Tax administration law forms the fundamental basis for the application of tax calculation in all other tax laws; therefore, mastering these definitions is very useful in understanding the Vietnamese tax system. The following article helps taxpayers understand the general foundation of tax administration.
What is tax administration?
To understand tax administration law, it is first necessary to understand the definitions of terms (terms) in tax administration. These are also important definitions of taxes in Vietnam that one needs to know.
What areas does the Tax Administration Law regulate?
The Law on Tax Administration governs 11 areas encompassing all activities related to the state's tax administration of taxpayers, including:
- Tax registration, tax filing, tax payment, tax assessment.
- Tax refunds, tax exemptions, tax reductions, no tax collection.
- Tax debt write-off; tax debt, late payment penalties, and fines waived; late payment penalties and fines waived; no late payment penalties charged; tax payment extension; installment payment of tax debt.
- Managing taxpayer information.
- Manage invoices and documents.
- Conduct tax audits, tax inspections, and implement measures to prevent and deter violations of tax laws.
- Enforcement of administrative decisions regarding tax management.
- Imposing administrative penalties for violations related to tax management.
- Resolving complaints and denunciations regarding taxes.
- International cooperation on taxation.
- Promoting and supporting taxpayers.
How to apply tax administration law
Tax It is a mandatory payment to the state budget by organizations, households, business households, and individuals as stipulated by tax laws.
Taxpayer's headquarters This refers to the location where a taxpayer conducts part or all of their business activities, including the head office, branches, stores, production facilities, warehouses, and locations where assets used for production and business are stored; the place of residence; or the place where the tax liability arises.
Tax code It is a sequence of 10 or 13 digits plus other characters issued by the tax authority to taxpayers for tax management purposes.
Tax period This is the period of time used to determine the amount of tax payable to the state budget according to tax laws.
Tax return This is a document in a format prescribed by the Minister of Finance, used by taxpayers to declare information in order to determine the amount of tax payable.
Customs declaration This is a document in a format prescribed by the Minister of Finance, used as a tax declaration form for exported and imported goods.
Tax records These include tax registration documents, tax declarations, tax refunds, tax exemptions, tax reductions, waivers of late payment penalties, exemption from late payment penalties, tax payment extensions, installment payments of tax arrears, and non-collection of taxes; customs documents; documents for freezing tax arrears; and documents for writing off tax debts, late payment penalties, and fines.
Filing tax returns This involves determining the amount of tax payable for the tax year, or the period from the beginning of the tax year until the cessation of the activity that gives rise to the tax liability, or the period from the commencement to the cessation of the activity that gives rise to the tax liability, as stipulated by law.
Tax year It is determined according to the calendar year from January 1st to December 31st; if the fiscal year differs from the calendar year, the tax year applies.
Fulfill your tax obligations. This involves paying the full amount of taxes due, late payment penalties, fines for violations of tax laws, and other revenues belonging to the state budget.
Enforcement of administrative decisions regarding tax management. It is the application of measures prescribed by this Law and other relevant laws to compel taxpayers to fulfill their tax obligations.
Tax risks This is the risk of taxpayers failing to comply with the law, leading to a loss of state revenue.
Risk management in tax administration It involves the systematic application of legal regulations and operational procedures to identify, assess, and classify risks that may negatively impact the efficiency and effectiveness of tax administration, serving as a basis for tax authorities to allocate resources rationally and apply effective management measures.
Tax arrears These are taxes and other revenues belonging to the state budget, collected by tax authorities, that taxpayers have not paid to the state budget by the prescribed deadline.
Taxpayer information This refers to information about taxpayers and information related to their tax obligations, provided by the taxpayers or collected by tax authorities during the tax administration process.
Tax management information system This includes statistical information systems, tax accounting, and other information serving tax administration.
Tax management obligations that taxpayers need to fulfill.
1. Register for tax purposes and use a tax identification number in accordance with the law.
2. Declare taxes accurately, truthfully, and completely, and submit tax returns on time; be legally responsible for the accuracy, truthfulness, and completeness of tax returns.
3. Pay all taxes, late payment penalties, and fines in full, on time, and at the correct location.
4. Comply with accounting, statistical, and management regulations, and use invoices and supporting documents as prescribed by law.
5. Accurately, truthfully, and completely record all activities that give rise to tax obligations, tax deductions, and transactions that require tax declaration.
6. Prepare and issue invoices and documents to buyers in accordance with the quantity, type, and actual payment value when selling goods or providing services, as stipulated by law.
7. Provide accurate, complete, and timely information and documents related to determining tax obligations, including information on investment value; account numbers and transaction details of accounts opened at commercial banks and other credit institutions; and explain tax calculation, tax declaration, and tax payment as requested by the tax authorities.
8. Comply with decisions, notices, and requests from tax authorities and tax officials in accordance with the law.
9. Be responsible for fulfilling tax obligations as prescribed by law in cases where the legal representative or authorized representative, acting on behalf of the taxpayer, performs tax procedures incorrectly.
10. Taxpayers conducting business in areas with information technology infrastructure must declare, pay taxes, and conduct transactions with tax authorities through electronic means as prescribed by law.
11. Based on the actual situation and the availability of information technology, the Government shall specify in detail the circumstances under which taxpayers are not required to submit documents in tax declaration and payment files, tax refund files, and other tax files that are already available to state management agencies.
12. Develop, manage, and operate the technical infrastructure system to ensure the implementation of electronic transactions with tax authorities, and apply information connectivity related to fulfilling tax obligations with tax authorities.
13. Taxpayers with related-party transactions are obligated to prepare, store, declare, and provide records of information about the taxpayer and its related parties, including information about related parties residing in countries and territories outside Vietnam, as prescribed by the Government.