In early 2023, the General Department of Taxation issued... QD-78-02022023-TCTRegarding the Criteria Index (CSTC) for evaluating and identifying taxpayers with risk indicators in invoice management and usage.
The Criteria Index (CSTC) helps tax authorities analyze information and accurately identify taxpayers with risk indicators in invoice management and usage. It also serves as a basis for tax authorities to review and inspect the actual compliance with legal regulations at businesses.
1. Criteria for assessing invoice risks
The CSTC (Civil Service and Traffic Safety Committee) comprises three groups, each corresponding to a separate approach to handling violations.
Group I: Criteria for identifying taxpayers switching from using electronic invoices without a tax authority code to using electronic invoices with a tax authority code.
If a business exhibits any of the 10 risk indicators listed below, it must switch from using invoices without a tax authority code to using invoices with a tax authority code.
| STT | Criteria | Criterion index |
| 1 | Criterion 1. General information about the business | 1. Businesses with equity capital under VND 15 billion and without legal ownership or right to use (in accordance with registered business activities) one of the following facilities: factory; production workshop; warehouse; transportation vehicles; store and other facilities based on tax return verification at the tax authority's office. |
| 2 | Criterion 2. Information of the business owner and legal representative of the business. | 2. Businesses that change their legal representative and relocate their business premises will have their tax authority changed. |
| 3. The legal representative of the enterprise is prosecuted for tax evasion and for illegally trading invoices and documents related to the collection of state budget revenue. | ||
| 4. The legal representative of the business is also the legal representative of the business that has notified the authorities that it is not operating at the registered address. | ||
| 5. Businesses that have received notification from the tax authorities or competent state management agencies that the taxpayer is not operating at the registered address, and have subsequently had their tax identification number restored, are allowed to resume operations. | ||
| 6. Businesses that temporarily suspend operations or submit a written request to terminate their tax identification number, then resume operations or request the reinstatement of their tax identification number but change their legal representative or registered business address, resulting in a change of the tax authority responsible for their management. | ||
| 3 | Criterion 3. Tax declaration and payment status | 7. Businesses that fail to submit tax returns within 30 days of the deadline for filing tax returns. |
| 8. Businesses with equity capital under VND 15 billion and declared revenue from the sale of goods and services in the preceding year (excluding export revenue) exceeding VND 10 billion, and with a ratio of "VAT payable/Revenue from the sale of goods and services" in the period (excluding export revenue) less than 1%. | ||
| 4 | Criterion 4. The business has suspicious related-party transactions. | 9. Businesses whose revenue from the sale of goods and services to related businesses accounts for more than 50% of their total revenue from the sale of goods and services. |
| 10. Businesses with suspicious transactions according to the warning list provided by the State Bank of Vietnam to the General Department of Taxation. |
Group II: Criteria for identifying taxpayers with risk indicators requiring inspection of invoice management and usage.
This group will identify risky businesses based on their total risk score and the number of risky invoices. Based on the total risk score and the number of high-risk invoices, they will determine the percentage of businesses at risk that require a review and inspection of their invoice management and usage practices.
| STT | Criteria | Criterion index | Weight | Scores | |
| 1 | Criterion 1. General information about the business | 1. As of the time of assessment, the company has a low "Fixed Assets/Equity" ratio. | 1 | 1 to 100 | |
| 2. Businesses that change their legal representative or relocate their business premises, resulting in a change of the tax authority responsible for their tax administration. | 1 | 50 | |||
| 2 | Criterion 2. The company's VAT declaration status. | 3. Businesses have a ratio of "Total revenue from sales of goods and services as shown on invoices / Total revenue from goods and services sold". | 1 | 1 to 100 | |
| 4. In the 12 consecutive months preceding the assessment date, or from the date of establishment to the assessment date for businesses established less than 12 months ago, the business has had multiple periods of delayed tax filing. | Low risk | 1 | 10 | ||
| Medium risk level | 20 | ||||
| High risk level | 50 | ||||
| The risk level is very high. | 80 | ||||
| 3 | Criterion 3. Revenue from the sale of goods and provision of services | 5. Businesses with a high ratio of "Revenue from sales of goods and services in this period / Revenue from sales of goods and services in the immediately preceding period". | 1 | 1 to 100 | |
| 6. Businesses that have been established for many years without generating revenue are then sold or transferred to others. | 1 | 60 | |||
| 4 | Criterion 4. Compliance with tax obligations to the state budget. | 7. Businesses with a low ratio of "Total VAT payable / Total revenue from sales of goods and services this period". | 1 | 1 to 100 | |
| 5 | Criterion 5. The company's invoice usage situation. | 8. Businesses with a high ratio of "Total number of e-invoices used in this period / Total number of e-invoices used in the immediately preceding period". | 1 | 1 to 100 | |
| 9. Businesses with a high ratio of "Number of electronic invoices with adjustment or replacement notices / Total number of electronic invoices used during the period". | 1 | 1 to 100 | |||
| 10. Businesses with a high ratio of "Total number of canceled e-invoices/Total number of e-invoices used during the period". | 1 | 1 to 100 | |||
| 6 | Criterion 6. Level of administrative tax violations | 11. During the one (01) year leading up to the assessment time, the enterprise was repeatedly issued administrative penalty decisions by the tax authority regarding tax and invoice violations. | Low risk | 1 | 10 |
| Medium risk level | 20 | ||||
| High risk level | 50 | ||||
| The risk level is very high. | 80 | ||||
| 12. During the one (01) year leading up to the assessment time, the enterprise was issued a Decision on administrative penalties for tax and invoice violations by the tax authority with the following penalty amounts: | Less than 50 million | 1 | 10 | ||
| From 50 million to under 100 million VND | 30 | ||||
| From 100 million to under 200 million VND | 80 | ||||
Group III: Reference criteria for identifying taxpayers with risk indicators requiring inspection of invoice management and usage.
