What are regulations on IT application in tax accounting in Vietnam?

What is tax accounting?

According to Clause 2, Article 3 of Circular 111/2021/TT-BTC, tax accounting is the activity conducted by tax authorities at all levels to collect, record, and reflect the entirety of tax liabilities arising, collected, outstanding, refundable, refunded, and liberated by the tax authority. It also includes tax exemptions, reductions, debt suspension, and debt write-off during the tax management operations.

According to Article 4 of Circular 111/2021/TT-BTC, the objects of tax accounting include the following:

- Receivables, collected, and outstanding tax amounts: Reflect the tax amounts that tax authorities must collect, have collected, or still need to collect from taxpayers or organizations appointed by the tax authorities for collection.

- Refundable, refunded, and outstanding amounts for tax refunds: Reflect the tax amounts that tax authorities must refund, have refunded, or still need to refund to taxpayers or organizations appointed by the tax authorities for collection.

- Tax exemptions, reductions, debt suspensions, and debt write-offs: Reflect tax amounts that are exempted, reduced, suspended, or written off by the tax authorities.

What are regulations on IT application in tax accounting in Vietnam? (Image from the Internet)

What is the content of tax accounting work in Vietnam?

According to Article 6 of Circular 111/2021/TT-BTC, the content of tax accounting work is specified as follows:

Tax accounting work is one of the tax management functions conducted continuously and systematically by tax authorities at all levels according to tax management process procedures on the Tax Management System, which includes the Tax Accounting Subsystem. The tax accounting work includes the following tasks:

- Collecting input information for tax accounting, and preparing tax accounting documents

+ Collecting input information for tax accounting is an automated task conducted by the Tax Accounting Subsystem linked to the taxpayer obligation management subsystem according to provisions in Articles 12, 13, 14, and 15 Circular 111/2021/TT-BTC to fully determine the accounting content of each tax accounting account.

+ In cases where tax accounting entries are made without the input information collection process of the Tax Accounting Subsystem, the official performing tax accounting prepares tax accounting documents following the provisions in Article 16 Circular 111/2021/TT-BTC.

- Recording tax accounts is a task conducted automatically by the Tax Accounting Subsystem to record tax accounting input information and tax accounting documents mentioned in Clause 1 of this Article, to post tax accounting activities reflecting tax management operations that arise during the tax accounting period, including opening, recording, closing, and correcting tax accounting books according to the regulations in Section 3, Chapter II Circular 111/2021/TT-BTC.

- Preparing tax accounting reports is a task conducted automatically by the Tax Accounting Subsystem or by officials performing tax accounting to summarize the results of tax management activities of tax authorities at all levels (including tax amounts to be collected, collected, outstanding, refundable, refunded, outstanding, exempted, reduced, debt suspended, and debt written off) as per regulations in Section 4, Chapter II Circular 111/2021/TT-BTC.

- Storing and providing tax accounting information and documents are tasks conducted according to the provisions of Article 9 Circular 111/2021/TT-BTC.

What are regulations on IT application in tax accounting in Vietnam?

Based on Article 11 of Circular 111/2021/TT-BTC, the regulations on IT application in tax accounting are as follows:

- Tax accounting work is performed based on IT application and automatic processing with a centralized tax accounting database at the General Department of Taxation, starting from collecting tax accounting input information, preparing tax accounting documents, processing tax accounting input information, and tax accounting records, reporting tax accounting; ensuring consistency, aligning with tax management procedures, national budget management; and having the ability to integrate, exchange information with other tax management application systems within the taxation sector.

- The tax accounting subsystem specified in Clause 7, Article 3 Circular 111/2021/TT-BTC is an application set up on the TMS to execute the tax accounting work of the tax sector according to the provisions of Circular 111/2021/TT-BTC, including the collection of input information for tax accounting, tax accounting document processing, tax accounting recording, and preparing taxation accounting reports for tax authorities.

- Specific requirements for the Tax Accounting Subsystem:

+ Must ensure full compliance with accounting law, tax management law, state budget law, and electronic transaction law.

+ Must be capable of being upgraded, modified, and supplemented in accordance with law changes related to tax accounting tasks, tax accounting content, tax accounting methods without affecting the existing database.

+ Automatically handle, store data following accounting requirements, as well as computation methods for indicators on tax accounting reports as per current regulations; ensure consistency and avoid duplication among accounting figures; possess forecasting, detection, and error-prevention capabilities during data entry and tax accounting information processing.

+ Must ensure information security and data safety, with the ability to grant access rights to each user based on assigned functions and tasks; track user access times, actions, updated content, and data changes; retain traces of corrections in tax accounting records; and have the ability to recover accounting data and information in case of technical failures.

+ Data processing principles for tax accounting on IT applications in tax accounting operations must comply with regulations from this Circular and the authorized written regulations of the Director General of the General Department of Taxation. When new tax accounting activities arise, proper, comprehensive guidance documents must be promptly issued for unified implementation across the tax sector; simultaneously, update the accounting operational guidance documents, usage documents synchronously within the Tax Accounting Subsystem.

+ The General Department of Taxation manages the centralized IT application system for tax accounting operations, controls permission usage, data confidentiality on tax accounting consistent with the functions, tasks, and powers of the tax accounting apparatus within tax authorities at all levels.

+ Tax officials entering or querying tax accounting data from the tax accounting database must comply strictly with assigned functions, tasks, and powers, or have the approval of authorized personnel; use the correct name, user account, and security code provided for data processing and querying; periodically or incidentally change the security code. When there's a task change, notify the application administration to adjust data access rights in line with new assigned functions. The application administration must revoke IT application system access rights from officials no longer related to tax accounting functions.

- The Tax Accounting Subsystem must ensure automation, linkages with tax management operation subsystems, directly with the taxpayer obligation management subsystem. The Tax Accounting Subsystem must fully, accurately, truthfully compile input information from data provided by the taxpayer obligation management subsystem; provide query and access capabilities to the source of tax accounting input information linked to taxpayer obligation management information and tax management case records stored in taxpayer obligation management and tax management operation subsystems.