2021/TT-BTC to handle according to the law.

+ If the enterprise does not sign the tax audit record at the end of the prescribed period, the Head of the inspection team must record an administrative violation report concerning the non-signing of the minutes, report to the authorized person to issue an administrative violation penalty decision according to regulations, and require the enterprise to sign the inspection minutes.

- Handling tax audit results

+ No later than 03 working days from the date of signing the tax audit record with the enterprise, the Head of the inspection team must report the inspection results to the head of the inspection department and the decision maker.

+ If the inspection results lead to tax handling or administrative violation penalties, the tax authority head issues a Tax Violation Handling Decision or must transfer the dossier to the competent authority for sanction. If the inspection does not lead to tax handling or administrative violation penalties, the decision maker issues an Inspection Conclusion following form No. 15/KTT issued with appendix I of Circular 80/2021/TT-BTC.

+ If the tax audit reveals tax violation behaviors indicating tax evasion or fraud, within 05 working days from the end of the inspection, the inspection team is responsible for reporting to the tax authority head for consideration of conducting an inspection or transferring the inspection dossier to investigation authorities as per the legal regulations.

+ Procedures and time limits for issuing Tax Violation Handling Decisions, transferring the dossier to the competent authorities for sanction, or transferring the inspection dossier to investigation authorities are implemented following the legal regulations on administrative penalty for tax and invoice violations.

- Inspection at the enterprise's premises is recorded electronically.