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MINISTRY OF
FINANCE
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SOCIALIST
REPUBLIC OF VIET NAM
Independence-Freedom-Happiness
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No.:
31/2021/TT-BTC
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Hanoi, May 17,
2021
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CIRCULAR
PRESCRIBING
APPLICATION OF RISK MANAGEMENT TO TAX ADMINISTRATION
Pursuant to the Law on Tax Administration dated
June 13, 2019;
Pursuant to the Government’s Decree No. 126/2020/ND-CP
dated October 19, 2020 on elaboration of the Law on Tax Administration;
Pursuant to the Government’s Decree No.
87/2017/ND-CP dated July 26, 2017 defining functions, tasks, powers and
organizational structure of the Ministry of Finance;
At the request of Director of the General
Department of Taxation,
The Minister of Finance promulgates a Circular
prescribing the application of risk management to tax administration.
Chapter I
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Article 1. Scope
This Circular introduces regulations on application
of risk management to tax administration by tax authorities at all levels,
including:
1. Collection, processing, management and use of
information related to taxpayers to serve risk management.
2. Assessment of the compliance with tax laws and
classification of taxpayer risks.
3. Application of tax administration measures
corresponding to levels of compliance with tax laws and levels of taxpayer
risks.
Article 2. Regulated entities
1. Taxpayers.
2. Tax authorities.
3. Tax officials.
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Article 3. Definitions
1. “application of risk management to tax
administration” means the employment of risk management procedures, rules,
measures and/or techniques and results of assessment of compliance with tax
laws and levels of taxpayer risks to decide the implementation of tax
administration measures.
2. “risk management information” means
information about and related to tax which is collected and processed to serve
the application of risk management to tax administration.
3. “compliance level” means the
classification result of a taxpayer’s compliance with tax laws given by a
competent tax authority.
4. “compliance assessment criteria” mean the
standards used for assessing taxpayers’ compliance with tax laws.
5. “compliance assessment indicators” mean
information criteria with specific values included in compliance assessment
criteria.
6. “compliance assessment” means the
collection, analysis, verification and comparison of information about business
operations and compliance with tax laws with compliance assessment criteria and
indicators for classifying taxpayers’ levels of compliance with tax laws.
7. “compliance management” means tax
authorities’ compliance assessment, classification of risks, and analysis of
taxpayers’ behaviors whereby they will use appropriate resources for management
measures for each level in order to encourage the voluntary compliance and
prevent non-compliant behaviors.
8. “analysis of taxpayer risk” means the
analysis of information about a taxpayer so as to detect signs of violations
against tax laws which cause loss of state budget revenues from taxes.
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10. “risk classification criteria” mean the
standards used for assessing and determining the levels of risks in tax
administration.
11. “risk classification indicators” mean
information criteria with specific values included in risk classification
criteria.
12. “risk assessment” means the
classification, consideration and comparison of levels of risks with risk
classification indicators and treatment of previous risks in order to determine
the order of priority.
13. “signs of risk” mean any information
reflecting potential violations against laws.
14. “signs of tax-related violation” mean
any information used for identifying violations against tax laws.
15. “emphasized supervision" means tax
authorities’ application of professional measures against taxpayers that are
assessed to pose high risks or that are non-compliant with tax laws in each
business sector and each area in each period.
16. “risk management application” means an
information technology application which is used for connecting and receiving
information from relevant data sources within and outside tax authorities, and
digitalizing risk management measures and techniques based on the issued
criteria and indicators so as to carry out the analysis of taxpayer risks,
compliance assessment, and determination of levels of risks which are used by
tax authorities to decide the implementation of professional measures.
17. “taxpayer segmentation” means tax
authorities’ classification of taxpayers into specific groups with the same
characteristics to which appropriate management measures are applied.
18. “classification using machine learning” means
the conduct of computational and statistical algorithms on computers to
determine models, functions and indicators used for classifying and estimating
levels of risks.
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20. “scoring and score-based classification” means
a method employed to assess taxpayers based on scores of criteria and
indicators on their business operations and compliance with tax laws.
Article 4. Risk management
rules
1. The application of risk management is aimed to
ensure the validity and efficiency of tax administration activities; encourage
and facilitate taxpayers’ voluntary compliance with regulations and laws on
taxation and tax administration as well as prevent, detect and promptly take
actions against regulations and laws on taxation and tax administration.
2. Risk management information is collected from
information sources within and outside tax authorities (including foreign
information sources) in accordance with regulations of law; is mainly managed
at the General Department of Taxation through the information technology system
and shall be processed, shared and provided for tax authorities at all levels
and other regulatory authorities to serve their performance of tax
administration tasks in accordance with regulations of law.
