Tax audit is a very essential activity to ensure the correctness of tax administration. Let’s find out this issue with Lawyer X through the following situation: “Dear Lawyer! I want to ask what are rules for tax audits? How shall tax audit be carried out? Thanks for answering me!”
Legal grounds
Vietnam Law on Tax administration
What are rules for tax audits?
- 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.
Tax audit on tax authorities’ premises
– 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;
- 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.
Tax audit on taxpayers’ premises
– 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 this Law;
- 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, 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.
Rights and obligations of taxpayers during tax audit on their premises
– The taxpayer has the right to:
- Reject the inspection if the tax audit decision is not available;
- Refuse to provide information and documents that are not relevant to the audit; information and documents that are state secrets, unless otherwise prescribed by law;
- Receive the tax audit record and request explanation for the contents thereof;
- Leave comments in the tax audit record;
- File a complaint or lawsuit and claim damages as prescribed by law;
- Report violations of law committed during the audit.
– The taxpayer has the responsibility to:
- Comply with the tax audit decision;
- Fully and accurately provide information and documents relevant to the inspection as requested by the auditors; take legal responsibility for the accuracy of the information and documents provided;
- Sign the tax audit record within 05 working days from the end of the inspection;
- Comply with the requests specified in the tax audit record, conclusion and relevant decisions.
Duties and entitlements of the head of the tax authority that issues the tax audit decision and tax officials in tax audit
– The head of the tax authority that issues the tax audit decision has the following duties and entitlements:
- Ensure compliance with the contents and time limit specified in the tax audit decision;
- Implement the measures specified in Article 122 of this Law;
- Extend the inspection duration;
- Issue tax decisions or impose administrative penalties within his/her competence, or request a competent person to issue a conclusion and impose penalties for tax administrative offences;
- Settle complaints within his/her competence.
– Tax officials have the following duties and entitlements during the audit:
- Comply with the tax audit decision;
- Request the taxpayer to provide information and documents relevant to the audit;
- Issue an inspection record; submit a report to the person that issued the tax audit decision and take responsibility for the accuracy and objectivity of such record and report;
- Impose administrative penalties within their competence or request a competent person to issue a conclusion and impose penalties for tax administrative offences;
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Frequently asked questions
The taxpayer has the right to reject the inspection if the tax audit decision is not available;
The taxpayer has the right to refuse to provide information and documents that are not relevant to the audit; information and documents that are state secrets, unless otherwise prescribed by law;
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;
Conclusion: So the above is Regulations on tax audits under Vietnam 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
