Law on Tax Administration 2019: 17 Cases in which enterprises are subject to tax liability imposition in Vietnam

Law on Tax Administration 2019: 17 Cases in which enterprises are subject to tax liability imposition in Vietnam

According to Article 49 of the Tax Administration Law 2019, the Tax Administration Agency stipulates two principles of tax liability imposition in Vietnam as follows:

Principle 1: Tax liability imposition must be based on tax administration principles, tax calculation bases, and tax calculation methods as prescribed by tax law and customs law.

Principle 2: The Tax Administration Agency assesses the amount of tax payable or assesses each factor and tax calculation basis to determine the tax payable.

According to Article 50 and Article 52 of the Tax Administration Law 2019, from July 1, 2020, in the following cases, enterprises will be subject to tax liability imposition:

The tax authority in Vietnam imposes tax liability for enterprises violating tax laws in one of the following cases:

1. No taxpayer registration, no tax declaration, no supplementary tax documentation submission upon request from the tax authority, or incomplete, untruthful, and inaccurate tax declaration regarding the tax calculation base;

2. Failing to reflect or inaccurately reflecting figures on accounting records to determine tax obligations;

3. Not presenting accounting records, invoices, documents, and necessary materials related to tax payable determination within the stipulated time;

4. Failing to comply with tax inspection and audit decisions as prescribed;

5. Buying, selling, exchanging, and accounting the value of goods and services not according to normal market transaction values;

6. Purchasing or exchanging goods using illegal invoices, using invoices illegally when the goods are real as determined by the competent authority, and have been declared for revenue for tax calculation;

7. Showing signs of fleeing or dispersing assets to avoid tax obligations;

8. Conducting transactions not in accordance with economic substance, not matching actual occurrences to reduce taxpayer's tax obligations;

9. Failing to comply with the regulations on the obligation to declare and determine the price of related-party transactions or failing to provide information as prescribed regarding the management of enterprises involving related-party transactions.

The customs authority in Vietnam imposes tax liability on exported and imported goods in the following cases:

10. Enterprises declare taxes based on illegal documents to declare and calculate taxes; no tax declaration or inaccurately, incompletely declaring content related to determining tax obligations.

11. Past the stipulated time, the enterprise does not provide, refuses to, or delays, prolongs the submission of records, accounting books, documents, vouchers, data, figures related to accurately determining the tax payable as prescribed.

12. The enterprise declaring taxes cannot explain, rationalize, or fails past the stipulated time to justify the content related to determining tax obligations as prescribed by law; not complying with the inspection, audit decision of the customs authority.

13. The enterprise declaring taxes does not reflect or incompletely, untruthfully, inaccurately reflects figures on accounting records to determine tax obligations.

14. The customs authority has sufficient evidence and grounds to determine that the declared value does not match the actual transaction value.

15. Transactions conducted not in accordance with economic substance, not matching actual occurrences affect the tax payable amount.

16. The enterprise declaring taxes cannot self-calculate the tax payable amount.

17. Other cases discovered by the customs authority or other authorities where tax declaration, calculation is not compliant with legal provisions.

Note:****** Enterprises in Vietnam are responsible for paying the assessed tax amount as per the tax handling decision by the tax administration agency. If they disagree with the assessed tax amount, they must still pay it while having the right to request an explanation from the tax authority or file a complaint, lawsuit regarding the tax liability imposition decision.**

Le Vy

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