3. Assessment and classification of taxpayers’
compliance and risks shall be automatically and periodically carried out
adopting one or some of the methods specified herein in accordance with
regulations of law, tax administration procedures and measures, and based on
the taxpayer segmentation and criteria specified herein and taxpayer database.
4. Based on results of compliance assessment,
classification of taxpayer risks, information available on tax administration applications
of tax authorities, signs of violations, and other signs of risks available at
the decision-making time, tax authorities shall:
a) Issue decisions on tax inspection, audit or
supervision, or application of professional measures.
b) Develop plans for comprehensively improving the
compliance which are suitable for resources of tax authorities based on results
of analysis of nature, causes and incidence of each level of compliance or each
level of risk.
5. In case of strict compliance with regulations of
law, regulations herein and relevant guidelines on risk management, tax
officials are exempt from personal liability in accordance with regulations of
law.
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7. If there are changes in results of compliance
assessment and classification of taxpayer risks due to changes in information
which are not yet automatically updated on the risk management application, such
changes shall be manually updated by tax officials after obtaining approval
from competent authorities.
8. Implementation results of professional measures
for levels of risks must be fully and accurately updated on tax administration
applications of tax authorities or the risk management application on a
case-by-case basis so as to serve the improvement and conduct of compliance
assessment and classification of taxpayer risks in following periods.
Article 5. Methods for
compliance assessment and classification of taxpayer risks
Levels of compliance and taxpayer risks shall be
determined adopting one or some of the following methods:
1. Scoring and score-based classification.
2. Machine learning.
3. List-based ranking.
Article 6. Procedures for applying
risk management
Tax authorities shall apply risk management to tax
administration according to the following procedures:
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Tax authorities shall review risks and faults of
taxpayers during their compliance with provisions in Article 17 of the Law on
Tax Administration No. 38/2019/QH14 or regulations in force in order to
identify major risks need to be treated as well as high-risk taxpayers and
treatment solutions thereof.
2. Organize the collection and processing of risk
management information
Risk management information is collected and
processed according to regulations in Chapter II hereof.
During the analysis of taxpayer risks, if any
information is found to be false or inadequate, taxpayers shall provide
explanations or additional information and documents as requested and within
the time limit notified by tax authorities to ensure the accurate compliance
assessment and classification of taxpayer risks.
3. Establish and update indicators serving the
analysis, compliance assessment and classification of taxpayer risks
Based on results of assessment of situations and
determination of risk management objectives and requirements as prescribed in
Clause 1 of this Article, risk management information and information
technology applications, tax authorities shall establish and update indicators
and weighing factors used for assessing and classifying the levels of
compliance and taxpayer risks.
4. Carry out analysis and compliance assessment;
determine levels of taxpayer risks; determine levels of risks from tax
administration operations; manage risk records of emphasized supervision cases
Taxpayers are segmented according to conditions
which are appropriate for tax administration requirements in each period when
carrying out analysis and assessment of compliance and taxpayer risks.
The analysis and classification of compliance and
taxpayer risks shall be carried out using the methods specified in Article 5
hereof.
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6. Monitor, update and assess feedbacks on
implemented tax administration measures.
7. Collect, process, use and retain information;
provide guidance on adjustment of risk management so as to ensure the
efficiency of tax administration activities.
Chapter II
COLLECTION AND
PROCESSING OF RISK MANAGEMENT INFORMATION
Article 7. Risk management
information
Information serving risk management in tax
administration operations includes:
1. Information of tax authorities
a) Information about business registration and tax
registration; information about identity of founding members, owners and legal
representatives of taxpayers; registration and use of employees; information
about taxpayers’ status; number of times of changes in business registration
and tax registration information; capital contribution by members; main
business lines;
b) Information about tax declaration dossiers; tax
payments; tax arrears; tax incentives, tax exemption and reduction; tax
deferral; tax refund; registration, management and use of invoices and records;
information about complaints and denunciations; information about inspection
results and post-inspection actions; information about transfer pricing;
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2. Information provided by relevant regulatory
authorities, organizations and individuals
a) Information about taxpayers collected provided
by relevant regulatory authorities, organizations and individuals as prescribed
in Article 26, Article 27, Article 30 of the Government’s Decree No.
126/2020/ND-CP dated October 19, 2020;
b) Information from foreign sources or provided by
international organizations to fulfill their obligations under relevant
international treaties on taxation to which Vietnam is a signatory.
