Vietnam to boost number of employer tax audits Vietnam to boost number of employer tax audits

Vietnam to boost number of employer tax audits
26 Mar 2018

Vietnam’s General Department of Taxation has asked local tax offices to create a tax audit plan for 2018 and boost the number of tax audits they undertake in their area.

According to Dezan Shira & Associates’ Vietnam Briefing, local tax officials will conduct on-site tax audits of at least 18.5% of taxpayers in their region, up from 2017’s target of 18%. At least 1% of these taxpayers will face tax inspections, while the rest will be subjected to tax examinations. Those facing tax audits will be selected based on the tax probable risk system (TPR) system.

Tax audits will mainly focus on:

  • VAT-refund-claiming taxpayers;
  • Taxpayers involved in sectors that generate significant revenues such as oil and gas, petroleum, private hospitals (medical centres), airlines, credit institutions, pharmaceutical companies, hotels and casinos, lottery companies, seaports, airports, and multinational companies;
  • Firms involved in investment project transfers, capital transfers, and franchising;
  • Enterprises undertaking numerous transactions with related parties, including those that have reported continuous losses or lower profit margins than other companies in the same sector;
  • Organisations engaged in up-and-coming sectors such as multi-level trading, gaming and digital technology-based services;
  • Other sectors such as real estate, construction material manufacturers, natural resource exploitation, fast-moving consumer goods and automobile manufacturers/traders.

The move means that organisations should have a tax risk management system in place to help them identify and manage their key areas of tax risk.

 Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

Vietnam’s General Department of Taxation has asked local tax offices to create a tax audit plan for 2018 and boost the number of tax audits they undertake in their area.

According to Dezan Shira & Associates’ Vietnam Briefing, local tax officials will conduct on-site tax audits of at least 18.5% of taxpayers in their region, up from 2017’s target of 18%. At least 1% of these taxpayers will face tax inspections, while the rest will be subjected to tax examinations. Those facing tax audits will be selected based on the tax probable risk system (TPR) system.

Tax audits will mainly focus on:

  • VAT-refund-claiming taxpayers;
  • Taxpayers involved in sectors that generate significant revenues such as oil and gas, petroleum, private hospitals (medical centres), airlines, credit institutions, pharmaceutical companies, hotels and casinos, lottery companies, seaports, airports, and multinational companies;
  • Firms involved in investment project transfers, capital transfers, and franchising;
  • Enterprises undertaking numerous transactions with related parties, including those that have reported continuous losses or lower profit margins than other companies in the same sector;
  • Organisations engaged in up-and-coming sectors such as multi-level trading, gaming and digital technology-based services;
  • Other sectors such as real estate, construction material manufacturers, natural resource exploitation, fast-moving consumer goods and automobile manufacturers/traders.

The move means that organisations should have a tax risk management system in place to help them identify and manage their key areas of tax risk.

 Emma Woollacott

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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