On July 9, 2021, the Vietnam Social Security and the General Department of Taxation (Ministry of Finance) held a signing ceremony for the Regulations on Data Sharing and Cooperation between the two sectors. These regulations aim to facilitate the management of social insurance (BHXH), health insurance (BHYT) contributions, and tax administration.
To effectively implement the Regulations, speaking at the signing ceremony, the Director General of Vietnam Social Security, Nguyen The Manh, stated that in the coming time, Vietnam Social Security and the General Department of Taxation will resolutely direct the Social Security agencies and Tax Departments of localities to develop a coordination program to ensure the effective implementation of the contents of the Regulations; continue to build and develop information technology infrastructure, ensuring smooth data sharing and promptly resolving any incidents; and assign specific responsibilities to individuals, professional units, and each official in implementing the Regulations, considering this as a performance indicator and target for each sector.
Previously, on December 31, 2014, the Vietnam Social Security and the General Department of Taxation signed Coordination Regulation No. 5423/QCPH-BHXH-TCT (hereinafter referred to as Regulation No. 5423) to exchange information on: organizations and individuals paying income; coordination work and inspection and audit results between the two agencies.
After more than 5 years of implementing Regulation No. 5423, the number of organizations paying income that the Tax authorities provide to the Social Insurance agency is approximately 550 units/year, with the number of workers fluctuating between 18-20 million people/year.
Based on data provided by the Tax Authority, the Social Insurance agency has reviewed and identified the number of businesses that have not participated or have not fully participated in social insurance, health insurance, and unemployment insurance for their employees; thereby, they have been able to recruit and develop more participants. The specific statistics are as follows: over 115.000 units registered to participate; over 2,6 million employees registered to participate; over 214 billion VND in back taxes for social insurance, health insurance, and unemployment insurance; and over 3.600 billion VND in outstanding social insurance, health insurance, and unemployment insurance contributions paid by employers.
However, during the implementation of Regulation No. 5423, some difficulties and obstacles still exist due to differences in management such as: the basis for calculating social insurance and personal income tax; the time frame for employers to declare social insurance and personal income tax; the time frame for submitting documents, and the operational procedures of both parties, etc.
To address the shortcomings and obstacles arising during the implementation of Regulation No. 5423, and to promote more effective coordination between the two sectors, the new Regulation on Data Sharing and Coordination between Vietnam Social Security and the General Department of Taxation, signed on July 9th, will replace Regulation No. 5423. The new regulation has been further refined in content, ensuring compliance with Resolution No. 28/NQ-TW on social insurance policy reform, the Social Insurance Law, and the Tax Administration Law, aiming to ensure that all employees in each unit and enterprise fully participate in social insurance, health insurance, and unemployment insurance policies.
The regulations comprise 3 chapters and 12 articles, stipulating the principles, content of coordination, data sharing, and responsibilities for implementation between the two sectors. The regulations clearly define the data to be shared between the two agencies.
+ Data shared by the Tax Authority includes: Tax registration information of taxpayers; personal information within the income-paying organization; information recording the deduction and withholding of social insurance and health insurance contributions at the income-paying organization through inspections and audits.
+ Data shared by the Social Insurance agency includes: Information on income-paying organizations participating in social insurance and health insurance; personal information within income-paying organizations participating in social insurance and health insurance; and information on social insurance and health insurance contributions of income-paying organizations as revealed through inspections and audits.
In particular, compared to Regulation No. 5423, this new regulation has added several positive new points such as: supplementing the legal basis according to the provisions of the law; establishing regulations on coordination in inspection and auditing work; regulating the method of data sharing; and regulating the reconciliation, correction, and handling of information technology system incidents.
KEY BUSINESS POINTS TO PAY ATTENTION TO
1. Content exchanged between the Tax Authority and the Social Security Administration
Information provided by the Social Security agency includes:
- Number of income-paying organizations participating in social insurance, number of employees participating in social insurance;
- Amount of social insurance contributions;
- Amount of social insurance debt;
- Organizations that pay income owed to social insurance;
- Further information as requested by the Tax authorities.
Information provided by the Tax authorities includes:
- Information about the income-paying organization: Business registration information, business license information, tax registration information; the operational status of the income-paying organization; newly established, dissolved, bankrupt, revoked business registration certificate, ceased operations, temporarily suspended operations, abandoned business address.
- The number of employees in the organization that pays the income.
- Mandatory social insurance contributions that the income-paying organization includes as expenses for tax purposes.
- "List of employees in the organization that pays income."
2. New features of the regulations on data sharing and coordination between Vietnam Social Security and the General Department of Taxation.
- During inspection and audit activities, the two agencies will share information on inspection and audit results. If necessary, the two agencies will cooperate to conduct thematic inspections of organizations paying income.
- Regarding the method of data sharing between the two connected sectors, data will be shared through intermediary systems that are compatible with Vietnam's e-Government architecture framework. Data must be digitally signed before being sent.
- Regarding reconciliation, correction, and troubleshooting of information technology systems: In cases where taxpayer information is still inconsistent, the Social Insurance agency will send the erroneous data to the Tax authority to notify the taxpayer to correct the information in accordance with the law on tax administration.