3. Other information relevant to taxpayers.
Article 8. Collection and
processing of risk management information
1. Sources of information to be collected
a) Information from information systems of tax
authorities;
b) Information obtained during the cooperation with
agencies and units affiliated to the Ministry of Finance, and those affiliated
to relevant Ministries on sharing and provision of information serving the
performance of tax administration tasks;
c) Information obtained during the cooperation and
information sharing with foreign tax authorities and competent authorities in
accordance with regulations of law;
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dd) Information on taxpayers’ operations collected
during the performance of tax administration activities;
e) Information purchased according to the Law on
tax administration and its guiding documents;
g) Tax-related information from foreign sources or
provided by international organizations to fulfill their obligations under
relevant international treaties to which Vietnam is a signatory;
h) Information from other sources as prescribed by
law.
2. Forms of information collection
a) Information is provided or exchanged in soft
copy format, electronic documents, e-mail or through the web portal of General
Department of Taxation; by sending messages and making calls to the telephone
numbers officially announced by tax authorities;
b) Information is provided or exchanged in writing,
by telegram, fax or paper documents;
c) Information is exchanged directly with written
records made and bearing certification of relevant parties; information is
collected by representatives; from meetings and in other forms.
3. Processing of collected information
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b) Arrange and retain information by sorting it
into specific categories to serve the use and analysis of information;
c) Carry out analysis of information to identify
components of risk management information;
d) Consolidate relevant components which are
identified through the said analysis to clarify the importance of the collected
information to the determination of levels of risks and compliance assessment.
Article 9. Application of
information technology to risk management
1. The risk management application and taxpayer
database are developed and managed by the General Department of Taxation in a
manner ensuring that information used for risk assessment shall be fully,
accurately and promptly updated by connecting to electronic tax data processing
systems and relevant information systems.
In case the systems encounter connection errors,
information shall be updated, integrated, processed and retained on the systems
immediately after such errors are remedied.
2. Management measures shall be adopted to ensure
data safety and confidentiality, computer safety and cybersecurty in accordance
with regulations of law.
3. The General Department of Taxation shall stipulate
responsibilities of tax authorities and tax officials to develop, manage,
operate, update and use the risk management application appropriate for tax
operations.
Chapter III
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Article 10. Compliance
assessment
1. Taxpayers shall be assessed and classified into
one of the following levels of compliance with tax laws:
a) Level 1: High compliance.
b) Level 2: Medium compliance.
c) Level 3: Low compliance.
d) Level 4: Non-compliance.
2. Levels of compliance by taxpayers are classified
according to the criteria specified in Appendix I enclosed herewith.
3. Tax authorities shall monitor and process
compliance assessment results as follows:
a) Taxpayers that are non-compliant shall be
managed according to the provisions in Article 22 hereof;
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Article 11. Classification of
levels of risks of taxpayers that are enterprises
1. Overall risk classification
a) Taxpayers that are enterprises are classified
into one of the following levels of risks:
a.1) Level 1: Very-low risk.
a.2) Level 2: Low risk.
a.3) Level 3: Medium risk.
a.4) Level 4: High risk.
a.5) Level 5: Very-high risk.
b) Taxpayer risks shall be classified according to
the compliance assessment results prescribed in Article 10 and the criteria in
Appendix II enclosed herewith.
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c.1) Taxpayers of very-high or high level of risk
shall be managed according to the provisions in Article 22 hereof;
c.2) Depending on tax administration requirements
in each period, taxpayers of various levels of risks may be further subjected
to risk classification in tax administration operations as prescribed in Clause
2 of this Article.
2. Risk classification in tax administration
operations
a) Levels of risks of taxpayers that are
enterprises in tax administration operations include:
a.1) High risk.
a.2) Medium risk.
a.3) Low risk.
b) Taxpayer risks in tax administration operations
shall be classified according to the overall risk classification results prescribed
in Clause 1 of this Article and the criteria in Appendix II enclosed herewith.
c) Handling risk classification results
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Article 12. Classification of
levels of risks of taxpayers that are individuals
1. Taxpayers that are individuals are classified
into one of the following levels of risks:
a) High risk.
b) Medium risk.
c) Low risk.
2. Levels of risks of taxpayers that are
individuals shall be classified according to the compliance assessment results
prescribed in Article 10 and the criteria in Appendix III enclosed herewith.
3. Handling results of classification of risks of
taxpayers that are individuals
Taxpayers of levels of risks shall be liable to the
tax administration measures specified in Article 15 hereof.
