General Department of Taxation "names" tax refund fraud tricks

Records subject to pre-refund inspection

The General Department of Taxation (Ministry of Finance) said that according to the provisions of the Law on Tax Administration, tax refund dossiers are classified into dossiers subject to pre-refund inspection and dossiers subject to pre-refund. In which, dossiers subject to pre-refund inspection include:

Firstly, the taxpayer's dossier requesting the first tax refund for each tax refund case is in accordance with the provisions of the tax law. In case the taxpayer has a tax refund dossier submitted to the tax authority for the first time but is not eligible for a tax refund according to the regulations, the next tax refund request is still considered a first tax refund request.

Second, the taxpayer's application for tax refund must be submitted within 2 years from the date of being prosecuted for tax evasion.

Third, tax refund dossiers upon delivery and transfer (for state-owned enterprises), dissolution, bankruptcy, termination of operations, and sale of organizations and enterprises.

Fourth, tax refund dossiers are classified as high tax risks according to the risk management classification in tax administration.

Fifth, the tax refund dossier is in the case of early tax refund but the deadline has expired according to the written notice of the tax authority and the taxpayer does not explain or supplement the tax refund dossier or explains or supplements the tax refund dossier but cannot prove that the declared tax amount is correct.

Sixth, VAT refund dossier for exported and imported goods not paid through commercial banks or other credit institutions according to the provisions of law.

For dossiers subject to pre-refund, if they meet the conditions for tax refund according to regulations, the Tax authority will promptly make the tax refund in accordance with regulations. For dossiers subject to pre-refund inspection, it is necessary to inspect to have a basis for tax refund settlement according to regulations.

Through reviewing tax management information, the Tax Authority found that some enterprises refunding export tax on cassava, wood, and forest products have high tax risks, so the Tax Authority must conduct inspections and verifications. For cassava, wood, and forest products, the refunded tax 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 VAT), 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.

Tricks and behaviors of tax refund fraudsters

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 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...

Through review and coordination with competent authorities, some typical fraudulent acts were identified as subjects taking 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 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 intermediate stage of buying and selling goods. Some enterprises in the intermediate stage show signs of high risk such as after issuing invoices to the exporting enterprise (F1), they temporarily stop doing business or abscond; the revenue and tax declarations between the intermediate enterprises do not match correctly, the selling enterprise (F2, F3, ...) declares small revenue but the purchasing enterprise (F1) declares large input VAT deductions; payments through banks also show signs of risk such as transactions taking place 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 the Tax authority, 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 dossier.

Typically, some cases of cassava starch tax refund applications, through information coordinated by foreign tax authorities, about some Vietnamese enterprises having transactions with foreign enterprises that do not exist in the database of foreign tax authorities or exist but do not admit to having transactions with Vietnamese enterprises. These are some tax refund application files with 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 enterprises proactively sent documents to the tax authorities to request cancellation of refund applications.

From the assessment of the complex and sophisticated developments in VAT refund fraud, the scope of which is cross-border, in order to strengthen the management of VAT refunds to ensure timeliness, speed, compliance with regulations, and avoid loss of State tax money, 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 guiding 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, but also promptly handling VAT refund dossiers of taxpayers in accordance with regulations and tax management procedures. In some cases, during the verification process, Tax authorities must coordinate with competent agencies and local authorities to clarify the legality of tax refund dossiers. Through risk analysis, only verify records with high risk factors in accordance with risk management principles prescribed in the Law on Tax Administration.

The verification results of the Tax authority and the verification coordination results from competent state agencies are one of the bases for the Tax authority to carry out VAT refunds according to the provisions of the Law on Value Added Tax, the Law on Tax Administration and implementing guidelines.

At the same time, the General Department of Taxation is reviewing regulations on tax refund procedures in legal documents to advise superior agencies, coordinate with business registration agencies, and increase reference to international experience on VAT refunds to ensure that regulations on subjects, conditions, records, and VAT refund procedures are unified and strict, helping VAT refunds to be timely and quick; at the same time, avoiding creating loopholes for subjects to take advantage of policies to profit and defraud taxes.

TM

Source: https://www.nguoiduatin.vn/tong-cuc-thue-diem-mat-cac-thu-doan-gian-lan-hoan-thue-a637787.html