Many high risk items
Through reviewing tax management information, the tax authority found that some businesses refunded export tax on cassava, wood, and forestry products with high tax risks. Accordingly, the tax authority must conduct inspections and verifications.
For cassava and wood and forestry products, the tax refunded arises at the intermediate stage (due to the direct purchase from forest growers without processing or only through normal preliminary processing, which is not subject to value added tax), at the intermediate stage, mainly management costs, logistics costs arise... Therefore, some subjects have taken advantage of the state's policy mechanism to cheat and appropriate tax refunds.
Recently, the Ministry of Finance has directed the General Department of Taxation to coordinate with professional units of the Ministry of Public Security to detect and handle a number of cases of tax evasion and appropriation of value-added tax (VAT) refunds, such as: The case of illegal trading of VAT invoices and tax evasion occurring in Phu Tho; tax refund violations in Ninh Binh and Vinh Phuc...
The General Department of Taxation also identified a number of typical fraudulent acts.
These are subjects who take advantage of the open policy in the regulations on business establishment to establish enterprises not for the purpose of production and business but for the purpose of buying and selling VAT invoices to profit and defraud tax money. Accordingly, some subjects have established a chain of enterprises (with legal representatives being relatives, family members or hired representatives) to buy and sell in circles, using illegal invoices to legalize input for tax refund enterprises.
Brokers create fake lists to purchase wood directly from farmers, directly from livestock farmers or buy and sell illegal invoices to deduct taxes, legalize floating goods for the purpose of not having to declare and pay VAT (5%) at the intermediary stage of trade.
Enterprises that request VAT refunds use illegal invoices (purchased from enterprises that do not have production or business activities) or use invoices from enterprises that have abandoned their business addresses or continuously changed their operating status in many different localities to declare input VAT deductions and prepare VAT refund requests.
"The tricks and behaviors of tax refund fraudsters mainly occur at the intermediary stage of buying and selling goods," said the General Department of Taxation.
Checking 120 businesses, 110 intermediary businesses "disappeared"
According to the General Department of Taxation, some intermediary enterprises show signs of high risk, such as temporarily suspending business or absconding after issuing invoices to export enterprises (F1). The declaration of revenue and tax between intermediary enterprises does not match, the selling enterprise (F2, F3, ...) declares small revenue but the purchasing enterprise (F1) declares large input VAT deductions. Payments via banks also show signs of risk, such as transactions occurring on the same day and the same person withdrawing money.
Through the review, inspection and tax refund examination at 120 enterprises, it was discovered that 110 intermediary enterprises had abandoned their business locations, stopped operations and were waiting for dissolution in the intermediary stage. The tax refund enterprises used input materials and purchased invoices from intermediary enterprises. The intermediary enterprises did not declare taxes, did not pay taxes and could not prove the origin of the raw materials and purchased goods. The budget has not yet collected taxes from these enterprises, but must resolve tax refunds for tax refund enterprises at the next stage.
"This is a pressure issue for tax authorities," the General Department of Taxation admitted. "Determining the amount eligible for tax refund must be based on the results of verifying whether the purchase and sale of goods is real or not, leading to many difficulties in handling the records."
Typically, in some cases, the application for cassava starch tax refund was informed by the foreign tax authorities that some Vietnamese enterprises had transactions with foreign enterprises that did not exist in the foreign tax authorities' database or existed but did not admit to having transactions with Vietnamese enterprises.
These are some tax refund applications that show signs of violating the law to appropriate tax money from the state budget, negatively affecting healthy businesses that comply with tax laws.
"After the tax authorities discovered some of the above-mentioned risk signs in tax refund applications, many businesses proactively sent documents to the tax authorities requesting to cancel their refund applications," said the General Department of Taxation.
The General Department of Taxation has directed local tax departments to further strengthen the control of VAT refunds for high-risk export items, focusing on instructing tax authorities at all levels on criteria for identifying risks in tax refunds, zoning the scope of verification for intermediary enterprises, providing guidance on verification and VAT refund inspection procedures, but also promptly handling VAT refund dossiers of taxpayers in accordance with regulations and tax management procedures.
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