Chapter IV
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Article 13. Application of
risk management to tax administration
1. Based on the compliance assessment results
prescribed in Article 10, results of classification of taxpayer risks
prescribed in Article 11 and Article 12 hereof, and professional information
available at the decision-making time, tax authorities shall make the list of
taxpayers classified into levels of risks in each period and:
a) Manage the compliance with tax laws;
b) Manage risks associated with tax registration;
c) Manage risks in inspecting tax declaration
dossiers at tax authorities;
d) Manage risks in managing tax refunds;
dd) Manage risks in carrying out inspection and
audit at the premises of the taxpayers;
e) Manage risks in managing tax debts and
implementing tax enforcement decisions;
g) Managing risks in managing invoices and records;
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i) Manage risks of taxpayers that are individuals;
k) Apply risk management to other tax
administration operations.
2. The list of risky taxpayers sorted by cases
specified in Clause 1 of this Article shall be updated on the risk management
application. Tax authorities at all levels shall consolidate, update and manage
information about risky taxpayers to serve the performance of tax
administration tasks within the whole tax sector.
3. The General Department of Taxation shall
stipulate the periodical assessment and compilation of the list of risky
taxpayers sorted by cases specified in Clause 1 of this Article for determining
important issues in tax administration to meet tax administration requirements
in each period.
4. In case any suspicious information or signs of
violations against tax laws are detected during tax inspection or tax audit or
according to denunciations or notifications from regulatory authorities,
investigating authorities, heads of tax authorities shall decide to change the
method and scope of tax inspection or tax administration measures within their
competence and shall also assume responsibility for their decisions.
Article 14. Measures for
improving compliance levels
Based on the compliance assessment results
prescribed in Article 10 hereof, tax authorities shall carry out analysis of
the nature and incidence of each compliance level of taxpayers, and develop
specific plans for improving the compliance with specific measures for each
compliance level as follows:
1. For high-compliance taxpayers: put them into the
list of taxpayers being considered for commendation and reward.
2. For taxpayers need to improve their compliance:
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b) Propose amendments to policies, simplification
of administration procedures, adoption of assistance measures, and application
of information technology to facilitate taxpayers’ declaration and payment of
taxes and minimize costs of compliance;
c) Classify risks and apply tax administration
measures according to levels of taxpayer risks as prescribed in Articles 15
through 22 hereof.
Article 15: Management of
risks of taxpayers that are individuals
Based on the list of individual taxpayers that are
classified into levels of risks as prescribed in Article 13 hereof, tax
authorities shall decide to adopt appropriate tax administration measures as
prescribed.
1. For household businesses and individual
businesses
a) High risk: One or some of the following measures
shall be implemented:
a.1) Review, check and verify relevant information
used for re-determining revenues and tax rates of household businesses and
individual businesses;
a.2) Make list of household businesses and
individual businesses to be inspected or surveyed for re-determining their
revenues and tax rates, and assessing fulfillment of tax obligations by
relevant organizations.
b) Medium risk: Randomly select household
businesses and individual businesses for surveys; continue carrying out
classification of risks to serve the following assessment period;
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2. For individuals earning incomes which are
subject to personal income tax (excluding household businesses and individual
businesses)
a) High risk: Make the list of individuals subject
to verification visit and organize verification visit according to regulations
in force;
b) Medium and low risks: Keep records and carry out
classification of risks to serve the following assessment period.
Individuals that earn incomes subject to personal
income tax from income payers shall be controlled by means of analysis of signs
of risks of such income payers.
3. For individuals earning revenues from land and
property on land
a) High risk: Carry out analysis of documents, make
and submit the list of individuals whose tax declaration dossiers are inspected
at tax authorities to heads of the tax authorities, and carry out inspection of
tax declaration dossiers at tax authorities in accordance with regulations in
force;
b) Medium and low risks: Keep records and carry out
classification of risks to serve the following assessment period.
Article 16. Application of
risk management to tax registration management
Based on the list of taxpayers classified into
levels of risks associated with tax registration as prescribed in Article 13
hereof, tax authorities shall adopt appropriate handling measures or cooperate
with business registration authorities in handling in accordance with
regulations of laws on business registration and tax registration.
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a) High risk: The tax authority in charge of the old
location shall cooperate with the tax authority in charge of the new location
to carry out inspection at the tax authority or carry out inspection or audit
at the premises of the taxpayer in accordance with regulations of law in force;
b) Medium risk: The tax authority in charge of the
new location shall place the taxpayer under supervision and request the
taxpayer to provide explanations and documents if necessary;
c) Low risk: Inspection and supervision are not necessary;
tax authorities shall carry out compliance assessment and classification of
risks to serve the following assessment period.
