Application of risk management in management of tax refund

1. The tax authorities shall receive the tax refund dossier, based on the classification of the database system of tax operation information on classification of taxpayers in settlement of tax refund dossier and selection for verification and inspection after tax refund specified in Article 19 of this Circular, they shall apply the appropriate measures in settlement and handling of tax refund dossiers.

a) Classification of settlement of tax refund dossiers.

– The General Department of Taxation, based on the classification of database system of tax operation information, shall identify the tax refund dossier subject to the tax refund first, verification later and vice versa.

– Where during the settlement of tax refund dossier, the tax authorities detect the taxpayers have signs of violation of tax law or customs law or in case the taxpayers did not explain or add their tax refund dossiers or did explain or add but failed to demonstrate the declared taxes are correct, the tax authorities shall change the form of classification of taxpayer’s tax refund dossier subject to tax refund first, verification later to verification first and tax refund later; the approval for change of classification must be updated in the operational information system.

b) Verification and inspection after tax refund (as required by the superior body) for the dossiers subject to the refund first, verification later:

The tax authorities shall choose the taxpayers for verification and inspection after tax refund for dossiers subject to the tax refund first, verification later based on the rating of taxpayer’s risk level specified in 19 of this Circular and must ensure the current regulations of law, particularly:

b.1) For the taxpayers subject to the cases specified under Point a, Clause 4, Article 41 of Decree No. 83/2013/ND-CP: Verification and inspection after tax refund shall be done within 01 (one) year after the date of tax refund decision in implementation order and rating of risk level from high to low.

b.2) For the taxpayers subject to the cases specified under Point b, Clause 4, Article 41 of Decree No. 83/2013/ND-CP: Verification and inspection after tax refund shall be done within 60 days after the date of tax refund decision for 100% enterprises with high risk level; verification and inspection is done towards 50% enterprises with risk level within 90 days; verification and inspection is done towards the 50% of remaining enterprises within 180 days;

2. The tax authorities at all levels, based on the result of classification of tax refund dossier and selection of taxpayers for verification and inspection after tax refund specified in Clause 1, Article 23 of this Circular to settle the tax refund dossier and do the verification and inspection of tax refund as prescribed by law.

3. Updating and feedback of result:

– The tax authorities shall receive the tax refund dossier specified under Point a, Clause 1 of Article 23 of this Circular and update information in the system of tax refund dossier and draft decision on tax refund; the General Department of Taxation shall give result feedback within 60 days. Based on such result feedback, the Department of Taxation shall issue the tax refund decision and automatically update such decision in the database system on taxpayers.

– The tax authorities shall carry out the verification and inspection towards the taxpayers specified under Point b, Clause 1, Article 23 of this Circular, right after the completion of verification and inspection, the result of verification and inspection must be updated fully and correctly in the operational information system for each specific case and give feedback on the result to the relevant superior body for timely aggregation, modification and addition of criteria for risk assessment for risk assessment and assessment of taxpayer’s compliance with tax law.

Article 24. Application of risk management in selection of cases for verification and inspection at the taxpayer’s head office

1. The tax authorities shall make the verification and inspection plan at the taxpayer’s head office every year as stipulated in Article 78 and 81 of the Law on Tax Management No. 78/2006/QH11 dated 29/11/2006 and Point 24, Article 1 of the Law No. 21/2012/QH13 dated 20/11/2012 amending and adding some articles of the Law on Tax Management, Article 49 of Decree No. 83/2013/ND-CP dated 22/7/2013 detailing the implementation of some articles of the Law on Tax Management and the Law amending and adding some articles of the Law on Tax Management and according to the rate of taxpayer’s risk level specified in Article 19 of this Circular to choose the cases for verification and inspection at the taxpayer’s head office.

The annual verification and inspection plan at the taxpayer’s head office must ensure the principles:

– The list of inspection must reach the percentage of 1%- 2% of the total operating enterprises and the list of verification must reach the percentage of 15%-18% of the total operating enterprises.

– The list of inspection shall be decided by the Minister of Finance and the list of verification shall be decided by the General Director of General Department of Taxation.

a) Selection of cases for inspection:

The tax authorities shall select the cases for inspection at the taxpayer’s head office must ensure:

– The number of case selected through analysis and assessment and rating of risk level is not less than 90% of the number of case inspected under the annual plan;

– The number of case randomly selected must not be greater than 10% of the number of case inspected under the annual plan;

b) Selection of cases for verification:

The cases where the taxpayers are rated at high risk level except that the selected cases to be included in the inspection plan specified under Point a, Clause 1, Article 24 of this Circular are selected for cases of verification. The selection of cases for verification at the taxpayer’s head office must ensure:

– The number of case selected through analysis, assessment and rating of risk level must not be less than 90% of number of case inspected under the annual plan;

– The number of case randomly selected must not be greater than 10% of the number of case inspected under the annual plan;

2. The General Department of Taxation shall develop and issue the operational procedure and define the responsibility of tax authorities at all level in preparing the tax verification and inspection plan.

3. The development and authority to approve the verification and inspection plan at the taxpayer’s head office; list of addition and modification of verification and inspection plan at the taxpayer’s head office specified in Clause 1, Article 24 of this Circular shall comply with the documents guiding the implementation of the Law on Tax Management and the Law amending and adding some articles of the Law on Tax Management.

4. Updating and feedback on result of verification and inspection at the taxpayer’s head office:

– The tax authorities shall perform the verification and inspection towards the taxpayers specified in Clause 1, Article 24 of this Circular and when issuing the decision on verification and inspection, they must update it in the system. During the verification and inspection, for cases of different opinions or problems…such contents must be updated immediately into the system; within 03 working days, the General Department of Taxation shall give feedback by the electronic form through the database system on taxpayers. Right after the completion of verification and inspection, update the result of verification and inspection into the operational information system fully and correctly for each specific case and give feedback of result of verification and inspection to the superior relevant unit for timely aggregation, modification and addition of criteria for risk management and for assessment of risk and compliance with tax law of the taxpayers.

– The heads of tax authorities at all levels shall issue the decision on handling of administrative violation of law on tax by the electronic form, in case of paper form, update it in the database “ List of taxpayers violating the tax law” and issue the Decision on public announcement “List of taxpayers violating the tax law” on the website of the General Department of Taxation.

5. The tax authorities shall receive the complaints and denunciation and settle them as prescribed by law on complaints and denunciation and update such information in the database system on taxpayers.