What is domestic tax accounting in Vietnam?

What is domestic tax accounting in Vietnam?

Domestic tax accounting is explained in Clause 2, Article 3 of Circular 111/2021/TT-BTC guiding the accounting of domestic tax operations as follows:

Domestic tax accounting involves the tax authorities at different levels collecting, recording, and reflecting all transactions related to taxes that the tax authorities must collect, have collected, need to collect, need to refund, have refunded, need to refund, exempt, reduce, freeze debts, and write off debts during the process of tax management operations.

What are the subjects of domestic tax accounting in Vietnam?

The subjects of domestic tax accounting are stipulated in Article 4 of Circular 111/2021/TT-BTC as follows:

Article 4. Subjects of tax accounting

1. Receivables, amounts collected, amounts yet to be collected on taxes: Reflecting the tax amounts that the tax authorities must collect, have collected, need to collect from taxpayers or organizations authorized by the tax authorities to collect.

2. Refunds, amounts refunded, amounts yet to be refunded: Reflecting the tax amounts that the tax authorities must refund, have refunded, need to refund to taxpayers or organizations authorized by the tax authorities to refund.

3. Tax exemption, reduction, debt freezing, debt write-off: Reflecting the tax exemption, reduction, debt freezing, and debt write-off carried out by the tax authorities.

Thus, the subjects of domestic tax accounting include:

[1] Receivables, amounts collected, amounts yet to be collected on taxes;

[2] Refunds, amounts refunded, amounts yet to be refunded;

[3] Tax exemption, reduction, debt freezing, debt write-off.

What is domestic tax accounting in Vietnam? (Image from the Internet)

What are the scopes and tasks of domestic tax accounting in Vietnam?

The scope and tasks of domestic tax accounting are specified in Article 5 of Circular 111/2021/TT-BTC as follows:

[1] Scope of tax accounting in the organization of tax management activities by the tax authorities

Tax accounting is one of the tax management functions of the tax authorities, utilizing the results from other completed tax management operations to perform tax accounting tasks as prescribed in Article 6 of Circular 111/2021/TT-BTC, which include:

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

- Recording tax accounting data, which is done automatically by the Tax Accounting Subsystem, to record input information for tax accounting and tax accounting documents as per Clause 1, Article 6 of Circular 111/2021/TT-BTC to account for tax accounting and reflect tax management operations arising during the tax accounting period, including opening, recording, closing, and correcting tax accounting books as prescribed in Section 3, Chapter II of Circular 111/2021/TT-BTC.

- Preparing tax accounting reports, which is done automatically by the Tax Accounting Subsystem or by officials in charge of tax accounting to summarize tax management results of the tax authorities at different levels (including tax receivables, amounts collected, amounts yet to be collected, amounts to refund, amounts refunded, amounts yet to be refunded, exemptions, reductions, debt freezes, debt write-offs) as prescribed in Section 4, Chapter II of Circular 111/2021/TT-BTC.

- Storing and providing tax accounting information and documents as prescribed in Article 9 of Circular 111/2021/TT-BTC.

[2] Tasks of tax accounting

- Collect input information for tax accounting and prepare tax accounting documents as prescribed in Section 1, Chapter II of Circular 111/2021/TT-BTC to record tax accounting data.

- Reconcile and verify accounted data ensuring alignment with input information originating from relevant tax management records related to tax accounting.

- In case of errors in tax accounting, identify the causes and require handling as prescribed in Article 14 of Circular 111/2021/TT-BTC and Article 16 of Circular 111/2021/TT-BTC.

- Store, manage, and provide tax accounting information and documents as prescribed in Article 9 of Circular 111/2021/TT-BTC.

- Provide honest, complete, and prompt tax accounting information and documents as required by accounting and tax management law.

- Tax accounting tasks are performed automatically by the Tax Accounting Subsystem or by officials in charge of tax accounting according to their functions, duties, and authority within the Tax Accounting Subsystem.

[3] Tasks of tax management functional departments at tax authorities at different levels when performing tax management operations

- Process tax management records as per the tax management processes issued by the General Director of General Department of Taxation, ensuring complete, accurate, prompt information.

- Monitor and control the processing of tax management records on the Tax Management Application System as per the regulations issued by the General Director of General Department of Taxation.

- Responsible for the completeness, accuracy, and promptness of the information provided for tax accounting input as prescribed in Article 12 of Circular 111/2021/TT-BTC.

- Reconcile and review data in tax management records and tax management information with taxpayers to ensure completeness, accuracy, and promptness.

- In cases of errors or adjustments in tax management records related to tax accounting affecting tax accounting information, handle and adjust promptly as prescribed.