2. In case of a taxpayer’s business suspension
a) High risk: Intensify tax administration measures
which must be commensurate with the taxpayer’s fulfillment of tax obligations
so as to take actions against tax debts, invoices and violations (if any) in a
timely manner;
b) Medium and low risks: Implement tax
administration measures as prescribed; carry out compliance assessment and
classification of risks for the following assessment period.
3. In case of invalidation of tax identification
number (TIN)
Carry out inspection or audit of annual tax
finalization dossiers at the taxpayer’s premises based on the risk classification
results in descending order.
Update the “dissolved”, “bankrupt”, or “suspended
business" status on the tax registration system if the taxpayer has
fulfilled tax obligations as prescribed. Adopt measures for expediting the
taxpayer to fulfill tax obligations before dissolution, bankruptcy or business
suspension as prescribed.
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Article 17. Management of
risks in inspecting tax declaration dossiers at tax authorities
Based on the list of taxpayers classified into
levels of risks associated with tax declaration dossiers as prescribed in
article 13 hereof, appropriate measures shall be adopted to process tax
declaration dossiers.
1. High risk: Carry out analysis of documents, make
and submit the list of taxpayers whose tax declaration dossiers are inspected
at tax authorities to heads of the tax authorities, and carry out inspection of
tax declaration dossiers a tax authorities as prescribed;
2. Medium and low risks: Inspection of tax
declaration dossiers at tax authorities is not necessary; tax authorities shall
carry out compliance assessment and classification of risks associated with
taxpayers’ tax declaration dossiers to serve the following assessment period.
Article 18. Manage risks
associated with tax refund
Tax authorities shall classify claims for tax
refund in accordance with regulations of the Law on tax administration and
relevant legislative documents or regulations in force. If claims for tax
refund are classified by risks, based on results of classification of risks
associated with claims for tax refund as prescribed in Article 13 hereof, tax
authorities shall adopt appropriate measures for processing the claims for tax
refund as follows:
1. Classification and processing of claims for tax
refund
a) High-risk claims for tax refund: Inspection
shall be carried out before tax refund
Within 12 consecutive months from the beginning of
the fiscal year, a taxpayer has claim for tax refund continuously assessed as
posing high risks:
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a.2) If total risk scores and risk score of each
criterion or indicator given in the current assessment of risk are same as
those given in the previous assessment; or a lower risk score is given to each
indicator in the current assessment resulting total risk scores given in this
assessment lower than those given in the previous one:
- If no sign of understatement of tax payable or
overstatement of tax eligible for refund is found in the previous inspection of
the claim for tax refund or post-refund inspection or audit, the following
claim for tax refund shall not be subject to inspection before tax refund.
- If any signs of understatement of tax payable or
overstatement of tax eligible for refund are found in the previous inspection
of the claim for tax refund or post-refund inspection or audit, the following
claim for tax refund shall be subject to inspection before tax refund.
b) Medium- and low-risk claims for tax refund: Tax
shall be refunded before inspection.
c) In case, after classification of claims for tax
refund and during the processing of the claims for tax refund, the tax
authority has detected a taxpayer showing signs of violations against tax or
customs laws, or in case a taxpayer fails to provide explanations or additional
information or documents or the explanations and documents provided by the
taxpayer cannot prove that the declared tax amount is accurate, the tax
authority shall change the claim’s category from claim eligible for tax refund
before inspection to claim subject to inspection before tax refund; the
approval for change of a claim’s category must be updated on the professional
information system.
2. Post-refund audit
a) The order of taxpayers subject to post-refund
audit shall be arranged by tax authorities according to taxpayers’ total risk
scores in descending order within five (05) years from the issue date of tax
refund decision:
a1) High risk (regarding claims for tax refund
which are not subject to inspection before tax refund as prescribed in Point a
Clause 1 of this Article): Post-refund audit shall be carried out within 01
year from the issue date of the tax refund decision;
a2) Medium risk: Post-refund audit shall be carried
out within 03 years from the issue date of the tax refund decision;
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a4) Depending on actual conditions, post-refund
audits may be carried out before the abovementioned time limits.
b) The General Department of Taxation shall provide
specific provisions on post-refund inspections and audits which should be
combined with inspection of compliance with tax laws as prescribed.
Article 19. Management of risks
in carrying out inspections and audits at premises of taxpayers
1. Tax authorities shall select taxpayers subject
to inspections or audits at their premises as follows:
a) 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;
b) 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.
2. 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:
a) 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.
