Which departments participate in the risk management process in tax return selection of VAT, CIT, and excise tax of taxpayers in Vietnam?

Which departments participate in the risk management process in tax return selection of VAT, CIT, and excise tax of taxpayers in Vietnam?

Based on Clause 2, Article 3 of Decision 98/QD-TCT 2024 regarding the Procedure for applying risk management in selecting VAT, CIT, and excise tax returns for examination at the tax office as follows:

Explanation of terms and abbreviations

1. In this Procedure, the following terms are understood as follows:

- Criterion index: These are information indicators that carry the value of criteria to help recognize and classify the level of risk. Criterion indices are specifically expressed through numbers, ratios, proportions, etc., calculated through data collection and analysis.

- Risk score: This is a specific score associated with each criterion index according to the risk level of that criterion index based on a risk scoring system.

- Weight: This is a coefficient according to the criteria, used to assess the importance of the criterion concerning the tax filer's risk evaluation results.

- Risk management application: An information technology application that connects and receives information from related data sources within and outside the tax authority, digitalizes risk management measures and techniques based on approved criteria and indices to analyze, evaluate compliance, and determine the risk level for making decisions on applying professional measures by the tax authority.

- Risk threshold: This is a specific score range issued based on the total risk score of the tax return and the number of high-risk criterion indices or the number, percentage of tax returns listed from the highest risk score to the lowest. The risk threshold is used to classify risks for all analyzed and evaluated tax returns.

- Evaluation time: The time at which the information analysis for evaluating the taxpayer's risk is performed.

- Tax Authority: Includes the General Department of Taxation of Vietnam, Tax Departments, and Tax Sub-Departments (including regional Tax Sub-Departments).

2. Departments at all levels of the tax authority involved in the process:

- Risk Management Department: The Risk Management Board under the General Department of Taxation of Vietnam, Tax Declaration - Accounting Department, and the Data Center for Large Enterprises of the Large Enterprises Tax Department. For Tax Departments and Tax Sub-Departments with multiple inspection teams, each inspection team assigns officers to serve as contact points for exploiting the risk management application for tax return selection of VAT, CIT, and excise tax with risk indications for the taxpayers under their management. Additionally, the Tax Department and Tax Sub-Department designate one inspection team as a central contact point.

- Inspection - Tax Examination Department: The Tax Inspection - Examination Department under the General Department of Taxation of Vietnam; the department assigned to the Inspection - Examination tasks of the Large Enterprises Tax Department under the General Department of Taxation of Vietnam; Tax Inspection - Examination Departments under the Tax Departments; Tax Examination Teams and Tax Management Teams in communes, wards, boroughs or Professional Tax Management Teams (in case the Tax Sub-Department has no Tax Examination Unit and Tax Management Units in communes, wards, boroughs) under the Tax Sub-Departments.

- Information Technology Department: The Information Technology Department under the General Department of Taxation of Vietnam; IT Department under the Tax Departments; IT task unit under the Tax Sub-Departments.

- Other professional units participating in the Process: Departments/units under and directly affiliated with the General Department of Taxation of Vietnam, Departments under Tax Departments, Teams/Units under Tax Sub-Departments relevant according to the assignment of the Tax Authority leadership.

...

Therefore, the departments involved in the risk management process in tax return selection of VAT, CIT, and excise tax of taxpayers consist of four main departments:

- Risk Management Department.

- Inspection - Tax Examination Department.

- Information Technology Department.

- Other professional departments participating in the Process.

Which departments participate in the risk management process in tax return selection of VAT, CIT, and excise tax of taxpayers in Vietnam? (Image from the Internet)

Collection and processing of risk management information in tax return selection of VAT, CIT, and excise tax of taxpayers in Vietnam?

Based on Article 4 of Decision 98/QD-TCT 2024 regarding the Procedure for applying risk management in selecting VAT, CIT, and excise tax returns for examination at the tax office as follows:

- The tax authority collects, updates, and processes information to ensure completeness, accuracy, and promptness before conducting risk analysis and selecting VAT, CIT, excise tax returns of taxpayers for examination at the tax authority's office.

- Information used for analysis, risk evaluation, and selection of VAT, CIT, excise tax returns of taxpayers for examination at the tax office is collected from the tax sector database, centrally managed at the General Department of Taxation of Vietnam through IT applications and processed, shared, and provided to all levels of the tax authority to perform tax administration tasks according to legal regulations.

- The tax authority and tax officials collect and process information according to the Procedure for collecting and exploiting information for risk management in tax administration issued under Decision 86/QD-TCT dated February 8, 2023, by the Director-General of the General Department of Taxation of Vietnam.

How to use the criterion index set for tax return selection of VAT, CIT, and excise tax in Vietnam?

Based on Article 5 of Decision 98/QD-TCT 2024 regarding the Procedure for applying risk management in selecting VAT, CIT, and excise tax returns for examination at the tax office as follows:

The Risk Management Board and the Information Technology Department under the General Department of Taxation of Vietnam use the risk evaluation criteria issued by the General Department of Taxation of Vietnam, integrating them into the risk management application for selecting VAT, CIT, excise tax returns for examination at the tax office as follows:

The Criterion Index Set for selecting VAT, CIT, excise tax returns with risk indications for examination at the tax office is issued according to Decision No. 1582/QD-TCT dated October 6, 2022, by the Director-General of the General Department of Taxation of Vietnam and is applied uniformly nationwide to form numbers 01/GTGT, 03/TNDN, 01/TTDB issued along with Circular No. 80/2021/TT-BTC dated September 29, 2021, by the Minister of Finance. If the aforementioned Criterion Index Set is amended, supplemented, or replaced, it shall be applied according to the amended, supplemented, or replaced Criterion Index Set.

During implementation, if the Tax Department proposes to supplement or amend criteria, criterion indices to suit tax administration work, the Tax Department shall send a document to the General Department of Taxation of Vietnam (Risk Management Board) clearly stating the reason, basis for establishing criteria indices; calculation formulas; scores, weights for each criterion, criterion index.

Based on tax administration requirements in each period, the General Department of Taxation of Vietnam issues documents amending, supplementing criterion indices. The Risk Management Board cooperates with related Departments/units/Tax Departments to research and advise the Director-General of the General Department of Taxation of Vietnam to issue supplements or adjustments to risk analysis criterion indices.

The Information Technology Department under the General Department of Taxation of Vietnam is responsible for developing and upgrading related software applications to meet the inclusion of criterion indices issued by the General Department of Taxation of Vietnam into the risk management application to analyze and evaluate the selection of VAT, CIT, excise tax returns with risk indications for examination at the tax office.