Representatives of Sao Da Lat Joint Stock Company in Lam Dong recently received a tax inspection decision with the following content: "Inspection of tax law compliance for value added tax, corporate income tax, personal income tax and land rental-related revenues"; inspection period "from 2018 to 2023 and related periods".

In particular, the phrase “relevant periods” made this business representative react.

Sharing with PV.VietNamNet, a representative of this company said: " The inspection period is the period of time for implementing policies, laws, assigned tasks and powers, regulations on professional and technical expertise, and management rules in the industry and field of the inspected subject that are considered and evaluated during an inspection ."

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Businesses question wording in tax inspection decisions. Photo: Nam Khanh

Comparing current legal regulations, this person said: “To avoid duplication in inspection activities and ensure compliance with the provisions of the Inspection Law, when conducting inspection activities, the inspection agency must issue an inspection decision, clearly stating the scope of the inspection, including the inspection content (specifically what work will be inspected) and the inspection period (specifically stating from which year to which year), and is not allowed to write in general terms to avoid wording and then conduct inspection activities beyond the scope permitted by the Inspection Law (indefinite inspection period) ”.

According to the common understanding of accounting and tax, the phrase "relevant periods" is understood as from the time the company is established until its dissolution, because accounting and tax figures are always cumulative, from year to year, so any period can be a "relevant period".

According to the representative of this enterprise, if the tax authority deliberately attaches the phrase “related periods” and then forces the enterprise to explain, the enterprise will have to go back to the records of many previous years, including years (accounting periods) that have been inspected, examined and closed by the tax authority or relevant authorities. This causes the enterprise to lose a lot of time, effort, and human resources, affecting its legal production and business activities.

This person said that, according to current regulations, after the inspection agency has conducted an inspection and issued an inspection conclusion, only the superior agency of the previous inspection agency and only when one of the five cases specified in Clause 1, Article 56 of the Inspection Law occurs can re-inspect; the statute of limitations for inspection is only within 2 years from the date of signing and issuing the inspection conclusion.

Responding to VietNamNet Newspaper's question about "Is the inspection decision stating the inspection time with the additional phrase "relevant period" in accordance with the law on inspection?", Lam Dong Tax Department cited Article 113 of the Tax Administration Law No. 38/2019/QH14, which stipulates tax inspection cases including: " 1. When there are signs of violations of tax laws; 2. To resolve complaints, denunciations or implement measures to prevent and combat corruption; 3. At the request of tax management based on the results of risk classification in tax management .

Along with that, the Tax authority also cited Clause 10, Article 2 of Inspection Law No. 11/2022/QH15 on the inspection period.

Based on the above regulations, in case an enterprise shows signs of tax risks, the tax authority will include them in the inspection and examination plan to conduct inspections and examinations to handle tax law violations of the periods of violation to prevent loss of state budget revenue.

According to the tax authority, Sao Da Lat Joint Stock Company has self-determined corporate income tax exemption incentives for the project "Sao Da Lat Luxury Resort" in Lam Dong according to the Investment Incentive Certificate.

However, based on the Government's regulations on guidelines for implementing the Investment Law and the Government's regulations on implementing the Law on Corporate Income Tax, the company's project is not in the list of preferential investment areas; the company's field of operation is providing services (revenue from selling tourist tickets).

Therefore, the company is not eligible for corporate income tax exemption or reduction according to Decree No. 24/2007/ND-CP dated February 14, 2007 of the Government.

Through risk analysis, Lam Dong Provincial Tax Department issued Document No. 4686 dated September 8, 2023 to Sao Da Lat Joint Stock Company regarding the review and adjustment of tax obligations arising due to not enjoying corporate income tax incentives.

However, the company has not made additional declarations of corporate income tax and is not entitled to incentives.

“Based on risks and to avoid loss of state budget revenue, the tax authority includes in the inspection and examination plan to conduct inspections and examinations to handle tax law violations in the periods of violations. Therefore, the inspection decision stating the inspection time with the additional phrase 'relevant period' is in accordance with legal regulations,” the tax authority affirmed.

In the latest development, Sao Da Lat Company has just filed a lawsuit against the Lam Dong Provincial Tax Department at the Lam Dong Provincial People's Court.