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c) 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.
d) 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 this Article shall
comply with regulations of the Law on tax administration, its guiding documents
and relevant legislative documents.
3. 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.
Article 20. Management of
risks in managing tax debts and implementing tax enforcement decisions
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 hereof, 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.
1. 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;
2. 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.
Article 21. Management of
risks in managing invoices, records and other tax administration operations
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Based on the list of taxpayers classified into
levels of risks associated with management of invoices and records as
prescribed in Article 13 hereof, tax authorities shall adopt tax administration
measures as follows:
a) High risk: Include high-risk taxpayers in the
list of taxpayers to be reviewed or subject to inspection at tax authorities,
and consider placing them under the annual plan for inspection or audit of
taxpayers at their premises according to the Law on tax administration, its
guiding documents and relevant legislative documents. Based on inspection or
audit results, taxpayers are requested to buy invoices from tax authorities, or
use authenticated e-invoices or comply with other invoice management measures
in accordance with regulations in force; tax authorities shall decide the form
of invoices used by taxpayers that use invoices for the first time;
b) Medium and low risks: Select samples for
reviewing, inspecting, processing and assisting taxpayers in strictly complying
with regulations of law on invoices.
The General Department of Taxation shall stipulate
sampling methods which should be appropriate for tax administration
requirements set by each local government and in each period.
2. Management of risks in other operations
Based on the levels of risks in other operations
and relevant information, tax authorities shall decide to adopt professional
measures appropriate for performance of their functions and tasks.
Article 22. Emphasized
supervision of taxpayers showing signs of violations against tax laws
1. Taxpayers shall be kept under the emphasized
supervision if they have one of the following signs:
a) Their bank transactions show suspicious signs in
accordance with regulations of the Law on anti-money laundering in terms of tax
evasion and tax fraud.
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c) They have signs of high tax risks to the extent
of being classified as subjects of emphasized supervision or need to keep under
tax supervision through information collected for tax authorities'
administration.
d) They are selected from the list of taxpayers
that are non-compliant as prescribed in Article 10, the list of very high-risk
and high-risk taxpayers as prescribed in Clause 1 Article 11 hereof and those
failing to provide explanation and additional information or those providing
explanation and additional information but they are inadequate or are submitted
after the prescribed deadline stated in written notices of tax authorities.
2. Tax authorities at all levels shall monitor,
supervise and apply tax administration measures appropriate for each case
specified in Clause 1 of this Article.
3. The General Department of Taxation shall provide
specific provisions on collection and analysis of information, and
determination of subjects of emphasized supervision and supervisions methods in
conformity with regulations of law in each period.
Article 23. Inspection and
assessment of application of risk management to tax administration
1. Carry out inspection and assessment of the
following contents:
a) Quality of implementation of risk management
measures/techniques;
b) Validity and efficiency of application of risk
management to tax administration operations;
c) Implementation of decisions on inspection or
audit or other professional measures issued on the basis of application of risk
management, and results thereof;
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2. Inspection and assessment methods:
a) Consolidate reporting information and figures of
tax authorities at all levels, departments and units affiliated to the General
Department of Taxation during the application of risk management;
b) Collect, analyze and consolidate results of
application of risk management in tax administration operations;
c) Establish inspection teams to inspect the implementation
and application of risk management by tax authorities at all levels.
3. The Director General of General Department of
Taxation shall assign risk management units to inspect and assess the
implementation and application of risk management to tax administration as
prescribed in Clause 2 of this Article. Assessment shall be carried out
frequently; reports shall be submitted on a periodical basis (6 months and
every year) and whenever they are deemed necessary to meet operational
requirements.
Article 24. Supervision and
assessment of plans for improving compliance
1. Carry out inspection and assessment of the
following contents:
a) The implementation of the plan for improving
compliance;
b) Outcomes and efficiency of the plan for
improving compliance. To be specific:
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b.2) Actual results and expected results of
measures for minimizing risks through compliance measurement.
c) The application of transparency process to
development and implementation of the plan for improving compliance;
d) Improvement of overall compliance of different
groups of taxpayers and tax obligations;
dd) Organizational structure and human resources of
tax authorities at all levels for implementing the plan which must ensure the
validity and efficiency of the plan according to the plan’s objectives.
2. Supervision and assessment methods
a) Consolidate reporting information and figures of
tax authorities at all levels, departments and units affiliated to the General
Department of Taxation during the implementation of the plan for improving
compliance;
b) Collect, analyze and consolidate information
about the plan implementation results;
c) Establish inspection teams at tax authorities at
all levels.
