What is the current tax audit procedure in Vietnam?

What is the purpose of a tax audit in Vietnam?

According to Section 1, Part 1 of the Tax Audit Procedures of Decision 970/QD-TCT 2023, the purpose of a tax audit is as follows:

- Strengthening the tax audit work according to the provisions of the Tax Administration Law based on the application of risk management mechanisms and information technology in tax audits to promptly detect, prevent, and handle tax violations, and avoid tax loss.

- Enhancing taxpayers' voluntary compliance with tax laws in implementing tax legislation.

- Implementing administrative reforms in tax audits, facilitating taxpayers in developing the production, trading of goods, and services.

What is the current tax audit procedure in Vietnam? (Image from the Internet)

What is the current tax audit procedure in Vietnam?

According to Subsection 2, Section 3, Part 2 of the Tax Audit Procedures of Decision 970/QD-TCT 2023, the selection of enterprises to be included in the audit plan at the enterprise headquarters will be based on the risk ranking results from high to low, and consideration will be given to selecting enterprises that have not been audited or inspected for over 5 years.

The tax audit at the taxpayer's headquarters includes two stages. To be specific:

Stage 1: Preparation for audit at the taxpayer's headquarters:

- Issuing the Audit Decision

- The tax audit decision at the taxpayer's headquarters must be sent to the taxpayer no later than 3 (three) working days from the date the decision is issued.

In cases where the tax authority or non-direct management unit conducts the audit, one copy of the audit decision must be sent to the tax authority or direct management unit to relay to relevant units.

- Before announcing the Audit Decision, the head of the audit team must assign tasks to team members to carry out specific tasks as stated in the Audit Decision using Form No. 07/QTKT issued together with the tax audit procedures.

- Revoke the Audit Decision; postpone the audit; temporarily suspend the audit; and adjust the audit decision when it is proven that the declared tax amount is correct and the full tax amount has been paid.

- In cases where the taxpayer is still operating normally and continues to file tax returns, but the taxpayer does not receive the Audit Decision, or deliberately avoids compliance with the Audit Decision, the audit team shall prepare a violation record as stipulated in Article 15 of Decree 125/2020/ND-CP;

Based on the administrative violation record of the taxpayer's non-compliance with the tax audit, the audit team shall report to the person who issued the Audit Decision to impose administrative penalties, apply tax management measures (if any), and proceed with tax determination steps as stipulated in Articles 14, 15, and 16 of Decree 126/2020/ND-CP.

The administrative violation record shall be created, and if the violator or representative of the violating unit is not present or deliberately avoids signing, or due to objective reasons does not sign the record, the record must be signed by a representative of the local government where the violation occurred or by at least one witness to confirm.

In cases where there is no confirmation from the government or witnesses, the reason must be clearly stated in the record.

Stage 2: Conducting the audit at the taxpayer's headquarters:

- Announcing the tax audit decision

- Conducting the audit at the taxpayer's headquarters.

- Preparing the tax audit report.

- Processing the audit results at the taxpayer's headquarters.

- Logging the audit diary.

- Supervising the audit team.

- Monitoring and urging the implementation of post-audit results.

- If the data and information technology application of the tax authority and taxpayers meet the requirements for working electronically and online, the audit team and taxpayers can conduct the audit electronically, online, or combine different working methods during the audit at the taxpayer's headquarters (i.e., working directly at the taxpayer's headquarters, electronically, or online).

The audit team and taxpayers are encouraged to work electronically and online.

What are the rights and obligations of taxpayers during an audit at the taxpayer's headquarters?

According to Article 111 of the Tax Administration Law 2019, the rights and obligations of taxpayers during an audit at the taxpayer's headquarters are as follows:

- Taxpayers have the following rights:

+ Refuse the audit if there is no tax audit decision;

+ Refuse to provide information and documents not related to the audit content; confidential state information and documents, except where otherwise provided by law;

+ Receive the tax audit report and request explanations of its content;

+ Reserve opinions in the tax audit report;

+ File complaints, lawsuits, and claim damages as prescribed by law;

+ Report violations of the law during the audit process.

- Taxpayers have the following obligations:

+ Comply with the tax audit decision of the tax administration authorities;

+ Promptly and fully provide accurate information and documents related to the audit content as requested by the audit team; be legally responsible for the accuracy and truthfulness of the provided information and documents;

+ Sign the tax audit report within 5 working days from the end of the audit;

+ Comply with the recommendations in the tax audit report, conclusions, and decisions on handling audit results.