Regulations on tax audit on tax authorities’ premises in Vietnam

Regulations on tax audit on tax authorities’ premises in Vietnam (Internet image)

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

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

Regulations on tax audit on tax authorities’ premises 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 Article 109 of the Law on Tax Administration 2019;

+ 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.

2. Regulations on tax audit on taxpayers’ premises in Vietnam

Regulations on tax audit on taxpayers’ premises according to Article 110 of the Law on Tax Administration 2019 are as follows:

- Tax audit on a taxpayer’s premises shall be carried out in the following cases:

+ The tax refund claim is subject to inspection before refund or eligible for refund before inspection;

+ The cases specified in Point b Clause 2 Article 109 of the Law on Tax Administration 2019;

+ Post-clearance inspection on the declarant’s premises shall be carried out in accordance with customs law;

+ Violations are suspected;

+ The inspection is carried out under a plan or theme;

+ The inspection is requested by State Audit Office of Vietnam, State inspectorates or another competent authority;

+ The enterprise is undergoing full division, partial division, merger, amalgamation, conversion, dissolution, shutdown, equitization, TIN invalidation, relocation of business location; other cases of surprise inspection and inspection requested by competent authorities, except for the cases of dissolution or shutdown in which tax is not finalized by tax authorities.

- In the cases specified in Point dd, Point e and Point g Clause 1 of Article 110 of the Law on Tax Administration 2019, tax authorities shall carry out inspection on taxpayers’ premises not more than once per year.

- The tax audit decision shall be sent to the taxpayer within 03 working days and announced within 10 working days from the day on which it is signed. Before the decision is announced, if the taxpayer is able to prove that the declared tax is accurate and the tax has been fully paid, the tax authority shall annul the decision.

- Tax audit procedures:

+ Announce the tax audit decision before carrying out the inspection;

+ Compare the declared information with accounting books, accounting records, financial statements, tax risk analysis, information about the document inspection on the tax authority’s premises, the situation within the scope of the tax audit decision;

+ The duration of the inspection shall not exceed 10 working days and be specified in the inspection decision. The inspection begins when the decision is announced. In case the inspection is complicated, the issuer of the decision may extend the duration for up to 10 more days;

+ Issue a tax audit record within 05 working days from the end of the inspection;

+ Take proper actions or request a competent authority to take actions according to the inspection results.

- Post-clearance inspection shall be carried out in accordance with customs law.

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