According to the General Department of Taxation, in 2023, with the strong direction of the National Assembly, the Government, the Ministry of Finance and the efforts of tax authorities at all levels, the management of value-added tax (VAT) refunds of the entire tax sector in the last months of the year has had many changes and achieved more positive results than before, contributing to creating conditions for businesses to recover, develop production and business, and export goods; at the same time, the inspection and tax refund inspection work has been carried out effectively, thereby detecting and handling many violations of invoices and VAT refunds.
However, some provincial and municipal Tax Departments have not been proactive in organizing the implementation of VAT refund management, and there are still delays in processing VAT refund dossiers.
Accordingly, in order to continue to better handle VAT refund dossiers, in 2024, the General Department of Taxation requests the Tax Departments to urgently carry out the following tasks:
Firstly, the Director is fully responsible for the management of VAT refunds in the area, is responsible for allocating sufficient resources, directing the organization to implement tax refunds within the authority and in accordance with legal regulations; thoroughly informing all cadres and civil servants about the discipline of the industry, the authority, obligations and responsibilities of cadres and civil servants assigned to VAT refunds, ensuring that tax refund dossiers of taxpayers are processed within the time limit (06 working days for dossiers classified for pre-refunds and 40 days for dossiers classified for pre-inspection from the date the tax authority issues the Notice of acceptance of the taxpayer's refund request dossier); ensuring that tax refunds are processed for the right subjects and cases eligible for refunds in accordance with the provisions of tax law and tax management law.
Based on the specific tax management work of each locality, the Director of the Tax Department shall take measures to strengthen management and monitor the implementation progress of departments and civil servants assigned tasks related to handling VAT refund dossiers.
Second, review enterprises with export activities of goods, services and investment projects in the area to proactively propagate and guide right from the stage of declaring tax declaration dossiers, declaring tax refund dossiers and tax refund procedures according to the provisions of Decree 126/2020/ND-CP and Circular 80/2021/TT-BTC to support enterprises to limit difficulties in preparing tax refund dossiers to ensure timeliness, completeness and compliance with regulations.
Third, the organization receiving the VAT refund application must comply with the components and procedures prescribed in Article 28 of Circular 80/2021/TT-BTC. In case the application is not accepted due to insufficient procedures, it must notify the taxpayer in writing, clearly stating the reasons for not accepting the application as prescribed in Article 32 of Circular 80/2021/TT-BTC.
Fourth, for enterprises that have received tax refunds, assign units to proactively review and collect information to build a database of information on VAT refund enterprises, information on related parties (suppliers of goods and services to tax refund enterprises, information on import customers of tax refund enterprises) according to tax refund periods to have sufficient information to serve the analysis and assessment of risks for tax refund enterprises and related parties, on that basis, select subjects to conduct post-tax refund inspections for enterprises that have received tax refunds and inspect and examine related parties (in order of priority for enterprises that continue to receive tax refunds in 2024).
Information collection, assessment and risk analysis must be based on each specific tax management file and information and tax management practices in the area for implementation; fully apply the risk management principles prescribed in the 2019 Tax Management Law, implementing guidelines, business processes and sets of criteria, risk indicators and professional training guidance documents of the General Department of Taxation.
In case the supplier of goods and services is found to be at high risk, the tax authority managing the tax refund enterprise shall propose to supplement the inspection and examination plan to conduct inspection and examination of the supplier of goods and services to the tax refund enterprise according to regulations; or shall issue a written request to the tax authority managing the supplier of goods and services to propose to supplement the inspection and examination plan of the supplier of goods and services to the tax refund enterprise.
The tax authority managing the party providing goods and services to the tax refund enterprise, upon receiving a written request from the tax authority managing the tax refund enterprise, must propose an additional inspection and examination plan to conduct an inspection and examination of the party providing goods and services to the tax refund enterprise; or promptly provide information on the inspection, examination, and handling of violations to the tax authority managing the tax refund enterprise. In case, through analysis and assessment, it is determined that the party providing goods and services is not in the high-risk category, it must notify the tax authority managing the tax refund.
