What are regulations on elimination of duplications in tax audit at the taxpayer’s premises in Vietnam?

What are cases where a tax audit is carried out at the taxpayer's premises in Vietnam?

Based on Clause 1, Article 110 of the 2019 Law on Tax Administration, tax audit at the taxpayer's premises is prescribed in the following cases:

- In the case where the dossier is subject to inspection before tax refund; post-refund inspection for dossiers subject to prior tax refund;

- Cases prescribed at Point b, Clause 2, Article 109 of the 2019 Law on Tax Administration:

+ Where the tax dossier contains content that needs clarification related to the tax payable, tax exempted, tax reduced, tax to be carried forward, tax refunded, tax not collected, the tax administration agency requires the taxpayer to provide explanation or supplement information, documents.

In cases where the taxpayer has explained and submitted documents proving that the declared tax amount is correct, the tax dossier will be accepted; if there is insufficient basis to prove that the declared tax amount is correct, the tax administration agency requires the taxpayer to amend the declaration.

+ If the taxpayer does not provide explanations, supplement information, or amend tax declarations within the deadline set by the tax administration agency, or if the explanation and amended declarations are incorrect, the head of the tax administration agency shall decide the tax amount to be paid or issue a decision to inspect taxes at the taxpayer's premises or base on it to develop inspection, audit plans according to risk management principles in tax administration.

- Post-clearance inspection at the premises of the customs declarant according to customs law regulations;

- In cases where there are signs of legal violations;

- Selected cases based on planning or special subjects;

- Cases recommended by the State Audit, Government Inspectorate, or other competent agencies;

- In cases of division, separation, merger, consolidation, transformation of business types, dissolution, business cessation, equitization, termination of the tax code, change of business location, and unusual inspections or inspections at the direction of competent authorities, except for cases of dissolution, cessation of activities where the tax authority does not have to perform tax finalization as prescribed by law.

What are regulations on elimination of duplications in tax audit at the taxpayer’s premises in Vietnam?

Based on Clause 3, Article 72 of Circular 80/2021/TT-BTC, the handling of duplication in tax audit at the taxpayer’s premises is as follows:

- In cases where inspection subjects of lower-level tax authorities overlap with the inspection, audit plans of the State Inspectorate, State Audit, or superior tax authorities, the inspection plan of the State Inspectorate, State Audit, and superior tax authorities will be followed;

- If there is duplication of inspection subjects between the tax authority's inspection plan and other state agencies, the head of the tax authority shall cooperate with the head of the overlapping state agency to handle the situation and report to the agency approving the plan when necessary.

What is the procedure for tax audit at the taxpayer's premises in Vietnam?

Based on Clause 5, Article 72 of Circular 80/2021/TT-BTC, the procedure for tax audit at the taxpayer's premises is as follows:

- Issuance of tax audit Decision

+ The tax authority issues a tax audit decision for cases specified in Article 110 of the 2019 Law on Tax Administration. tax audits at the taxpayer's premises are only conducted when a tax audit decision is issued at the taxpayer’s premises.

+ The tax authority issues a tax audit decision for the content and period at risk, except for tax refund checks. The tax audit decision is made following form No. 04/KTT issued with Appendix 1 of Circular 80/2021/TT-BTC.

+ The inspection period is determined as prescribed in Clause 4, Article 110 of the 2019 Law on Tax Administration. In case of extension, the Head of the inspection team reports to the competent authority to issue an extension decision following form No. 05/KTT issued with Appendix 1 of Circular 80/2021/TT-BTC.

- The inspection according to the tax audit Decision must be conducted no later than 10 working days from the issuance date of the tax audit Decision, except in cases where the tax audit Decision must be annulled according to form No. 06/KTT issued with Appendix 1 of Circular 80/2021/TT-BTC or when inspection timing is postponed.

When beginning a tax audit, the Head of the tax audit team is responsible for announcing the tax audit Decision, drafting the Announcement Record, and explaining the decision content to the taxpayer for understanding and compliance. The Announcement Record of the tax audit Decision is drafted following form No. 07/KTT issued with Appendix 1 of Circular 80/2021/TT-BTC.

- If the taxpayer submits a written request to postpone the inspection, the document must clearly state the reason and postpone time, or if the tax authority has a compelling reason to delay the inspection, the tax authority must notify the taxpayer before the expiration of the decision announcement time per form No. 08/KTT issued with Appendix 1 of Circular 80/2021/TT-BTC.

- In cases where adjustments in the tax audit Decision are needed during the inspection process (changing the Head of the team, members, or adding members, content, inspection period, or reducing members, content, inspection period), the Head of the inspection team must report to the competent authority to issue a Decision to adjust the tax audit Decision. The adjustment decision is implemented according to forms No. 09/KTT, 10/KTT, 11/KTT issued with Appendix 1 of Circular 80/2021/TT-BTC.

- tax audit Record

+ After tax audit at the taxpayer's premises, the inspection team drafts the tax audit Record as per form No. 12/KTT issued with Appendix 1 of Circular 80/2021/TT-BTC and presents it publicly before the inspection team and the taxpayer for comment and explanation. The taxpayer’s comments must be retained with the draft record (if any). The public announcement record of the tax audit Draft is made following form No. 13/KTT issued with Appendix 1 of Circular 80/2021/TT-BTC.

+ Comments, explanations, finalization, and signing of the tax audit Record between the inspection team and the taxpayer must be completed within 5 working days from the inspection conclusion. If the taxpayer still has comments, they should be noted in the Record or retained with the signed Record. The inspection record must be signed on every page by the Head of the inspection team and the taxpayer (or the taxpayer’s legal representative), and stamped by the taxpayer if the taxpayer is an organization with its stamp (including private stamps, pages linked by seals).

+ If there are policy mechanism issues requiring opinions, they should be noted in the record. Upon receiving a written response, the inspection team or inspection unit must append it to the record with the taxpayer as per form No. 14/KTT issued with Appendix 1 Circular 80/2021/TT-BTC for legal compliance.

+ If the taxpayer fails to sign the tax audit Record by the deadline, the inspection team leader must draft an administrative violation record for not signing, report to the competent authority to issue an administrative penalty decision, and require the taxpayer to sign the tax audit Record.

- Handling tax audit Results

+ Within 3 working days from signing the tax audit Record with the taxpayer, the Head of the inspection team must report inspection results to the inspection leadership and the authority that issued the inspection decision.

+ If the inspection results lead to tax handling, administrative penalty imposition, the head of the tax authority issues a tax offense handling decision or transfers the case file to the competent authority for sanctioning. If the inspection results do not lead to tax handling, administrative penalties, the authority that issued the inspection decision issues an Inspection Conclusion as per form No. 15/KTT issued with Appendix 1 Circular 80/2021/TT-BTC.

+ If tax audit finds that tax violations indicate tax evasion or fraud, within 5 working days from the inspection conclusion, the inspection team reports to the head of the tax authority for auditing or transferring the inspection file to the investigation agency as prescribed by law.

- Electronic logbook records are maintained for inspections at the taxpayer's premises.