Tax Risk Management: Selecting Dossiers for Inspection

What does Decision 98/QD-TCT of 2024 on the risk management process for selecting tax declaration dossiers provide?

On 26/01/2024, the General Director of the General Department of Taxation issued Decision 98/QD-TCT on the Process for applying risk management in selecting tax declaration dossiers (HSKT) for value-added tax (VAT), corporate income tax (CIT), and special consumption tax (SCT) for inspection at the tax authority’s office. This Process guides tax authorities in collecting, analyzing, and assessing information to select tax declaration dossiers with risk indicators for inspection at the tax authority’s office, ensuring uniformity, objectivity, and improving the effectiveness of detecting and handling false declarations and tax evasion.

Steps in the risk management process

Under Articles 4 to 8 of the Process issued with Decision 98/QD-TCT, the process consists of 5 steps:

1. Collecting and processing information;
2. Developing and using the Set of criteria indicators for selecting VAT, CIT, and SCT tax declaration dossiers with risk indicators for inspection at the tax authority’s office;
3. Assessing, classifying, and handling the results of classifying the risk levels of tax declaration dossiers;
4. Handling the list of taxpayers with high-risk tax declaration dossiers for inspection at the tax authority’s office;
5. Assessing the application of risk management in selecting VAT, CIT, and SCT tax declaration dossiers for inspection at the tax authority’s office.

The Process applies to tax authorities at all levels in the organizational system at the time of issuance (General Department of Taxation, Tax Departments, Tax Sub-departments).

How is the list of taxpayers with high-risk tax declaration dossiers handled?

Under Article 7 of the Process:

• After reviewing and excluding risks with clear causes or already explained in previous periods, the Tax Inspection Division submits to the tax authority’s leadership for approval the list of taxpayers with high-risk tax declaration dossiers requiring inspection at the tax authority’s office;
• The Tax Inspection Division transfers to the risk management division the entry of reasons for adding or excluding high-risk tax declaration dossiers into the risk management application under form No. 02-KTTB/QTr-QLRR, no later than the 5th of the following month;
• The risk management application automatically updates the List of taxpayers with high-risk tax declaration dossiers under form No. 03-KTTB/QTr-QLRR;
• The tax authority’s leadership (which may authorize the head of the risk management division) approves on the application to transfer to the tax inspection support system; the Tax Inspection Division inspects tax declaration dossiers at the tax authority’s office under the current Tax Inspection Process.

How are taxpayer risk levels classified?

Taxpayers’ tax declaration dossiers are assessed and classified by risk levels: high risk, medium risk, and low risk, as the basis for tax authorities to select dossiers for inspection at the tax authority’s office under the Process.

What should taxpayers note?

• Declare fully, accurately, and truthfully the items on VAT, CIT, and SCT tax declaration dossiers;
• When risk indicators are raised by the tax authority, proactively explain and provide dossiers and documents as evidence;
• Monitor and preserve tax declaration dossiers and accounting vouchers to serve inspections at the tax authority’s office when requested.

Notes on Applying Current Legal Regulations

This article belongs to the Corporate & M&A Knowledge series and is presented for reference purposes, helping readers understand the legal issue at an overview level before preparing dossiers or carrying out transactions.

Legal regulations may change over time, by locality, dossier type, and specific circumstances. If you need to determine the exact legal basis applicable to your dossier, please contact an ANT Legal lawyer at 0966.475.966 for verification and advice before proceeding.

Common Risks to Watch Out For

• Declaring incorrect or missing items, causing the dossier to be assessed as high risk.
• Failing to explain in a timely manner when the tax authority requests clarification of risk indicators.
• Preparing insufficient dossiers, documents, or evidence when inspected at the tax authority’s office.
• Signing, filing, or carrying out transactions without fully assessing legal risks.

How Can ANT Legal Help?

ANT Legal helps review your specific situation, check dossiers, determine the applicable legal basis, advise on handling plans, and represent clients in dealings with individuals, organizations, or competent authorities when necessary.

For quick advice, please contact our lawyers at 0966.475.966.

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