What is classification of levels of risks of taxpayers that are household businesses and individual businesses in Vietnam?

What is classification of levels of risks of taxpayers that are household businesses and individual businesses in Vietnam?

Based on Article 12 of Circular 31/2021/TT-BTC, it is stipulated as follows:

Classification of Risk Levels for taxpayers that are individuals

1. The risk level for taxpayers that are individuals is classified as follows:

a) High risk.

b) Medium risk.

c) Low risk.

2. The risk level for taxpayers that are individuals is classified based on the results of the tax law compliance assessment in Article 10 and the criteria stipulated in Annex III of this Circular.

3. Handling results of risk level classification for taxpayers that are individuals

The results of the risk level classification for taxpayers are applied in tax administration measures stipulated in Article 15 of this Circular.

Thus, the risk levels for taxpayers who are household businesses, individual businesses are classified into three types as follows:

- High risk.

- Medium risk.

- Low risk.

What are tax administration measures for high-risk household businesses aand individual businesses in Vietnam? (Image from the Internet)

What are tax administration measures for high-risk household businesses aand individual businesses in Vietnam?

Based on Article 15 of Circular 31/2021/TT-BTC, it is stipulated as follows:

Application of Risk Management for taxpayers that are individuals

Based on the list of taxpayers that are individuals classified by risk levels in Article 13 of this Circular, the tax authorities apply appropriate tax administration measures as stipulated.

1. For household businesses, individual businesses

a) High risk: Apply one or a combination of the following measures:

a.1) Review, inspect, and verify related information as a basis for reassessing the revenue, tax amount of household businesses, individual businesses;

a.2) Prepare a checklist for inspection and survey to reassess the revenue, tax amount of household businesses, individual businesses, and the tax compliance of related organizations.

b) Medium risk: Randomly select to include in the revenue survey list of household businesses, individual businesses; continue to classify risks for the next evaluation period;

c) Low risk: Keep records and continue to classify risks for the next evaluation period.

2. For individuals with taxable personal income (excluding household businesses, individual businesses)

a) High risk: Select for inspection, factual verification, and organize the implementation of inspection and verification in accordance with current regulations;

b) Medium and low risk: Keep records and continue to classify risks for the next evaluation period.

...

Thus, household businesses and individual businesses classified as high risk are subject to one or a combination of the following measures:

- Review, inspect, and verify related information as a basis for reassessing the revenue, tax amount of household businesses, individual businesses;

- Prepare a checklist for inspection and survey to reassess the revenue, tax amount of household businesses, individual businesses, and the tax compliance of related organizations.

What are measures for inspection and assessment of the implementation of risk management in tax administration in Vietnam?

Based on Article 23 of Circular 31/2021/TT-BTC, it is stipulated as follows:

Inspection and Evaluation of the Implementation of Risk Management in tax administration

1. Conduct inspection and evaluation of the following contents:

a) Quality of the organizational implementation of risk management measures and professional techniques;

b) Effectiveness and efficiency of risk management application in tax administration operations;

c) Organization and implementation results of inspection decisions, tax examination, or other professional measures based on risk management;

d) Evaluation of the effectiveness of criteria and indices for assessing tax law compliance and classifying taxpayers' risk levels.

2. Inspection and evaluation measures

a) Collate information, data reports from tax authorities at all levels, departments, units under the General Department of Taxation in implementing and applying risk management;

b) Collect, analyze, gather information on the results of risk management application in tax administration operations;

c) Organize inspection teams to inspect the implementation and application of risk management at tax authorities at all levels.

3. The General Director of the General Department of Taxation assigns the responsibility to risk management units to inspect and evaluate the implementation and application of risk management in tax administration as stipulated in Clause 2 of this Article. The evaluation is conducted regularly; periodic reporting (every 6 months and annually) and according to specific operational requirements.

Thus, measures for inspection and assessment of the implementation of risk management in tax administration include:

- Collate information, data reports from tax authorities at all levels, departments, units under the General Department of Taxation in implementing and applying risk management;

- Collect, analyze, gather information on the results of risk management application in tax administration operations;

- Organize inspection teams to inspect the implementation and application of risk management at tax authorities at all levels.