Regulations on Management of risks in carrying out inspections and audits at premises of taxpayers in Vietnam

Regulations on Management of risks in carrying out inspections and audits at premises of taxpayers in Vietnam (Internet image)

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

1. Regulations on management of risks in carrying out inspections and audits at premises of taxpayers in Vietnam

Article 19 of Circular 31/2021/TT-BTC stipulates the application of management of risks in carrying out inspections and audits at premises of taxpayers in Vietnam as follows:

- Tax authorities shall select taxpayers subject to inspections or audits at their premises as follows:

+ The number of taxpayers selected through analysis and assessment of compliance, and classification of taxpayer risks shall be at least 90% of the number of taxpayers subject to the annual inspection or audit plan;

+ The number of taxpayers that are randomly selected shall not exceed 10% of the number of taxpayers subject to the annual inspection or audit plan.

- Select taxpayers subject to the plan for inspection at taxpayers’ premises

Based on the list of taxpayers classified into levels of risks associated with tax inspection and audit prescribed in Article 13 hereof, tax authorities shall select taxpayers that shall bear inspections or audits at their premises as follows:

+ Select taxpayers subject to inspection: Taxpayers shall be selected to place under the annual plan for inspection of taxpayers at their premises according to their risk classification results in descending order.

+ Select taxpayers subject to audit: Taxpayers shall be selected to place under the annual plan for audit of taxpayers at their premises according to their risk classification results in descending order. Selected taxpayers must be not the ones subject to the annual inspection plan prescribed in Point a Clause 2 of Article 19 of Circular 31/2021/TT-BTC.

+ The application of risk management to selection of taxpayers with signs of risks for developing tax inspection and audit plans must be carried out in a manner that avoids duplication and overlapping in accordance with regulations of the Law on tax administration, its guiding documents and relevant legislative documents.

During performance of tax administration tasks, if a tax authority has received reliable information to lower a taxpayer’s level of risk to the low level or has grounds to believe that the taxpayer is considered as low risk and not necessary to place under the annual inspection or audit plan, the tax authority shall decide not to place that taxpayer under the inspection or audit plan and select another taxpayer for the annual inspection or audit plan as prescribed. During performance of tax administration tasks, if there is any information which is collected and verified showing a taxpayer posing signs of high risks, the tax authority shall add that taxpayer to the annual inspection or audit plan. The tax authority shall assume responsibility for its decision on change of selected taxpayer.

+ Development and authority to approve the plan for inspection or audit of taxpayers at their premises, and the list of selected taxpayers enclosed with the plan as prescribed in Article 19 of Circular 31/2021/TT-BTC shall comply with regulations of the Law on tax administration, its guiding documents and relevant legislative documents.

- Based on results of analysis of risks by the information technology application or risks from operational analysis, information collected during the performance of tax administration tasks, tax authorities shall determine contents and scope of the tax inspection or audit.

2. Management of risks in managing tax debts and implementing tax enforcement decisions in Vietnam

Pursuant to Article 20 of Circular 31/2021/TT-BTC, based on the list of taxpayers classified into levels of risks associated with tax debt management and implementation of tax enforcement decisions as prescribed in Article 13 of Circular 31/2021/TT-BTC, tax authorities shall manage tax debts and implement tax enforcement decisions in accordance with regulations of the Law on tax administration and its guiding documents while taking into account the levels of risks for prioritizing or expediting actions.

- High risk: Based on actual conditions, tax authorities shall select, from the list of taxpayers subject to tax enforcement measures, taxpayers from which tax debts can be collected, taxpayers with large tax debts, taxpayers suspected of liquidating assets or absconding, and taxpayers that want to leave Vietnam for increasing frequency of expediting actions or against them actions will be taken first;

- Medium and low risks: Monitor, expedite and implement debt collection measures in accordance with regulations of the Law on tax administration and its guiding documents.

To Quoc Trinh

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