What are the cases of imposition of tax liability on exports and imports in Vietnam?

What are the cases of imposition of tax liability on exports and imports in Vietnam?

According to Clause 1, Article 52 of the Tax Administration Law 2019, customs authorities shall impose tax liability on exports and imports in the following cases:

- The declarant declares tax according to illegal documents; fails to declare or accurately and fully declare information serving tax calculation;

- The declarant fails to provide, refuses to provide or delays providing accounting books, documents and data relevant to tax calculation;

- The declarant fails to prove, explain or fails to explain in the tax calculation as prescribed by law; fails to comply with the customs authority’s inspection decision;

- The declarant fails to record or fully and accurately record data on the accounting books to calculate tax;

- The customs authority has evidence to that the declared value is false;

- The transaction is falsely carried out in a manner that affects the amount of tax payable;

- The declarant fails to calculate the amount of tax payable themselves;

- Other cases of unconformable tax declaration discovered by customs authorities.

What are the cases of imposition of tax liability on exports and imports in Vietnam? (Image from the Internet)

Who has the power to impose tax liability on exports and imports in Vietnam?

According to Clause 7, Article 17 of Decree 126/2020/ND-CP, the power to impose tax liability on exports and imports in Vietnam includes:

+ The Director of the General Department of Customs,

+ Directors of Provincial Customs Departments,

+ Directors of Post-customs Clearance Inspection Departments and

+ Directors of district-level customs departments.

What is the basis for tax liability imposition in Vietnam?

According to Article 15 of Decree 126/2020/ND-CP, the basis for tax liability imposition is as follows:

(1)  Imposition of separate elements of taxation:

- In one of the following cases, separate elements of taxation shall be imposed:

+ Through inspection of the tax declaration dossier, the tax authority suspects that the taxpayer does not fully or accurately declare certain elements of taxation and fails to supplement or fully and accurately supplement the declaration as requested by the tax authority.

+ Through inspection of accounting books, invoices and relevant documents of the taxpayer or relevant organizations or individuals, the tax authority is able to prove that the taxpayer does not accurately or truthfully record certain elements of taxation.

+ The taxpayer records false selling prices for goods and services and in order to reduce the taxable revenue; records false buying prices for goods serving business operation in order to increase the amount of VAT deductible or reduce tax payable.

+ The taxpayer has submitted the tax declaration dossier but is not able to determine the elements of taxation, or has determined the elements of taxation but not able to calculate tax payable themselves.

+ One of the cases specified in Clauses 10, 11, 12 Article 14 of Decree 126/2020/ND-CP.

- Basis for tax liability imposition

+ For taxpayers that are organizations:

The tax authority’s database and trade database; documents and effective inspection verdicts; verification results; minimum average tax payable of 03 local business establishments selling the same commodities or having the same business lines and scale. In case such business establishments are not available or are available but information about their commodities, business lines or scale is inadequate, information about business establishments in other areas may be used.

+ For individuals transferring real estate; receiving real estate as inheritance or gift

The taxable price will be imposed by the tax authority according to market price if the taxable price declared by the individual is lower than market price. The taxable price imposed by the tax authority must not be lower than the applicable price imposed by the People’s Committee of the province.

- The tax authority shall impose tax liability on the basis of separate elements in accordance with effective tax laws.

(2). Imposition of proportional tax on revenue:

- Organizations paying VAT using the subtraction method; individual businesses paying taxes using the declaration method shall have proportional tax on revenue imposed in the cases specified in Clauses 1, 2, 3, 4, 5, 6, 7, 8, 9, 10 and 11 Article 14 of Decree 126/2020/ND-CP.

- Basis for proportional tax imposition

The tax authority’s database and trade database; documents and effective inspection verdicts; verification results; minimum revenue of 03 local business establishments selling the same commodities or having the same business lines and scale. In case such business establishments are not available or are available but information about their commodities, business lines or scale is inadequate, information about business establishments in other areas with the same natural and economic conditions may be used.

- The tax authority shall determine the amount of tax payable according to the imposed revenue in accordance with effective tax laws.