Vietnam: Is tax liability imposed when failing to present accounting books?

Vietnam: Is tax liability imposed when failing to present accounting books?

Pursuant to the provisions of Article 14 of Decree 126/2020/ND-CP, taxpayers in the following situations can have their payable tax amounts determined by the tax authority:

- No taxpayer registration as stipulated in Article 33 of the Tax Administration Law 2019.

- Failure to file a tax return or inaccurate, incomplete, or untruthful tax declaration as stipulated in Article 42 of the Tax Administration Law 2019.

- Failure to submit additional tax documents as requested by the tax management authority, or submission of tax files without complete, truthful, or accurate tax basis information needed to determine payable taxes.

- Failure to reflect or misrepresentation of figures in the accounting books to determine tax obligations.

- Failure to present accounting books, invoices, documents, and necessary materials related to determining elements that form the tax calculation basis; failure to determine the payable tax amount within the regulated timeline or after the conclusion of tax inspections or audits at the taxpayer's premises.

- Non-compliance with tax inspection decisions within 10 working days from the decision date, except where an extension is granted.

- Non-compliance with tax audit decisions within 15 days from the decision date, except where an extension is granted.

- Buying, selling, exchanging, and accounting the value of goods and services not according to normal market transaction values.

- Purchasing, exchanging goods, services using unauthorized invoices or improper use of invoices, even if the goods, services are real as determined by investigative, audit, or inspection authorities and have declared revenue, expense for tax calculation.

- Signs of evasion or dispersing of assets to avoid tax obligations.

- Conducting transactions not aligned with economic substance, not consistent with actual occurrences intending to reduce taxpayer obligations.

- Non-compliance with declaration obligations, transfer pricing, or failing to provide information as required for tax control of enterprises with related party transactions.

Thus, under the above regulations, failing to present accounting books related to determining factors as tax calculation grounds will result in a tax liability imposition by the tax authority.

Vietnam: Is tax liability imposed when failing to present accounting books? (Image from the Internet)

Does the Director of the General Department of Taxation of Vietnam have the authority to issue tax liability imposition decisions?

According to the provisions of Clause 1, Article 16 of Decree 126/2020/ND-CP regarding this matter:

Authority, Procedures, tax liability imposition Decision

1. Authority to assess tax

The Director of the General Department of Taxation of Vietnam; Directors of Tax Departments; Heads of Tax Branches have the authority to assess tax.

...

The following individuals have the authority to assess tax:

- Director of the General Department of Taxation of Vietnam

- Director of a Tax Department

- Head of a Tax Branch

Thus, the Director of the General Department of Taxation of Vietnam is one of the three individuals with the authority to assess tax.

What are regulations on tax liability imposition decision of tax authorities of Vietnam?

Based on Clause 3, Article 16 of Decree 126/2020/ND-CP concerning tax liability imposition decisions by the tax authority:

Authority, Procedures, tax liability imposition Decision

...

3. tax liability imposition decision

a) When assessing tax, the tax authority must issue a tax liability imposition decision according to Form No. 01/ADT in Appendix III enclosed with this Decree, and simultaneously provide the taxpayer with the decision within 3 working days from signing the tax liability imposition decision;

If the taxpayer is obligated to pay tax according to the tax authority's notification, then the tax authority is not required to issue a tax liability imposition decision under this clause.

b) The taxpayer must pay the assessed tax amount in accordance with the tax authority's decision. If the taxpayer disagrees with the tax amount assessed by the tax authority, they must still pay that tax and have the right to request an explanation from the tax authority or file complaints and lawsuits regarding the tax liability imposition.

The tax authority's tax liability imposition decision is carried out using Form No. 01/ADT Download here.

Thus, when assessing tax, the tax authority must issue a tax liability imposition decision as stipulated above, and provide the taxpayer with it within 3 working days from the signing date of the tax liability imposition decision;

- If the taxpayer is subject to tax payments according to the tax authority's notification, the tax authority is not required to issue a tax liability imposition decision under this clause.

- The taxpayer must pay the assessed tax amount as per the tax authority's decision.

In case the taxpayer disagrees with the tax amount assessed by the tax authority, they must still pay that tax and have the right to request an explanation or file complaints and lawsuits regarding the tax liability imposition.

Moreover, the tax liability imposition is executed according to the procedures in Clause 2, Article 16 of Decree 126/2020/ND-CP on tax liability imposition procedures as follows:

- When assessing tax, the tax authority informs the taxpayer in writing about the tax liability imposition and issues a tax liability imposition decision. The decision must clearly state the reasons, basis, amount of tax assessed, and the deadline for tax payment.

- If the tax authority conducts tax liability imposition through tax inspections or audits, the reasons, basis, amount of tax assessed, and the deadline for tax payment must be recorded in the tax inspection, audit minutes, and the tax handling decision by the tax authority.

- If the taxpayer is assessed under the regulations, the tax authority imposes administrative penalties and calculates late payment interest according to the law.