Amendment of the Law on Tax Administration: Promptly supplement regulations on related-party transaction

VCN  -  Prevention of price fraud is always a challenge for the management agencies to prevent losses for the state budget as well as ensuring a fair and transparent business environment. Therefore, in the draft Law on Tax Administration (amended), the content related to this issue has been drafted closely to ensure the stability of the legal system.
amendment of the law on tax administration promptly supplement regulations on related party transaction Amendment of the Law on Tax Administration: Towards the inspection and examination by electronic means
amendment of the law on tax administration promptly supplement regulations on related party transaction Amending Law on Tax Administration: increase power for tax agents
amendment of the law on tax administration promptly supplement regulations on related party transaction Amendment of the Law on Tax Administration: Decentralization of authority on debt cancellation
amendment of the law on tax administration promptly supplement regulations on related party transaction
Mr. Nguyen Van Toan, Vice Chairman of the Vietnam's Association of Foreign Invested Enterprises (VAFIE) has some comments around this issue.

Recently, the National Assembly has discussed and commented on the Law on Tax Administration (amended). Through the presentation of the Ministry of Finance as well as discussion at the conference, how do you assess the content of this draft law?

Through the contents of Law on tax administration is submitted to the National Assembly by the Government I can say that this draft is detailed, richful and transparent. The draft Law on Tax Administration (amended) has been edited a lot comparing with the old one. According to experts’ assessments, 90% of the old law on tax administration has been modified from the word and the meaning of the subtitles by referenced suitable international practices.

In the draft Law on Tax Administration (amended) regulated specified privileges and the tasks of all the partners, including tax payers and the tax administrative agency and other administrative mechanism agencies. This is a very new and good thing, because at the previous time, lawmakers usually focus on the responsibilities of taxpayers while the related regulatory authorities have less responsibilities .

In addition, with the development of the Industrial Revolution 4.0 and the boomed development of e-commerce, there were many types and new business items that the Law on Tax Administration did not cover previously led to tax losses. The draft law is broader, with some very positive improvements in tax collection modernization with e-commerce.

It’s remarkable that, at the draft, problem of price fraud (the related-party transaction) - is the challenge of the tax sector, in the past times, the legal regulations are relatively clear and transparent. In the context of Vietnam's deepening integration into the global economy, cross-border and related-party transaction will become more and more widespread. The inadequate recognition of these transactions will create challenges and barriers for transnational investors when they decide to invest in Vietnam. Therefore, the provisions on this issue in the Draft Tax Administration Law (Amendment) are quite timely.

It’s clear that price fraud is a "hot" problem in current time. Could you explain more detailed about the rules in the the draft Law on Tax Administration (Amendment) related to the price fraud?

In the draft Law on Tax Administration (amended), it‘s supplemented a number of rules, of which the essence rules the format. It is applied in tax management for taxpayers with the arising transaction. This analyzes business activities of taxpayers to define the essence of transaction by comparing similar transactions, ensuring transactions demonstrate the essence of trade, economy, arising finance. It agreed that management of price fraud is applied for both domestic and FDI enterprises in the draft Law on Tax Administration.

In my opinion, this is very important, because there is a related-party transaction, if its essence is wrong, it is actually applied the appropriate sanctions. If it is in the same form, but the essence is not wrong, it is not a violation of law. So how to distinguish between those transactions which is price fraud? All related-party transaction must be controlled, analyzed and post-controlled. Through their statistics, reports, if we find the price fraud, it must be punished. If we want to find out the results, we have enough capacity to get comparative data, comparative tools. The information technology, large data warehouses, and the level of executives must be ensured. These issues are mentioned in the draft tax law and I think that these are very necessary issues.

Thus, the legal provisions were quite adequate. So, when the revised Tax Administration Act comes into effect, what should the regulator do to make the policy effective?