Grouping criteria. The business's operational status; information of the business owner and legal representative; fluctuations in revenue from goods and services sold; and compliance with tax obligations to the state budget.
1. Businesses that temporarily suspend operations or submit a written request to terminate their tax identification number, then resume operations or request the reinstatement of their tax identification number but change their legal representative or registered business address, resulting in a change of the tax authority responsible for their management.
2. Businesses that simultaneously have small equity capital, a short business establishment period, frequently change business addresses, whose legal representative was previously the legal representative of a business that has abandoned its business address or dissolved/gone bankrupt, and have experienced a sudden surge in revenue compared to the previous period.
3. Businesses that simultaneously have small equity capital, a short business establishment period, frequently change business addresses, use a large number of invoices, and have a low ratio of "VAT and corporate income tax payable/Revenue from sales of goods and services in the period".
4. The business simultaneously has small equity capital; revenue from the sale of goods and services has increased dramatically compared to the previous period; the ratio of "VAT and corporate income tax payable/Revenue from the sale of goods and services during the period" is low; and a large number of invoices are used.
5. Businesses that have significant revenue or a decrease in revenue compared to the previous year, and whose operating profit is greater than 0 (or whose operating profit is less than 0 but the "profit/net revenue" ratio is low), and register to change their business status to temporary suspension.
6. Other risk assessment criteria as prescribed by the General Department of Taxation.
If a business violates any of the CSTC reference criteria, the process will shift to reviewing and inspecting its invoice management and usage.
2. Process for assessing and classifying the risk level of invoices
Based on the risk analysis results and risk thresholds, a list of taxpayers with high risk indicators is compiled. The head of the tax authority or the authorized head of the Risk Management department approves the list and forwards it to the Inspection and Audit department directly managing the taxpayer for the purpose of managing and using invoices.
By the 28th of each month, the Risk Management Department will forward the approved list of high-risk taxpayers to the Inspection Department for review and on-site inspection of invoice management and usage. Specifically, this is as follows:
- For taxpayers on the list of high-risk taxpayers according to Group I tax regulations, the tax authorities conduct a review to verify whether taxpayers are at risk of switching from using electronic invoices without codes to electronic invoices with codes issued by the tax authorities.
- For taxpayers on the list with high risk indicators according to the risk classification results at CSTC Group II and III, the tax authorities will use this information to conduct inspections for violations of invoice laws.
3. Processing the results of the analysis of taxpayers with suspected invoice risks.
The process of evaluating and analyzing information and classifying risk levels is carried out by the Tax Authority according to Decision 575/QD-TCT. Periodically, on the 25th of each month, the Tax Authority will conduct analysis and evaluation using an automated assessment method based on risk management information updated on the Risk Management application.
In addition, the General Department of Taxation will issue risk thresholds in conjunction with the Ministry of Finance. QD-78-02022023-TCT This serves as a basis for classifying taxpayers with invoice-related risks into three categories: high risk, medium risk, and low risk. Additionally, supplementary criteria such as the number of overdue tax filings, the number of tax and invoice-related penalties, the number of changes in business address, and the ratio of VAT paid to total revenue will be applied to classify the level of invoice-related risk for taxpayers.
Check the list of high-risk businesses regarding invoices in 2023.
On May 16, 2023, the General Department of Taxation issued Official Letter 1798/TCT-TTKT of 2023 regarding the review and handling of illegal invoices. In Appendix 1 attached to the above letter, the General Department of Taxation published a list of 524 businesses with high risks regarding invoice management and simultaneously requested the Tax Sub-departments to focus on reviewing the sales invoices issued by these 524 businesses.
Here's how to look up businesses among the 524 high-risk or invoice-violating companies in the General Department of Taxation's system:
- Step 1: Access website http://tracuuhoadon.gdt.gov.vn
- Step 2: Select List of high-risk, violating businesses => Search for high-risk, violating businesses
- Step 3: Enter the Tax Authority information and verification code => Search.