Issue of criteria and indicators for risk management

1. Based on the reality, the General Department of Taxation shall develop and present the criteria to the Ministry of Finance to assess the tax law and taxpayer’s risk to meet the tax management in each period and in accordance with the current regulations of tax law and state management policies, including:

– Criteria for assessment of taxpayer’s compliance with tax law;

– Criteria for assessment and rating of taxpayer’s risk level;

– Criteria for selection of case for verification of tax registration;

– Criteria for selection of tax declaration dossier for verification at the head office of tax management body;

– Criteria for classification and settlement of tax refund dossier and selection of dossiers with signs of risk to add them in the verification and inspection plan after tax refund;

– Criteria for selection of taxpayers with signs of risk to prepare the verification and inspection plan at the taxpayer’s head office;

– Criteria for management and monitoring of tax debt collection and application of measures to enforce the tax administrative decisions;

– Criteria for identification of risk level to implement the regulation on management and use of invoices and documents as prescribed by law and identify the cases of taxpayer’s signs of risks to add them in the verification and inspection plan for creation, printing, issue, management and use of invoices and printed matters of tax.

2. The General Director of General Department of Taxation shall develop and present the sets of indicator for assessment of tax law and taxpayer’s risk to the Ministry of Finance for issue to meet the tax management requirements in each period and in accordance with the current regulations of tax law and state management policies, including:

– Indicators for assessment of taxpayer’s compliance with tax law;

– Indicators for assessment and rating of taxpayer’s risk level;

– Indicators for selection of cases for verification of tax registration;

– Indicators for selection of tax declaration dossier for verification at the head office of tax management body;

– Indicators for classification and settlement of tax refund dossier and selection of dossiers with signs of risk to add them in the verification and inspection plan after tax refund;

– Indicators for selection of taxpayers with signs of risk to prepare the verification and inspection plan at the taxpayer’s head office;

– Indicators for management and monitoring of tax debt collection and application of measures to enforce the tax administrative decisions;

– Indicators for identification of risk level to implement the regulation on management and use of invoices and documents as prescribed by law and identify the cases of taxpayer’s signs of risks to add them in the verification and inspection plan for creation, printing, issue, management and use of invoices and printed matters of tax.

Article 16. Assessment of taxpayer’s compliance with tax law

1. The tax authorities shall assess the compliance with tax law of the taxpayers who are operating to apply measures of tax management and other necessary operational measures in tax management to the taxpayers.

2. The assessment of compliance with tax law to the taxpayers shall be done on the professional information system and automatic assessment system based on the conditions in Clause 3, Article 16 of this Circular to classify the taxpayers who comply with the tax law according to three (03) categories as follows:

a) Category 1. The taxpayers well comply with the tax law (hereafter referred to as good compliant taxpayers)

b) Category 2. The taxpayers comply with the tax law at moderate level (hereafter referred to as moderate compliant taxpayers)

c) Category 3. The taxpayers comply with the tax law at low level (hereafter referred to as low compliant taxpayers)

3. Conditions for assessment of taxpayer’s compliance with tax law

a) The taxpayers are assessed to be good compliant taxpayers if meeting all of the following conditions:

a.1) Operating and making timely and complete declaration and paying prescribed taxes; the taxes paid are consistent with scale and investment and business area of enterprises; well complying with regulations on management and use of printed matters of tax within two (02) years and earlier to the date of assessment.

a.2) The proportion of payment of taxes related to production and business (value-added tax, corporate income tax …) on the turnover has reached over the average level compared with the average level of enterprises doing business and production of the same areas and industries.

a. 3) Within two (02) consecutive years and earlier to the date of assessment, the taxpayers do not undergo one of the form of violation handling as follows:

– Not being sanctioned for administrative violation on tax and printed matters of tax with the total fines beyond the sanction authority for acts of violation of tax procedures of the Head of Branch of Taxation as prescribed by law on handling of administrative violation on tax.

– Not being sanctioned for acts of tax evasion and tax fraud by the competent state bodies.

– Not being sanctioned for acts of failure to comply with decision on tax verification and inspection, enforcement of administrative decision on tax by the tax authorities.

– Not being assessed as failure to comply with law on enterprise’s accounting and financial statistics by the competent state authorities through inspection, verification, management and monitoring.

– Not being assessed as failure to comply with law on tax and customs by the competent state authorities through inspection, verification, management and monitoring.

– Not having prosecuted cases, the taxpayer’s legal representative has not been prosecuted for acts of violation of tax.

a.4) Not having tax debts, amount of late payment, fines, fees and charges of the state budget as stipulated by the law on fees and charges; revenues of the state budget as stipulated by the law on land collected by the tax authorities; other revenues of the state budget as stipulated by the law except for taxes extended as prescribed by law because the time of extension is not over at the time of assessment.

b) The taxpayers are assessed as the moderate compliant taxpayers and are not subject to the cases specified under Point a and c, Clause 3, Article 16 of this Circular.

c) The taxpayers are assessed as the low compliant taxpayers and are subject to one of the following cases:

c.1) Being subject to one of the following cases to the time of assessment:

– Not yet making tax declaration and submitting tax declaration dossier completely and on schedule of at least 01/3 (one third) of number of prescribed declaration forms within 12 months;

– The periods of negative declaration of value added tax are continuous and above the average level compared with the general average of enterprises doing business and production of the same area and business line;

– Having the cumulative number exceeding 50% (fifty percent) of owner’s equity of enterprise to the time of assessment;

– The taxpayers are subject to the enforcement of administrative decision on tax, debt of late payment amount, fines, fees, charges or other revenues to be paid to the state budget as prescribed by law.

c.2) Within 02 (two) continuous years and earlier to the date of assessment; or from the date of establishment to the date of assessment for the taxpayers having the time of establishment of less than 02 (two) years subject to one of the cases as follows:

– Having two (02) times or more of being sanctioned for administrative violation of tax, printed matters of tax with the total fines beyond the sanction authority for acts of violation of tax procedures of the Head of Branch of Taxation as prescribed by law on handling of administrative violation on tax.

– Being sanctioned for acts of tax evasion and tax fraud or sanctioned in the field of accounting by the competent state bodies.

– Being sanctioned for acts of failure to comply with the decision on verification and inspection of tax and enforcement of administrative decisions on tax by the tax authorities.

– Having acts of violation of criminal law; being prosecuted and investigated.

– Being assessed as failure to comply with law on tax and customs by the competent state authorities through inspection, verification, management, monitoring and assessment.

c.3) Having the illegal acts of use of printed matters of tax or illegally using the printed matters of tax.

4. The General Department of Taxation must:

a) Develop the operational information system and database system on taxpayers automatically serving the tax authorities at all levels in assessing the taxpayer’s compliance with law.

b) Guide the consistent application of conditions for assessment of taxpayer’s compliance with law as specified in Clause 3, Article 16 of this Circular.

c) Stipulate the assessment period of taxpayer’s compliance with law.

d) Direct and guide the tax authorities at all levels in collection and updating of information to ensure the assessment of taxpayer’s compliance with law.