What are guidelines on developing sets of indicators of risk management to tax administration in Vietnam according to Decision 18/QD-TCT?

What are guidelines on developing sets of indicators of risk management to tax administration in Vietnam according to Decision 18/QD-TCT?

Based on Article 7, Contents of the Procedure issued together with Decision 18/QD-TCT in 2023, the guidelines for developing sets of indicators of risk management to tax administration are as follows:

Step 1 – Determine the objectives and requirements to develop and establish the sets of indicators.

(1) Building and establishing the sets of indicators based on the plan:

- In the fourth quarter of every year, the Risk Management Board drafts a plan to build, amend, and supplement the sets of indicators based on the evaluation report of risk management application in tax management, the report assessing the implementation of the compliance enhancement plan, and the requests from units to meet tax management requirements.

- Notify the plan to build, amend, and supplement the sets of indicators to specialized units requesting participation in comments to form a basis for reporting to the General Department of Taxation for approval and task assignment.

(2) Building and establishing the sets of indicators based on the occasion:

- The establishment of the sets of indicators based on the occasion is to promptly analyze risk signs, and risk warnings for tax management as proposed by Departments/Units, and Tax Departments.

- The Risk Management Board receives information, risk signs, risk control plans, and a high-priority list of risky taxpayers (if any) as proposed by Departments/Units, Tax Departments. If it is necessary to apply immediately to mitigate high risks, the Risk Management Board submits to the General Department of Taxation for adjustment to the sets of indicators beyond the plan.

Step 2 – Develop the sets of indicators.

Based on the approved plan for constructing, adjusting, and supplementing the sets of indicators, the Risk Management Board implements:

- Draft the framework of the sets of indicators to be used in data analysis and risk management or request the Information Technology Department to provide data coordination to analyze the materiality of the criteria index, determining the risk levels of each criterion.

- Collect opinions from Departments/Units, and Tax Departments on the content, risk levels, and materiality of the sets of indicators.

- Summarize and submit to the General Department for the issuance of the sets of indicators as regulated.

Step 3 – Implement the sets of indicators on data analysis and risk management applications.

- The Risk Management Board cooperates with the Information Technology Department to establish the sets of indicators on data analysis and risk management application.

- During the application of the sets of indicators, if it is necessary to adjust scores or weight of criteria to suit management demands, based on the specific times, the Risk Management Board consolidates suggestions, presents them to the General Department of Taxation for approval, and cooperates with the Information Technology Department to establish on data analysis and risk management application to evaluate risks and classify taxpayers.

What are guidelines on developing sets of indicators of risk management to tax administration in Vietnam according to Decision 18/QD-TCT? (Image from the Internet)

What are procedures for assessing, classifying the compliance level of Tax Laws and tax risk in Vietnam?

Based on point đ clause 1 Article 8, Contents of the Procedure issued together with Decision 18/QD-TCT in 2023,

the evaluation of taxpayers' compliance with tax laws and the classification of taxpayer risk levels are conducted as follows:

First: Assess the compliance level of taxpayers with tax laws.

Second: Classify the overall risk level of taxpayers.

Third: Classify the risk level in tax management operations.

What are principles for assessing and classifying the compliance level of Tax Laws and tax risk in Vietnam?

Based on clause 1 Article 8, Contents of the Procedure issued together with Decision 18/QD-TCT in 2023, the principles for assessing and classifying the compliance level of tax laws and classifying the taxpayer risk levels are explicitly stated:

- The evaluation of taxpayers' compliance with tax laws and the classification of taxpayer risk levels are conducted automatically using information technology applications based on the sets of indicators and evaluation methods issued by the General Department of Taxation.

- The evaluation of the compliance level of taxpayers with tax laws is conducted for all taxpayers.

- Depending on tax management requirements, each segment of taxpayers or each category of taxpayers will be classified by the overall risk level and may be classified according to tax management operations.

- Regarding classification of risk levels in tax management operations: Depending on tax management requirements, periodic classification based on a number of times within a year, either once or multiple times, such as in planning inspection and examination at taxpayers’ headquarters; or periodic classification on a monthly, quarterly basis and immediate classification upon arising cases (such as tax refund operations).