3. The Director General of General Department of
Taxation shall assign risk management units to supervise and assess the
implementation of the plan for improving compliance as prescribed in Clause 2
of this Article. Supervision and assessment of the plan for improving
compliance shall be frequently carried out and reported on a periodical basis
(6 months and every year) and whenever they are deemed to meet the progress of
the plan.
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IMPLEMENTATION
ORGANIZATION
Article 25. Responsibility for
implementation
1. Agencies and units affiliated to the Ministry of
Finance and relevant ministries, organizations and individuals involved in tax administration
shall provide information and cooperate in applying risk management to tax
administration in accordance with regulations of laws in force and regulations
herein.
2. Pursuant to guidelines given herein, the
Director General of General Department of Taxation shall:
a) Promulgate indicators specified in Article 10,
Article 11 and Article 12 hereof to meet tax administration requirements in
each period; annually review and amend such indicators to meet actual
conditions;
b) Promulgate specific provisions on
responsibilities of tax authorities at all levels, tax officials and measures
to collect and process risk management information; scores, weighing factors
and measures used for risk management in tax administration;
c) Promulgate procedures, rules and guidelines for
application of risk management to tax administration.
3. The risk management unit shall act as the
contact point and take charge of:
a) Managing and operating the risk management
application and other information and data systems serving risk management as
assigned;
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c) Managing sets of indicators promulgated by the
Director General as prescribed in Point a Clause 2 of this Article on the risk
management information system and relevant information systems, monitoring,
assessing and adjusting indicators to meet management requirements in each
period.
4. Sub-Departments of Taxation, Regional
Sub-Departments of Taxation, Provincial Departments of Taxation, units
affiliated to the General Department of Taxation, and tax officials shall
strictly and fully implement regulations on application of risk management
herein and relevant documents.
Article 26. Effect
1. This Circular comes into force from July 02,
2021.
2. This Circular supersedes the Circular No.
204/2015/TT-BTC dated December 21, 2015 of Ministry of Finance.
3. If any legislative documents referred to in this
Circular are amended or superseded, the new ones shall apply./.
MINISTER
Ho Duc Phoc
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APPENDIX I
CRITERIA
FOR ASSESSMENT OF TAXPAYER COMPLIANCE
(Enclosed with the Circular No. 31/2021/TT-BTC dated May 17, 2021 of
the Minister of Finance of Vietnam)
No.
Criteria
Description
(1)
(2)
(3)
1
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Taxpayer has been operating and
has not been subject to any “notice of non-operation at registered address”
issued by a tax authority in the last two (02) years by the time of
compliance assessment
2
Declaration and payment of taxes
as prescribed
Taxpayer’s declaration and
payment of taxes incurred as prescribed in the last two (02) years by the
time of compliance assessment
3
Compliance with regulations on
management and use of invoices and records
Taxpayer’s compliance with
regulations on management and use of invoices and records in the last two
(02) years by the time of compliance assessment
4
Administrative violations
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5
Taxpayer has incurred
administrative penalties for failure to fully pay taxes or for tax evasion in
the last two (02) years by the time of compliance assessment
6
Taxpayer has used illegal
invoices or has illegally used invoices in the last two (02) years by the
time of compliance assessment
7
Taxpayer has incurred
administrative penalties imposed by tax authorities for failure to comply
with tax audit or inspection decisions and/or decisions on enforcement of
tax-related administrative decisions in the last two (02) years by the time
of compliance assessment
8
Tax
debts
Amount of tax debts owed by
taxpayer and number of days of late payment of such tax debts till the date
of compliance assessment
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Other
Other criteria as prescribed in
relevant documents
APPENDIX II
RISK
CLASSIFICATION CRITERIA FOR TAXPAYERS THAT ARE ENTERPRISES
(Enclosed with the Circular No. 31/2021/TT-BTC dated May 17, 2021 of the
Minister of Finance of Vietnam)
No.
