“Loopholes” in PIT Refunds and “Sophisticated Tricks”

While the automated personal income tax (PIT) refund process has facilitated taxpayers, it has also led to businesses exploiting “loopholes” for fraudulent purposes.

Many businesses use personal information (name, tax identification number, citizen identification number) to declare and calculate salary and wage expenses when determining corporate income tax obligations, even though no actual income payments occur.

“Bottlenecks” from Convenience

The General Department of Taxation has upgraded the eTax Mobile and iCanhan applications to allow individuals to report incorrect or falsely declared income.

However, the handling of these cases still faces many shortcomings, affecting individuals’ PIT finalization obligations.

What Solutions for Taxpayers?

To address this situation, the General Department of Taxation needs to:

• Strengthen Inspection and Supervision: Inspect, verify information, and take strict action against violating businesses.
• Strictly Handle Violations: Based on the nature and severity of violations, handle cases according to Decree 125/2020/ND-CP or transfer files to competent authorities for handling under the Criminal Code.
• Raise Taxpayer Awareness: Publicize and raise taxpayer awareness about protecting personal information and promptly reporting detected violations.

Automated PIT Refund Process:

The General Department of Taxation has issued a Decision stipulating the order and procedures for tax authorities to process automated PIT refund applications.

The process includes the following steps:

1. Receiving the PIT Finalization Declaration with a refund request from the taxpayer.
2. The taxpayer checks the information on the suggested PIT Finalization Declaration.
3. The taxpayer confirms and submits the finalization dossier if agreeing with the suggested information.
4. The taxpayer amends the information and submits the finalization dossier with supporting documents if disagreeing.
5. The tax authority reviews and processes the PIT refund dossier.

Conditions for Automated Tax Refund:

Automated PIT refund dossiers must meet the following conditions:

1. The dossier has the PIT amount fully paid to the State Treasury.
2. The dossier’s entries match the aggregated data in the tax management database.
3. The taxpayer’s refund account information is verified and linked to the tax sector’s management database.

Handling Tax Refund Dossiers:

• Eligible dossiers for automated processing will generate a refund proposal.
• Dossiers not meeting automated processing conditions will be reviewed and processed by the processing unit within 03 working days.

Conclusion

The automated PIT refund is a correct policy, but strict control measures are needed to prevent fraud.

Strictly handling violating businesses will contribute to protecting taxpayers’ rights and enhancing the transparency of the tax system.