What is the promotion of tax administration for insurers by Tax Departments in Vietnam about?
What is the promotion of tax administration for insurers by Tax Departments in Vietnam about?
Under Official Dispatch 910/TCT-TTKT 2024 on the promotion of tax administration for insurers, the Ministry of Finance has recently issued Official Dispatchs on the promotion of the inspection and supervision of activities in the insurance market.
Therefore, to continue the promotion of tax administration for insurers, The General Department of Taxation in Vietnam proposes the Tax Departments to implement the following contents:
- Review and statistics of insurers and their branches under their management.
On that basis, implement the principle of risk management in tax administration to inspect documents at the tax authorities according to regulations; in case of detecting risks, inspect and audit at taxpayers' offices according to regulations;
- Assign focal units in charge of expertise to conduct research, deploy, monitor, and manage insurers and their branches, and continue directing the promotion of propaganda work for these insurers.
- Coordinate closely with relevant authorities to implement strict management of insurers and their branches to minimize risks in tax administration.
In case, through the inspection and audit, if violations related to tax laws of organizations and individuals are found and organizations and individuals show signs of crime, the dossier shall be transferred to the competent authorities for handling by the provisions of law.
- Large Enterprise Tax Department, Hanoi City Tax Department, and Ho Chi Minh City Tax Department continue to take prescribed measures to definitively resolve recommendations at the inspection conclusion of the Ministry of Finance (Insurance Supervision and Management Department) for insurers; at the same time, continue to review other insurers in the area under management to handle under the provisions of law.
- During the implementation process, the Tax Departments continue to perform well in the coordination work in the tax administration process for insurers and their branches.
In Vietnam, what is risk management in tax administration?
Under Clause 15, Article 3 of the Law on Tax Administration 2019, “risk management in tax administration” means the systematic application of provisions and professional procedures to determine, evaluate and categorize the risks that may have negative impacts on the efficiency and validity of tax administration, providing a basis for tax authorities to reasonably allocate resources and apply effective management measures.
What are the rules for risk management in tax administration in Vietnam?
According to Article 4 of Circular 31/2021/TT-BTC on the application of risk management in tax administration, the risk management rules are specified as follows:
- The application of risk management is aimed to ensure the validity and efficiency of tax administration activities; encourage and facilitate taxpayers’ voluntary compliance with regulations and laws on taxation and tax administration as well as prevent, detect and promptly take actions against regulations and laws on taxation and tax administration.
- Risk management information is collected from information sources within and outside tax authorities (including foreign information sources) in accordance with regulations of law; is mainly managed at the General Department of Taxation through the information technology system and shall be processed, shared and provided for tax authorities at all levels and other regulatory authorities to serve their performance of tax administration tasks in accordance with regulations of law.
- Assessment and classification of taxpayers’ compliance and risks shall be automatically and periodically carried out by adopting one or some of the methods specified in Circular 31/2021/TT-BTC in accordance with regulations of law, tax administration procedures and measures, and based on the taxpayer segmentation and criteria specified in Circular 31/2021/TT-BTC and taxpayer database.
- Based on results of compliance assessment, classification of taxpayer risks, information available on tax administration applications of tax authorities, signs of violations, and other signs of risks available at the decision-making time, tax authorities shall:
+ Issue decisions on tax inspection, audit or supervision, or application of professional measures.
+ Develop plans for comprehensively improving compliance which are suitable for resources of tax authorities based on results of analysis of nature, causes and incidence of each level of compliance or each level of risk.
- In case of strict compliance with regulations of law, regulations in Circular 31/2021/TT-BTC and relevant guidelines on risk management, tax officials are exempt from personal liability in accordance with regulations of law.
- If the risk management application malfunctions or has not yet met risk management requirements laid down in Circular 31/2021/TT-BTC, the application of risk management shall be carried out in a manual manner that competent authorities shall consider approving proposals or issuing documents on application of tax administration measures in accordance with the Law on tax administration and its guiding documents.
- If there are changes in results of compliance assessment and classification of taxpayer risks due to changes in information which are not yet automatically updated on the risk management application, such changes shall be manually updated by tax officials after obtaining approval from competent authorities.
- Implementation results of professional measures for levels of risks must be fully and accurately updated on tax administration applications of tax authorities or the risk management application on a case-by-case basis to serve the improvement and conduct of compliance assessment and classification of taxpayer risks in following periods.
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