Fifth, the Tax Authority shall apply professional measures and perform tasks to resolve VAT refund dossiers in accordance with the provisions of Articles 34 and 35 of Circular 80/2021/TT-BTC.
For VAT refund applications classified as pre-audited and being checked and verified for eligible tax amounts, taxpayers must be notified of the reason for not making the refund yet because verification is still required to ensure publicity and transparency. Tax authorities must make tax refunds for taxpayers for tax amounts that have been checked and verified as eligible for refund, without waiting for the full verification results to make tax refunds for taxpayers according to the provisions of Article 34 of Circular 80/2021/TT-BTC.
For VAT refund applications that do not meet the conditions for refund or are not eligible for refund, the Tax Department shall issue a written notice in response to the taxpayer according to form No. 04/TB-HT issued with Circular 80/2021/TT-BTC.
For tax refund applications of exporting enterprises that are being inspected and verified but have exceeded the prescribed settlement period, if the inspection and verification results up to the deadline for settling tax refund applications have not detected any tax fraud, the tax authority shall base on the application and accompanying documents provided by the enterprise to determine the tax amount eligible for tax refund and carry out tax refund settlement according to regulations.
In case after handling the tax refund, the tax authority discovers that the enterprise has made an incorrect declaration of the tax amount requested for refund, the tax authority shall recover the refunded tax amount, impose a penalty and calculate late payment fees (if any) according to regulations, and the enterprise shall be fully responsible before the law for its violations.
Sixth, proactively coordinate with competent authorities to prevent the abuse of VAT refund policies to appropriate the state budget. For tax refund application dossiers, if the Tax authority detects fraudulent acts and signs aimed at profiting from tax refunds from the state budget, it shall consolidate the dossier to transfer to the police for investigation, and at the same time notify the taxpayer in writing and base on the conclusion of the competent authority to handle according to Article 34 and Article 35 of Circular 80/2021/TT-BTC.
Seventh, on inspection work to resolve VAT refund dossiers:
+ Promote the exploitation and synthesis of information from the industry's existing information technology application system and information received from third parties (Customs, Banks, etc.) to conduct tax refund inspections and supervision in accordance with the law. The Tax Department shall organize tax refund inspections in accordance with the provisions of Articles 77, 110, 112, and 115 of the 2019 Law on Tax Administration and implementing documents, and the Tax Inspection Procedure issued with Decision 970/QD-TCT dated July 14, 2023.
+ For files classified for pre-refund inspection, the Tax Department shall organize the assignment and implementation of the inspection of tax refund files immediately upon receipt of the files. During the inspection process, if there is a force majeure reason that prevents the inspection from continuing, the Head of the Inspection Team shall report to the person issuing the Inspection Decision to issue a Notice of temporary suspension of inspection.
Reasons of force majeure are implemented according to the provisions of Clause 27, Article 3 of the Law on Tax Administration 2019 and Clause 1, Article 3 of Decree 126/2020/ND-CP. The leaders of the Tax Department and the leaders of the tax inspection and examination department are responsible for organizing the supervision of each inspection team to ensure that the procedures and order are in accordance with the provisions of the Law on Tax Administration 2019 and the tax inspection process issued with Decision 970/QD-TCT dated July 14, 2023.
+ If the tax refund settlement period has expired and there is no response from the competent authority, the Tax Department shall issue a document urging and requesting the competent authority to comment on the reasons for not being able to provide information; to complete the inspection on time and settle the tax refund dossier according to the provisions of Point d, Clause 1, Article 34 of Circular 80/2021/TT-BTC.
+ In case an enterprise subject to an approved inspection and examination plan at the taxpayer's headquarters has a tax refund application subject to pre-refund inspection, the Tax Department shall prioritize the inspection of tax refund application documents, arrange and organize resources to implement the plan in accordance with the regulations on tax inspection and examination, regulations on tax refund settlement in the 2019 Tax Administration Law and implementing documents.
