The General Department of Taxation's request regarding enhancement of tax management for insurance enterprises in Vietnam

The General Department of Taxation's request regarding enhancement of tax management for insurance enterprises in Vietnam (Internet image) 

On March 11, 2024, the General Department of Taxation issued Official Dispatch 910/TCT-TTKT on strengthening tax management for insurance enterprises.

The General Department of Taxation's request regarding enhancement of tax management for insurance enterprises in Vietnam

Recently, the Ministry of Finance has issued Official Dispatches on strengthening inspection and supervision of activities in the insurance market. Therefore, to continue to strengthen tax management for insurance businesses, the General Department of Taxation requests that Departments of Taxation carry out the following:

- Carrying out reviews and statistics of insurance enterprises and branches of insurance enterprises under their management. On that basis, implement risk management principles in tax management to inspect documents at the Tax Authority headquarters according to regulations; In the event of detecting risks, inspection and examination shall be carried out at the taxpayer's headquarters according to regulations.

- Assigning a focal unit to be in charge of expertise, research, implementation, monitoring, and management of insurance businesses, insurance business branches, while at the same time continuing to direct and strengthen the implementation of propaganda work for these businesses.

- Closely coordinating with relevant authorities to implement strict management of insurance enterprises and insurance enterprise branches to minimize risks in tax management. Through inspection and examination, if organizations and individuals are discovered to have violated tax laws and show signs of crime, the files will be transferred to the authorities for handling in accordance with the provisions of the law.

- Large Enterprise Department of Taxation, Hanoi Department of Taxation and Ho Chi Minh City Department of Taxation continue to apply prescribed measures to completely resolve recommendations in the Inspection Conclusion of the Ministry of Finance (Department of Insurance Management and Supervision) for insurance enterprises and, at the same time, continue to review other insurance enterprises in the management area to proceed with handling in accordance with the provisions of law.

- During the implementation process, the Departments of Taxation continue to carry out good coordination in the tax management process for insurance enterprises and insurance enterprise branches.

More details can be found in Official Dispatch 910/TCT-TTKT, dated March 11, 2024

Rights and obligations of insurers and foreign non-life insurers’ branches in Vietnam

(1) An insurer and foreign non-life insurer’s branch shall have the following rights:

- Collect insurance premiums under contractual terms and conditions;

- Request the policyholder to provide full and accurate information related to conclusion and execution of the insurance contract;

- Revoke the insurance contract as per clause 2 of Article 22 or unilaterally terminate the insurance contract under Article 26 of the Law on Insurance Business 2022;

- Reject payment of insurance claims or insurance if insurance claims fall outside of the limit of insured liability or fall within the scope of application of the disclaimer clause as provided in the insurance contract;

- Request the policyholder to apply loss prevention and control measures under the Law on Insurance Business 2022 and other regulatory provisions of relevant law;

- Request the third party to repay the amount that the insurer or the foreign non-life insurer’s branch pay as indemnity or coverage to the insured in case of loss or damage to property; economic interests or contractual or lawful obligations; civil liability that the third party causes;

- Other rights prescribed by law.

(2) An insurer and a foreign non-life insurer’s branch shall take on the following obligations:

- Provide the policyholder with proposal and questionnaire related to insurable risks, subject matters insured, rules, terms and conditions of insurance;

- Give the policyholder with clear and full explanations about insurance benefits, clauses on disclaimer of insured liability, rights and obligations of the policyholder when concluding the insurance contract;

- Provide the policyholder with the proof of conclusion of the insurance contract prescribed in Article 18 herein;

- Issue premium invoices to the policyholder as agreed upon in the insurance contract and stipulated in regulatory provisions of relevant law;

- Pay indemnity and insurance in case of policy event that occurs;

- Give written explanations as to why payment of any insurance claim or coverage is rejected;

- Cooperate with the policyholder on settling third-party claims for compensation for any losses falling within the limit of insured liability in case of any policy event that occurs;

- Store and retain insurance contract-related documents and records under law;

- Ensure confidentiality and security for information provided by the policyholder or the insured, except as requested by competent regulatory authorities or agreed by the policyholder or the insured;

- Other obligations prescribed by law.

(Article 20 of the Law on Insurance Business 2022)

Ho Quoc Tuan

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