In 2016, the Tax Department implemented risk management in the planning of tax audits and inspections for all tax authorities at all levels, using information technology to analyze taxpayer risks.
The application of risk management in tax audit planning and on-site tax inspections has contributed to improved scientific rigor, flexibility, and accuracy, significantly reducing the workload and planning time, and ensuring the selection of high-risk taxpayers for inspection and audit.
1. Implementation of the 2017 inspection plan.
To ensure the timely development and approval of the 2017 tax inspection and audit plan, in line with the Ministry of Finance's guidelines, and to contribute to improving the effectiveness of tax inspections and audits throughout the entire sector, the General Department of Taxation issued Official Letter No. 4990/TCT-TTr dated October 27, 2016, requesting the Tax Departments of provinces and centrally-administered cities, and all subordinate Tax Sub-departments, to develop the 2017 inspection and audit plan according to the following objectives:
First, The 2017 inspection and audit plan at taxpayers' premises by the Tax Departments must cover at least 18% of the number of active taxpayers under their tax management.
Monday, The 2017 inspection and audit plan based on risk assessment must be implemented by applying risk information analysis applications to select taxpayers with tax risks from high to low for inclusion in the inspection and audit plan.
Tuesday, The 2017 thematic inspection and audit plan must be developed based on research and selection of themes and specific enterprises associated with each theme, in accordance with the actual business situation of enterprises within the managed area.
Wednesday, The inspection and audit plans of lower-level tax authorities must ensure the principle of avoiding overlap and duplication with the inspection and audit plans of higher-level tax authorities and the inspection plans of the Government Inspectorate, the State Audit Office, and the Inspectorate of the Ministry of Finance.
Thursday, When developing tax audit and inspection plans based on the risk principle, units should focus on auditing and inspecting businesses that have not been audited or inspected for many years (5 years or more), avoiding the current situation where some businesses are audited and inspected every year while others have not been audited or inspected for many years.
2. Inspection Plan 2017
To ensure that the inspection and audit plan is accurate, high-quality, effective, and in accordance with the Ministry of Finance's guidelines, while also avoiding overlap and duplication with the inspection and audit plans of higher-level tax authorities and the inspection plans of the Government Inspectorate, the State Audit Office, and the Ministry of Finance Inspectorate, the following points should be noted when developing the 2017 inspection and audit plan:
Regarding post-refund inspections and audits of value-added tax (VAT): Focus resources on post-refund inspections and audits in accordance with the Law on Tax Administration. Accordingly, the plan for post-refund inspections and audits must select high-risk businesses, mainly those with large refunds, unusual refund issues, and VAT refunds for goods exported across land borders… and ensure that at least 20% of the refund decisions issued during the year are inspected and audited. This inspection and audit must be conducted within one year from the date of the refund decision in cases stipulated in point a, clause 4, Article 41 of Government Decree No. 83/2013/ND-CP dated July 22, 2013.
Regarding the selection of businesses showing signs of risk in the use and trading of illegal invoices: Tax Departments can refer to the criteria for identifying businesses likely to print, issue, trade, or use illegal invoices to supplement the risk analysis criteria for selecting businesses to develop inspection and audit plans for 2017.
Regarding tax audits, the tax audit process stipulates that the number of taxpayers included in the annual audit plan must reach at least 60% of the assigned audit tasks. Therefore, tax authorities should base their audit plans on the assigned tasks, aiming for at least 60% of the assigned audit targets. However, they should not aim for 100%, but rather reserve a portion for unscheduled audits that arise during the year. This avoids the current situation where some tax departments plan for 100% of their annual audits, only to have to significantly reduce the number of businesses audited due to unscheduled audits.
For unscheduled inspections arising during the year, such as post-audit inspections at tax offices; final settlements for dissolution or conversion of shares; bankrupt businesses; or businesses showing signs of tax law violations, etc., the tax departments are allowed to deduct the corresponding amount from their approved annual inspection plan when evaluating the results of their annual inspection work.
Therefore, based on the guidelines for planning inspections and audits in 2017, the General Department of Taxation requests the Head of the Inspection Department of the General Department of Taxation, the Director of the Tax Department, and the Head of the Tax Sub-department of provinces and cities to implement the plan ensuring both timeliness and quality.
