Instructions on processing results of tax audits and tax inspections in Vietnam

Instructions on processing results of tax audits and tax inspections in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Rules for tax audits and tax inspections in Vietnam

Rules for tax audits and tax inspections in Vietnam according to Article 107 of the Law on Tax Administration 2019 are as follows:

- Apply risk management to tax administration; apply information technology to tax audits and tax inspections.

- Comply with this Law and relevant laws, set forms, inspection procedures prescribed by the Minister of Finance.

- Tax document examinations must not obstruct normal operation of taxpayers.

- When deciding to carry out a tax audit or tax inspection on the taxpayer’s premises, the head of the tax authority shall issue an inspection decision.

- Tax audit and tax inspection are meant to assess the adequacy and accuracy of the documents submitted or presented to tax authorities by taxpayers; the taxpayers’ compliance with tax laws and relevant laws.

2. Instructions on processing results of tax audits and tax inspections in Vietnam

Article 108 of the Law on Tax Administration 2019 stipulates the processing results of tax audits and tax inspections as follows:

- According to the result of the tax audit or tax inspection, the head of the tax authority shall issue a tax decision, recover the tax refunded against tax laws, impose penalties for tax administrative offences or request a competent person to do so.

If the offence is specified in the tax audit/inspection record, it will be also considered the administrative violation record.

- If tax evasion is suspected, the tax authority shall transfer the case to a competent authority for investigation; the tax authority shall cooperate with proceeding authorities during the investigation, prosecution and adjudication as prescribed by law.

3. Regulations on tax audit on tax authorities’ premises in Vietnam

Regulations on tax audit on tax authorities’ premises in Vietnam according to Article 109 of the Law on Tax Administration 2019 are as follows:

- Tax audit on tax authorities’ premises shall be carried out as follows:

+ Tax audit shall be inspected on tax authorities’ premises to assess the adequacy and accuracy of the information in the tax dossier and the taxpayer’s compliance with tax laws. Tax officials assigned to carry out tax audit shall analyze the tax dossier according to its level of tax risk, accordingly propose a plan for inspection on the tax authority’s premises, or follow the instructions in Clause 2 of this Article;

+ Tax audit on customs authorities’ premises is meant to compare information in the tax dossier with relevant information and documents, tax laws and result of physical inspection of exports or imports. Post-clearance inspection on customs authorities’ premises shall be carried out in accordance with customs law.

- Processing of results of tax audit on tax authorities’ premises:

+ If a tax offence which leads to insufficient tax or tax evasion is discovered, the taxpayer shall fully pay the tax and incur the penalties specified in this Law and relevant laws;

+ In case clarification of specific content in the tax dossier relevant to the amount of tax payable, exempt, reduced, refunded or carried forward is necessary, the tax authority shall request the taxpayer to provide explanation or additional information or documents.

In case the explanation or additional information or documents provided by the taxpayer prove that tax is declared correctly, the tax dossier will be accepted. Otherwise, the tax authority will request the taxpayer to supplement the tax dossier.

If the taxpayer fails to provide additional explanation, information or document or fails to supplement the tax dossier, or the additional explanation or supplementation is incorrect, the tax authority shall impose tax liability or issue a decision on examination on the taxpayer’s premises, or use it as the basis for development of the inspection plan according to tax risk management rules.

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