- The basis for the formation of the provision of account data
- Regulations on banks providing account information of organizations and individuals to tax authorities
- How does it affect business organizations and individuals?
- What is the solution for businesses in the current situation?
- What can EXPERTIS do for businesses?
The basis for the formation of the provision of account data #
According to the Organization for Economic Co-operation and Development (OECD)'s Report on Improving Access to Information for Tax purposes 2020, insufficient access to banking information is an obstacle to tax administration. and law enforcement. According to the announcement of the Tariff Legal Network (TJN) on November 20, 11, countries are losing a total of more than 2020 billion USD in taxes due to international corporate tax abuse and evasion. private tax.
The lack of access to banking information has facilitated money-laundering schemes to achieve success by handling criminal proceeds of illicit origin through the banking system. row. This also promotes tax inequality between taxpayers who comply with tax laws and those who seek to avoid taxes.
Moreover, if the tax authorities do not have the authority to request banking information, it will significantly reduce tax revenue. Lack of access to banking information can increase tax administration and compliance costs for taxpayers.
Refusing to provide customer information to tax authorities can also lead to voluntary tax non-compliance, especially as more and more individuals receive income from Google's online advertising services, Yahoo, Youtube or e-commerce business through e-commerce platforms such as: Amazon, Lazada, Tiki, Shopee, etc. Revenue from online advertising services and online sales may not be declared. or the declaration is not true, the transaction data may be modified or deleted after implementation. Tax evasion is common in all fields, causing serious losses to the State budget.
Regulations on banks providing account information of organizations and individuals to tax authorities #
Decree 126/2020/ND-CP guiding a number of articles of the Law on Tax Administration effective from December 5, 12 has new regulations on the responsibilities of commercial banks in providing personal account information. pay taxes to tax authorities for inspection, examination and determination of tax obligations.
Article 30. Duties and powers of commercial banks and payment intermediary service providers
"2. Commercial banks are responsible for providing information about taxpayers' payment accounts opened at banks to tax authorities as follows:
a) At the request of the tax authority, the commercial bank shall provide information about the payment account of each taxpayer, including: name of account holder, account number according to tax identification number issued by the authority. tax administration, account opening date, account closing date.
b) The provision of account information under Point a of this Clause shall be performed for the first time within 90 days from the effective date of this Decree. Account information is updated monthly for 10 days of the next month. The method of providing information is in the electronic form.
c) Commercial banks provide information on transactions through accounts, account balances and transaction data at the request of the head of the tax administration agency for the purpose of inspection and determination of tax definitions. tax authorities must pay and take measures to enforce enforcement of administrative decisions on tax administration in accordance with the tax law.
d) Tax administration agencies are responsible for information confidentiality and are fully responsible for the safety of information in accordance with the provisions of the Tax Administration Law and other relevant laws.. "
Accordingly, information such as account transactions, balances and transaction data are provided by the bank at the request of the head of the tax authority. This serves the purpose of inspection, examination and determination of tax liabilities… Tax authorities are responsible for information confidentiality and are fully responsible for the safety of information.
Not only that, every month, commercial banks must provide information about each taxpayer's payment account, including: name of the account holder, account number according to the tax code issued by the tax authority, date account opening, account closing date.
In October 10, the Director of Inspection and Inspection (General Department of Taxation) said that he had combined and requested 2021 commercial banks to provide information so that the industry could have tax management data. According to the data provided by banks, in Hanoi alone, there are more than 45 organizations and individuals having online sales activities with a total income of 18.300 billion VND from Google, Facebook, Youtube, etc. instructing organizations and individuals to declare and pay tax and collect nearly 1.462 billion dong.
In addition, banks must also deduct and pay tax obligations on behalf of overseas suppliers with permanent establishments in Vietnam doing e-commerce business, on digital platforms with organizations and individuals in Vietnam. country.
Specifically, after determining that the overseas supplier has not registered, declared and paid taxes, the General Department of Taxation will notify the commercial banks, the payment intermediary so that these units can identify the transaction accounts. and deduct, pay on behalf of tax obligations.
If individuals purchase goods and services by card or other forms of banks, payment intermediaries cannot deduct or pay on behalf of, these units are responsible for monitoring the amount transferred to overseas suppliers. sent to the General Department of Taxation monthly.
How does it affect business organizations and individuals? #
- Information security, disclosure of privacy issues: Many organizations and individuals are very worried about the information in their accounts being exposed. Especially confidential information about business activities, as well as other information beneficial to competitors, when the account is provided to the tax office without the consent of the account holder.
- Explanation of transactions that are not in the books but are shown in the subsidiary books, bank statements: The difference in transactions in the bank's subsidiary books and accounting books when the tax authorities compare the records, will be leading to the need for organizations and individuals to explain the reasons for such differences.
- It is difficult or inappropriate to explain why the data related to purchase and sale transactions of individuals or business organizations in the account is different from the tax declaration: The arising of too many transactions in one or more bank accounts , as well as the fact that the accounting books do not promptly reflect all arising in the report, it will make it difficult to track, manage as well as remember to explain in detail each difference.
- Collection of corporate income tax, personal income tax and late payment penalty from under-declaration of taxable revenue: When no explanation is available, organizations and individuals are subject to tax assessment, which means that they have to incur taxes. additional taxes payable and associated penalties.
- The transaction account was blocked for enforcement at the request of the tax authority.
- Affecting the reputation and image of individuals and organizations doing business: The Bank will block the accounts of organizations and individuals in order to collect tax at the request of the tax authorities after detecting the following violations. violations.
- Difficulties in business operation when the two agencies are paying attention: When there are signs of insufficient revenue declaration, lack of tax, as well as transaction abnormalities in the bank's sub-book, the organization, individuals are likely to be noticed by the tax authorities in their future production and business activities.
What is the solution for businesses in the current situation? #
- Understand and thoroughly understand the current regulations that are directly affecting business organizations and individuals, especially online business, business on e-commerce platforms, social networks.
- Regularly check and compare transaction data across bank accounts and accounting books to detect any discrepancies.
- Rebuild the accounting method to conform to the requirements of current regulations.
- Identify existing problems that are not in line with regulations, leading to risks for businesses that may encounter in the future, thereby making adjustments, declaring and paying additional taxes, if any.
- Check and reconcile revenues and expenditures related to revenue (including cash) through business channels to avoid under-declaring sales revenue.
- Collect all documents when having transactions with foreign contractors as proof of expenses in the period, avoiding exclusion when calculating tax.
What can EXPERTIS do for businesses? #
As an expert in the field of tax - accounting, with more than 18 years of experience, we understand how the impact of legal regulations affects each business. Since then, we have consulted, answered problems as well as provided services suitable to the needs of businesses. With the goal of service quality being put on top, we become a companion with many businesses in the process of building and developing.