1. Concepts

a) Tax Audit:

Tax audit is a regular and professional activity of the tax authority aimed at:

• Assess the completeness and accuracy of information and documents in the tax records of businesses:
  • Includes tax declaration profile, accounting records, invoices, and documents related to the business operations of the business.
  • The purpose is to ensure that businesses have declared taxes fully and accurately in accordance with tax laws.
• Assess the tax compliance of businesses:
  • Tax officers will check whether the business complies with tax regulations, including:
    • Declaring taxes on time.
    • Paying taxes in full.
    • Having full and legal invoices.
    • Keeping accounting records according to regulations.
  • The purpose is to detect tax violations by businesses and handle them according to law.

b) Tax Inspection:

Tax inspection is an activity carried out according to a decision of the tax management agency to:

• Verify and collect evidence to handle tax law violations:
  • Tax inspectors will conduct a comprehensive inspection of the tax activities of the business, including tax records, accounting records, invoices, documents, etc.
  • The purpose is to find evidence of tax violations by businesses.
• Assess the overall tax compliance of businesses:
  • Tax inspections not only check the completeness and accuracy of tax records but also assess the tax compliance of businesses in all aspects.
  • The purpose is to assess the severity of the violation and take appropriate action.

 2. Tax Audit and Inspection Measures for Businesses

According to the Law on Tax Administration No. 38/2019/QH14, tax authorities implement the following tax audit and inspection measures for businesses:

Tax Audit:

• Tax audit at the tax authority’s headquarters: Applied to cases where businesses show signs of tax violations but do not meet the conditions for tax inspection.
• Tax audit at the taxpayer’s premises: Applied to cases where:
  • Businesses show signs of tax violations;
  • Businesses are at high risk of tax violations;
  • Businesses voluntarily request a tax audit at their premises.

Tax Inspection:

• Comprehensive tax inspection: Applied to businesses with high revenue and profit; complex business activities; and signs of serious tax violations.
• Thematic tax inspection: Applied to one or more specific contents of the tax obligations of businesses.

In addition, tax authorities may also implement other tax audit and inspection measures such as:

• Tax record inspection: Applied to tax returns, accounting records, and documents related to the tax obligations of businesses.
• Field inspection: Applied to inspect the business operations, production, goods, and services of businesses.
• Tax search: Applied to cases where businesses have committed tax evasion or tax fraud.

Tax Audit and Inspection Procedures:

Preparation phase:

• Issue a decision to audit and inspect taxes.
• Send the tax audit and inspection decision to the business.
• Prepare the necessary documents and materials for the tax audit and inspection.

Implementation phase:

• Conduct tax audits and inspections at the tax authority’s headquarters or at the business premises.
• Draw up a tax audit and inspection report.
• Provide the tax audit and inspection report to the business for review and comment.

Post-audit and inspection phase:

• Handle tax violations (if any).
• Notify the business of the results of the tax audit and inspection.

Note:

Responsibilities of businesses during tax audits and inspections:

• Provide full, accurate, and timely documents and materials related to the tax activities of the business.
• Explain and clarify the issues requested by the tax authority.
• Cooperate with tax officers and officials during the tax audit and inspection.

Rights of businesses during tax audits and inspections:

• Receive notification of tax audits and inspections.
• Be present and express opinions during tax audits and inspections.
• Complaints, accusations against the actions of tax officials and civil servants violating the law.