Shall the tax authority pay for delegation of tax collection from collected tax in Vietnam?

Shall the tax authority pay for delegation of tax collection from collected tax in Vietnam?

Pursuant to Article 19 of the Law on Tax Administration 2019, the authority of the tax authority is stipulated as follows:

Authority of the tax authority

1. Request taxpayers to provide information and documents related to determining tax obligations, including information about investment value; account numbers and transaction details of accounts opened at commercial banks, other credit institutions, and to explain tax calculation, tax declaration, and tax payment.

2. Request organizations and individuals related to the taxpayer to provide information and documents related to determining tax obligations and cooperate with the tax authority to implement tax laws.

3. Conduct tax audits and inspections in accordance with the law.

4. Assess taxes.

5. Enforce administrative decisions on tax management.

6. Impose administrative sanctions related to tax management as per authority; publicize on media cases of tax law violations.

7. Apply preventive measures and ensure handling of administrative violations in tax management as per the law.

8. Delegate to agencies, organizations, or individuals the collection of certain types of taxes as stipulated by the Government of Vietnam.

9. Allow the tax authority to apply advance pricing agreements with taxpayers, with foreign tax authorities, or territories with which Vietnam has signed an agreement to avoid double taxation and prevent tax evasion on income tax.

10. Purchase information, documents, and data from domestic and foreign suppliers to serve tax management work; pay for delegation of tax collection from collected tax or from the tax authority's budget as stipulated by the Government of Vietnam.

Therefore, according to the regulation mentioned above, it can be concluded that the tax authority can pay collection outsourcing costs from the collected tax revenue as stipulated by the Government of Vietnam.

Shall the tax authority pay for delegation of tax collection from collected tax in Vietnam? (Image from the Internet)

When shall the tax authority delegate tax collection in Vietnam?

Pursuant to Clause 1, Article 39 of Decree 126/2020/ND-CP regarding delegation of tax collection and other state budget revenues managed by the tax authority as follows:

Delegation of tax collection and other state budget revenues managed by the tax authority

1. Cases of delegation of tax collection

a) The tax authority delegates to organizations, or state management agencies for collecting taxes and other state budget revenues related to individuals, households, and business households.

b) Other cases as decided by the Minister of Finance.

The tax authority can delegate tax collection in the following cases:

- The tax authority delegates to organizations or state management agencies for collecting taxes and other state budget revenues related to individuals, households, and business households.

- Other cases as decided by the Minister of Finance.

What are the 3 principles for delegating tax collection in Vietnam?

Pursuant to Clause 2, Article 39 of Decree 126/2020/ND-CP, the delegation of tax collection is carried out according to the following principles:

- The General Director of the General Department of Taxation, the General Director of the General Department of Customs, based on the proposal of the Tax Department, Customs Department, will issue a decision on delegation of collection specifying key contents such as collection delegation area, type of taxes and other state budget revenues for delegation, delegation budget.

- Delegation of collection is conducted through a Collection Delegation Contract, Collection Delegation Contract Addendum (if any) between the tax authority and the delegated party, except for cases not required to have a Collection Delegation Contract as stipulated by the Ministry of Finance.

In cases of delegation to several Customs Departments, the General Director of the General Department of Customs signs a collection delegation contract with the head of the organization delegated to collect taxes and other state budget revenues in the customs domain.

- The tax authority and the delegated party must jointly construct an inter-connected information technology system to ensure the transmission and receipt of electronic data as prescribed by law on electronic transactions in tax management.

The Ministry of Finance guides on the transmission and receipt of data between the tax authority and the delegated party.

How does the tax authority ensure taxpayer information confidentiality?

Pursuant to Article 99 of the Law on Tax Administration 2019 concerning the protection of taxpayer information by the tax authority:

- The tax authority, tax administration officials, individuals who were tax administration officials, agencies providing or exchanging taxpayer information, and organizations providing tax procedure services must keep taxpayer information confidential as required by law, except for cases stipulated in Clause 2 of this Article and Article 100 of the Law on Tax Administration 2019.

- To facilitate proceedings, inspections, audits upon written request, the tax authority is responsible for providing taxpayer information to the following agencies:

+ Investigation agencies, Procuracies, Courts;

+ State inspectors, State audits;

+ Other state management agencies as prescribed by law;

+ Foreign tax administration agencies in accordance with international tax treaties of which the Socialist Republic of Vietnam is a member.