Eighth, post-refund inspection and examination must be carried out resolutely to strictly control VAT refunds to ensure compliance with policies and regulations of the law. The Tax Department assigns tasks and assigns post-refund inspection tasks specifically and clearly to each department. The tax authority shall conduct post-refund inspection and examination for tax refund decisions subject to pre-refund and post-inspection in accordance with the provisions of Articles 77, 110, 112, and 115 of the 2019 Tax Administration Law and its implementing documents, the provisions of the 2022 Inspection Law and its implementing documents, the Tax Inspection Procedure issued with Decision 1404/QD-TCT dated July 28, 2015, and the Tax Inspection Procedure issued with Decision 970/QD-TCT dated July 14, 2023.
In case of detecting enterprises violating the law on using illegal invoices or illegally using invoices, profiting from tax refunds and other violations of the law to appropriate the state budget, coordinate with competent authorities to strictly handle them according to the provisions of law.
For the tax amount that has been settled according to the pre-refund dossier for the taxpayer, but when the post-refund inspection and examination is completed at the taxpayer's headquarters, there are still no responses or verification results from the relevant agencies, the Tax authority must clearly state in the inspection record and inspection and examination conclusion that there is not enough basis to conclude that the tax amount is eligible for a tax refund. When there are responses and verification results from the relevant agencies, the Tax authority determines that the refunded tax amount is not eligible for a tax refund, it shall issue a Decision on tax refund recovery and impose penalties and late payment fees (if any) according to the provisions of Article 77, Article 113 of the Law on Tax Administration 2019 and Article 39 of Circular 80/2021/TT-BTC.
Ninth, promptly resolve and completely handle pending tax refund applications from 2023, ensuring the deadline for handling tax refund applications as prescribed in Article 75 of the 2019 Law on Tax Administration; in case the taxpayer does not agree with the decision of the Tax Authority, he/she has the right to file a complaint or initiate a lawsuit in accordance with the law on tax administration.
Proposal to amend, abolish and supplement many new regulations on VAT refund
The draft Law on VAT (amended) consists of 4 chapters and 16 articles: General provisions; Basis and method of tax calculation; Tax deduction and refund; Implementation provisions.
Basically, the draft Law still inherits the current Law but has been adjusted and supplemented to suit the policy content. Specifically, the draft Law retains the provisions in 5 articles of the current Law on Value Added Tax including: scope of regulation, VAT, taxable objects, tax basis, tax calculation method. The draft removes 1 article of the current Law on Value Added Tax regulating invoices and documents.
Regarding the subjects applying the 0% tax rate, the draft Law adds specific provisions on the names of export services subject to the 0% VAT rate as follows: export services are services provided to foreign organizations and individuals; adds provisions on "goods sold in quarantine areas to individuals (foreigners or Vietnamese) who have completed exit procedures" and "goods sold at duty-free shops" subject to the 0% VAT rate; adds provisions on assigning authority to the Minister of Finance to guide the procedures, documents and conditions for applying the 0% tax rate to exported goods and services.
In addition, the draft Law adds specific provisions on 3 groups of goods that are not subject to the 0% tax rate, including: imported cigarettes, alcohol, and beer that are then exported; domestically purchased gasoline and oil sold to cars of business establishments in duty-free zones, cars sold to organizations and individuals in duty-free zones; goods and services provided to individuals who are not registered to do business in duty-free zones.
The draft Law also adds a provision that the 0% tax rate cannot be applied to products and services provided on digital platforms according to Government regulations to ensure flexibility in determining whether these products and services are consumed in Vietnam or abroad at the time of provision. Determining the place of consumption of products and services provided on digital platforms is very complicated, currently only based on the declaration of the taxpayer.
In addition, the content that is also of public interest is the proposal to amend, abolish and supplement many new regulations on VAT refunds stipulated in Article 14.
The draft Law on VAT (amended) has been added to the law and ordinance making program for 2024, will be commented on at the 7th session, May 2024 and is expected to be approved at the 8th session, October 2024.
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