Regulations on tax imposition under Viet Nam Law on Tax Administration

Tax imposition is an important activity in tax administration. Let’s find out this issue with Lawyer X through the following situation: “Dear Lawyer! I want to ask what are tax liability imposition rules? How shall tax liability be imposed in case of tax offences? What are other Viet Nam legal regulations relating to this issue? Thanks for answering me!”

Legal grounds

Viet Nam Law on Tax Administration 2019

What are tax liability imposition rules?

Tax shall be imposed on the basis of tax administration rules, tax calculation methods and bases specified by tax laws and customs laws.

Tax authorities shall impose tax payable, separate elements or tax calculation bases.

Tax liability imposition in case of tax offences

– Tax liability will be imposed if the taxpayer:

• Fails to apply for taxpayer registration; fails to declare tax; fails to provide supplementary tax documents at the request of the tax authority; fails to declare fully and/or accurately the tax calculation bases;
• Fails to record or fully and/or accurately record data on the accounting books;
• Fails to present the accounting books, invoices and necessary documents relevant to the determination of tax payable within a certain time limit;
• Fails to comply with the tax inspection or tax audit decision;
• Buys, sells, trades goods and record values thereof against their market prices;
• Buys or trades goods using illegal invoices; illegally uses invoices for real goods from which revenue has been declared for tax calculation as investigated by a competent authority;
• Is suspected of absconding or selling assets to evade tax;
• Makes false transactions to reduce tax liability; or
• Fails to fulfill the responsibility to declare and valuate related-party transactions; fails to provide information about enterprises having related-party transactions according to tax administration laws.

– Bases for tax liability imposition:

• The database of the tax authorities and commercial database;
• Comparison between the tax payable by providers of the same goods or services on the same scale in the same area (or in another area if such similar providers are not available in the same are+.
• Unexpired inspection results and documents;
• The ratio of tax on revenue in the corresponding field according to tax laws.

– Separate elements relevant to determination of tax payable shall be imposed in the following cases:

• Through inspection of the tax declaration dossier, the tax authority has reasonable grounds to believe that the taxpayer did not fully or accurately declare the elements serving as the basis for tax calculation and fails to provide supplementary documents as requested by the tax authority;
• Through inspection of the accounting books and invoices relevant to tax calculation, the tax authority is able to prove that the taxpayer failed to accurately or truthfully record the tax calculation elements;
• Selling prices of goods/services were in accurately recorded in order to reduce the taxable revenue; buying prices of raw materials, goods and services were inaccurately recorded in order to increase expense or deductible VAT and thus reduce the amount of tax payable;
• The taxpayer failed to determine the elements or fails to calculate the tax payable after the elements are determined. separate elements or tax calculation bases.

– In cases other than those specified in Clause 3 of Article 50, a taxpayer shall have proportional tax imposed on their revenue if the tax authority finds that their accounting books, invoices and documents are inadequate or illegal, or tax is not accurately declared and their maximum revenue is equal to the maximum revenue of a microenterprise defined by regulations of law on assistance for small and medium enterprises.

Flat tax payable by household businesses and individual businesses

– Tax authorities shall determine the flat tax payable by household businesses and individual businesses who fail to comply with or fully comply with regulations on accounting, invoices and documents, except for the cases in Clause 5 of article 51.

– Tax authority shall impose flat tax according to declarations of household businesses and individual businesses, the database of tax authorities, and comments of Tax Advisory Council of the commune.

– Flat tax shall be imposed by calendar year (or by month for seasonal business). Flat tax shall be published in the commune. The taxpayers shall inform the tax authority when changing their business lines or scale, suspend or shut down the business in order to adjust the flat tax.

– The Minister of Finance shall specify the bases and procedures for determination of flat tax payable by household businesses and individual businesses.

– Household businesses and individual businesses whose revenues and employees reach the upper limit for extra-small enterprises prescribed by regulations of law on small and medium enterprises shall do accounting and declare tax.

Imposition of tax on exports and imports

– Customs authorities shall impose tax liability on exports and imports in the following cases:

• The declarant declares tax according to illegal documents; fails to declare or accurately and fully declare information serving tax calculation;
• The declarant fails to provide, refuses to provide or delays providing accounting books, documents and data relevant to tax calculation;
• The declarant fails to prove, explain or fails to explain in the tax calculation as prescribed by law; fails to comply with the customs authority’s inspection decision;
• The declarant fails to record or fully and accurately record data on the accounting books to calculate tax;
• The customs authority has evidence to that the declared value is false;
• The transaction is falsely carried out in a manner that affects the amount of tax payable;
• The declarant fails to calculate the amount of tax payable themselves;
• Other cases of unconformable tax declaration discovered by customs authorities.

– The customs authority shall impose tax according to the exports or imports in reality; the tax calculation bases and methods; the tax administration database and commerce database; customs declarations; other documents and information relevant to the exports and imports.

Responsibilities of tax authorities for tax liability imposition

– The tax authority shall inform the taxpayer of the reasons and basis for tax liability imposition, the amount of tax imposed and the deadline for paying tax.

– In case tax liability is imposed after a tax audit or tax inspection, the reasons and basis for tax liability imposition, the amount of tax imposed and the deadline for paying tax shall be written in the audit or inspection record or and tax decision.

– If the tax imposed by the tax authority is greater than the tax payable under a dispute settlement decision issued by a competent authority or a court decision or court judgment, the tax authority shall refund the difference.

– If the tax imposed by the tax authority is smaller than the tax payable under a dispute settlement decision issued by a competent authority or a court decision or court judgment, the taxpayer shall pay the difference. Tax authorities for be responsible for tax liability imposition.

Responsibilities of tax authorities for paying tax imposed

Taxpayers shall pay the tax imposed by tax authorities under tax decisions, even if they do not concur with it, in which case they may request explanation from the tax authority or file a complaint or lawsuit against the tax liability imposition decision. Taxpayers shall provide documents to support their complaints or lawsuits.

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Conclusion: So the above is Regulations on tax imposition under Viet Nam Law on Tax Administration. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com