1. Determining Taxable Revenue

Issues:

• Failure to distinguish between taxable and non-taxable revenue
• Unable to determine the time of taxable revenue for different types of business activities
• Unable to determine the exact amount of taxable revenue, including deductions for discounts, rebates, VAT, and other taxes and fees as prescribed
• Failure to issue or incorrectly issue invoices in accordance with regulations for revenue generated from business activities
• Failure to keep up with CIT taxable revenue regulations

Solutions:

• Equip accounting and tax staff with full knowledge of the CIT Law, Decree guiding the implementation of the CIT Law, and related guiding documents
• Build and implement an effective tax management system, including invoicing and document procedures, taxable revenue determination procedures, and declaration and tax payment procedures
• Use reputable accounting and tax software to support taxable revenue determination and tax declaration
• Consult tax experts when facing difficulties in determining taxable revenue or when having other tax issues

2. Determining Reasonable Expenses

Issues:

• The concept of reasonable expenses is not clearly defined
• Difficulty in determining the reasonableness of each expense in business activities
• Failure to distinguish between reasonable and unreasonable expenses
• Difficulty in applying changing reasonable expense regulations over time

Solutions:

• Equip accounting and tax staff with full knowledge of the CIT Law, Decree guiding the implementation of the CIT Law, Circular guiding reasonable expenses, and related guiding documents
• Build and implement an effective cost management system, including document preparation procedures, cost approval procedures, and cost control procedures
• Keep full records of all expenses incurred in business activities, including invoices, payment documents, contracts, minutes, accounting books, and other related documents
• Consult tax experts when facing difficulties in determining reasonable expenses or when having other tax issues

3. Timely Declaration and Tax Payment

Issues:

• Lack of adequate knowledge of tax laws, leading to a lack of understanding of tax declaration and payment deadlines
• Ineffective tax management system, leading to incomplete and inaccurate monitoring and updating of tax regulations
• Manual tax declaration and payment, resulting in time-consuming, costly, and error-prone processes
• Financial difficulties, leading to the inability to pay taxes on time
• Cumbersome and complex administrative procedures related to tax declaration and payment, resulting in time-consuming and affecting the progress of tax declaration and payment

Solutions:

• Equip accounting and tax staff with full knowledge of tax laws, including the CIT Law, Decree guiding the implementation of the CIT Law, Circular guiding tax declaration and payment, and related guiding documents
• Build and implement an effective tax management system, including invoicing and document procedures, tax regulation monitoring and updating procedures, and tax declaration and payment procedures
• Implement electronic tax declaration and payment to save time, costs, and reduce errors
• Develop a reasonable financial plan to ensure sufficient resources for timely tax payments
• Propose to the tax authority to simplify the administrative procedures related to tax declaration and payment to facilitate businesses in fulfilling their tax obligations

4. Tax Audits

Issues:

• Some tax audit regulations are not specific and clear, leading to inconsistent application and potential disputes between tax authorities and businesses
• Some tax auditors are not well-trained and lack practical experience, leading to ineffective tax audits and the failure to detect all tax violations
• Poor coordination between tax authorities and other agencies such as police, customs, and market management, making it difficult to verify information, trace the origin of goods, and handle tax violations
• Some businesses lack tax compliance awareness and intentionally evade or defraud taxes, making tax audits difficult
• The tax audit process has many steps and stages, which are time-consuming and costly, and cause inconvenience to businesses

Solutions:

• Improve the legal framework for tax audits, issue specific, clear, and consistent regulations to ensure strict and effective law enforcement
• Regularly organize training and refresher courses for tax auditors on tax law knowledge, tax audit skills, and practical experience to improve the capacity and expertise of the tax audit team
• Strengthen coordination between tax authorities and other agencies such as police, customs, and market management to share information, support each other in tax audits, and handle tax violations
• Step up tax law propaganda and education to raise tax compliance awareness of businesses. At the same time, strict measures should be taken to handle violations of tax laws to deter and educate
• Simplify administrative tax inspection procedures, reduce unnecessary steps and processes to save time and costs for businesses