Criteria
Description
(1)
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(3)
1
Enterprise’s general information
Date of establishment
2
Operating duration
3
Registered headquarters address
4
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5
Business lines
Registered business lines
Main business lines
6
Registered capital
Charter capital
Equity
Change in equity
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Suitability of the enterprise’s
staff for its nature and scale
8
Information about the
enterprise’s owner and legal representative
Number of violations committed by
the enterprise's owner and level of severity of the violation
9
Adequacy of information about the
enterprise’s owner and legal representative
10
Registered permanent residence of
the enterprise’s owner and legal representative
11
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12
Enterprise’s operational status
Enterprise’s operational status
13
Times of business suspension
14
Times of business relocation
15
Times of business relocation
without fulfilling tax obligations
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Tax declaration and payment
Ratio of tax
declaration dossiers submitted to total tax declaration dossiers to be
submitted
17
Ratio of tax
declaration dossiers submitted by prescribed deadlines to total tax
declaration dossiers submitted
18
Whether or not
the enterprise makes revision or addition of items in its tax declaration
dossiers
19
Audited financial statements
Auditor’s
opinions about the financial statements
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Revenues from sale of goods
and/or provision of services
Total revenue from sale of goods
and/or provision of services
21
Net revenue from sale of goods
and/or provision of services
22
Change in revenue from sale of
goods and/or provision of services
23
Change in net revenue from sale
of goods and/or provision of services
24
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Total value of goods purchased
and/or services used
25
Change in total values of goods
purchased/services used and goods sold/services supplied
26
Total expenses
27
Change in business expenses
28
Profit
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29
Total accounting profit after
corporate income tax
30
Total losses
31
Times of declaration of business
losses
32
Change in profits
33
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Current assets
34
Long-term assets
35
Change in assets
36
Enterprise’s payment capacity
Liabilities
37
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38
Material financial items
Payables to
sellers
39
Prepayments from
buyers
40
Provisions
41
Change in
payables to sellers
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Change in
prepayments from buyers
43
Change in
provisions
44
Fulfillment of tax obligations to
state budget
Amount payable to state budget in
the period
45
Amount paid to state budget in
the period
46
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47
Amount of tax
refunds received in the period
48
Value-added tax (VAT)
VAT on goods
sold/services supplied in the period
49
VAT on goods
purchased/services used in the period
50
VAT incurred in
the period
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VAT amount
payable in the period
52
VAT amount
carried forward to the next period for deduction
53
Change in VAT on
goods sold/services supplied
54
Change in VAT on
goods purchased/services used
55
Change in VAT
incurred
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Change in VAT
amount payable
57
Corporate income tax (CIT)
CIT payable in the period
58
Outstanding CIT in the period
59
CIT eligible for incentives,
reduction or exemption in the period
60
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61
Change in outstanding CIT
62
Change in CIT eligible for
incentives, reduction or exemption in the period
63
Excise tax
Amount of excise tax payable
64
Deducted amount of excise tax
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Change in amount of excise tax
payable
66
Change in deducted amount of
excise tax
67
Payments relating to land and
property on land
Land plot,
property on land transferred multiple times
68
Difference in
information declared by the taxpayer and that collected by the tax authority
69
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70
Financial obligation
determination dossiers, tax declaration dossiers indicating tax amounts
exempted/reduced, deductions or tax amounts for which reduction or exemption
is applied
71
Dossiers on
declaration of rents for land or water surface for which land lease agreement
or decision is not available
72
Enterprise’s tax debts
Tax debts sorted
by delinquency period
73
Total amount of
late payment
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Number of late
payment times
75
Late payment
days
76
Change in total
tax debts
77
Extent of tax-related violations
Total times that
the enterprise incurs penalties for tax-related violations
78
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79
Nature and severity of the
violations detected through audits or inspections
Latest
audit/inspection period
80
Number of
tax-related violations detected through audits or inspections at the
enterprise’s headquarters
81
82
Tax amounts
payable, deducted, refunded and/or increase in tax payable due to loss
reduction as detected through tax audits or inspections
83
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Number of
invoices used, cancelled, lost, burned or otherwise destroyed
84
Total times the
enterprise incurs penalties for invoice-related violations
85
Enterprise having transfer
pricing or suspicious transactions
Enterprise has
engaged in stake transfer, joint venture or association transactions
86
Non-deductible interest
expenses on transfer pricing transactions
87
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88
Results of assessment of
taxpayer’s compliance with tax laws
Taxpayer’s
compliance level
89
Results of compliance assessment
and taxpayer risk classification given by relevant authorities
Results of
assessment of the taxpayer’s compliance with regulations of laws on customs,
accounting and corporate statistical and financial reporting, and taxpayer
risk classification given by competent regulatory authorities
90
Signs of risk in each period
Tax
administration objectives and requirements in each period
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Selected
randomly for managerial purposes of each period
92
Signs of risk as prescribed by
law
Taxpayer’s signs
of risk prescribed in tax policies and other relevant policies
93
Other assessment criteria
Compliance with
regulations of law on taxation, customs, accounting, statistics, finance and
other relevant sectors or fields
94
Information on
investment, import and export of goods/services
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Other signs of
risk or tax-related violations
96
Distribution of
dividends to shareholders
97
Other assessment
criteria