Businesses with significant revenue potential or high risks related to value-added tax refunds and invoice fraud are key targets for the Ministry of Finance's inspection and audit plan in 2023.
Recently, the Ministry of Finance issued Official Letter No. 10039/BTC-TTr on the orientation and guidance for developing the 2023 financial inspection and audit plan for specialized inspection units under the Ministry of Finance, especially tax authorities. Accordingly, the inspection and audit plan must be focused, targeted, and aligned with the direction and guidance, avoiding a scattered approach; and inspection and audit teams must be organized rationally and effectively.
1. Businesses subject to tax audits
1.1. Businesses with large tax refunds
The Ministry of Finance has requested the General Department of Taxation to strengthen strict management of value-added tax refunds, minimizing policy abuse that leads to losses in the state budget. Information technology and artificial intelligence (AI) should be applied to cross-checking, verifying, and managing the use of invoices…
1.2. Businesses in high-risk industries
Businesses in high-risk sectors such as oil and gas; petroleum; electricity; telecommunications; banking; securities; insurance; financial leasing; real estate; pharmaceuticals; infrastructure; industrial parks; lottery companies; port services; construction; production and trading of construction materials; businesses exploiting and trading river sand and gravel; gold mining;… are among the businesses that the tax authorities are intensifying inspections of, as directed by the Ministry of Finance.
1.3. Businesses with high invoice risk, showing signs of using illegal invoices.
Businesses receive risk information from customs authorities and are entitled to tax exemptions and reductions under tax laws and agreements.
1.4. Businesses with significant tax revenue and related-party transactions.
Corporations, conglomerates, and companies with large tax revenues, or large-scale businesses that have not been inspected or audited for many years, are also subjects that need attention for inspection.
In addition, inspection and auditing of businesses in operation are also carried out. related party transactionsTransfer pricing; businesses involved in capital transfers, brand transfers, project transfers, splits, and mergers; and businesses with consecutive years of operating losses are also given special attention by the entire tax sector.
In the document, the Ministry of Finance clearly stated: "Tax inspection and auditing, handling of tax arrears, ensuring the correct, complete, and timely collection of taxes, fees, charges, and other revenues into the state budget."
2. Regarding internal audits within the tax sector.
Regarding internal inspection work within the tax sector, the Ministry of Finance specifically instructed units to focus on inspecting compliance with legal regulations on tax inspection and audit by tax authorities; inspecting compliance with legal regulations on value-added tax refunds; inspecting debt management and tax debt enforcement; and inspecting the issuance, sale, and use of invoices. The goal is to prevent corruption that leads to losses of state budget funds.
Clearly state the focus of the inspection on the integrity of tax officials in combating tax evasion in the management and use of state assets and funds; inspect the implementation of the Law on Practicing Thrift and Combating Waste; the Law on Prevention and Combat of Corruption; and inspect the control of asset and income declarations and the handling of complaints and denunciations.
The Ministry of Finance has identified a high risk of fraud in value-added tax (VAT) refund procedures. In the first nine months of 2022, tax authorities nationwide rejected VAT refunds totaling VND 1.870 billion, representing 1,7% of the total requested refunds; in addition, they recovered and imposed penalties exceeding VND 414 billion. Regarding related-party transactions, after audits and reassessment of market prices, the Ministry of Finance recovered VND 406 billion and reduced reported losses by VND 13.903 billion.
By the end of September, the entire tax sector had conducted 47.373 inspections and audits, achieving 64,1% of the plan, an increase of 6,6% compared to the same period last year; and examined over 500.878 tax declarations at tax offices, reaching 88,3% compared to the same period last year. While the total number of inspections and audits increased slightly, the total amount of money recommended for processing increased by 32%, a significant increase compared to the same period last year, reaching VND 42.917 billion. Of this amount, VND 9.852 billion was collected through inspections and audits; VND 1.468 billion was reduced in deductions; and VND 31.597 billion was reduced in losses.