Promoting effectiveness, the most important thing is the way to implement the law. Firstly, it is necessary to improve the capacity, qualifications and ethics of civil servants to implement, control tax collection as well as sanctions. Secondly, the legal documents must be transparent, easy for enterprises to implement. When decrees and implementing circulars are drafted, it is necessary to discuss carefully and collect opinions of business community and especially local tax authorities. At the same time, we should reduce the administrative procedures and strict regulations on the management, inspection and control of enterprises to avoid the unofficial costs.

amendment of the law on tax administration promptly supplement regulations on related party transaction The Tax sector: there are no cases related to bank information security

VCN - When the draft Law on Tax Administration (revised) is submitted to the National Assembly for ...

Regarding to price fraud, tax officials must understand very well the nature of the price fraud and related-party transaction in order to take more realistic action. In addition, the price data system needs to be updated and updated continuously, as the prices of commodities in the market are constantly changing. So it should be clearly defined what price fraud is.

What do you recommend to your company?

For businesses involved in association activities need to understand their rights and responsibilities. The draft Law on Tax Administration (Amendment) is very clear, if there are related-party transaction, they must clearly declare the transaction and price of transactions. Enterprises must clarify their responsibility and comply with the provisions of law, contribute their opinions to state agencies, create favorable conditions, create transparency and minimize negative impacts on tax evasion, taxes, or unofficial fees ...

Thank you Sir!

By Thuy Linh (recorded)/ Quynh Lan

Related News

Solving necessary and urgent issues in financial and budgetary sectors

Solving necessary and urgent issues in financial and budgetary sectors

VCN - Most of members of the Standing Committee of the National Assembly's Finance and Budgetary Committee agreed that it is necessary to study, amend and supplement laws in the financial sector in order to focus on immediately removing difficulties and institutional obstacles in the financial and budgetary sectors to improve the investment and business environment, and to attract maximum state and non-state resources to promote the country's socio-economic development.
Improve business environment to unlock potential for businesses

Improve business environment to unlock potential for businesses

VCN - According to Mr. Mac Quoc Anh, Vice Chairman and General Secretary of the Hanoi Association of Small and Medium Enterprises, despite current challenges, many resources are mobilized to optimize business results.
Trade remedies create a fair business environment

Trade remedies create a fair business environment

VCN - The investigation and application of trade defense measures have contributed to protecting and creating a fair competitive environment for domestic manufacturing industries.
Binh Duong Customs joint hand to improve business environment and attract FDI investment

Binh Duong Customs joint hand to improve business environment and attract FDI investment

VCN - With the advantage of modern, basically complete industrial park infrastructure, especially the attention, companionship, and support of agencies and departments such as Customs, Taxation, Industry and Trade..., Binh Duong has been and continues to become a priority for foreign investors.

Latest News

Hanoi Customs resolves tax policy queries for enterprises

Hanoi Customs resolves tax policy queries for enterprises

VCN - Queries regarding customs consultation procedures and tax refunds due to price reduction clauses were addressed by the Hanoi Customs Department, providing clarity for businesses.
Regularly check tax obligations to avoid temporary exit suspension

Regularly check tax obligations to avoid temporary exit suspension

VCN - In order to avoid the situation of arriving at the airport or border gate and only finding out that you owe taxes and being temporarily suspended from leaving the country by the Tax Authority, the Tax Authority recommends that taxpayers regularly look up their tax obligations to have a plan to pay taxes on time, not letting the tax debt situation drag on and drag on.
Implementing the SAFE framework in Vietnam: Assessment through the lens of international standards

Implementing the SAFE framework in Vietnam: Assessment through the lens of international standards

VCN - In June 2005, the World Customs Organization (WCO) developed and adopted the SAFE Framework of Standards to Secure and Facilitate Global Trade. The SAFE Framework plays a crucial role in encouraging countries to modernize, enhance security, and facilitate trade within global supply chain management and Authorized Economic Operator (AEO) programs. This approach introduces a comprehensive method for cross-border goods management and promotes closer cooperation between Customs, businesses, and stakeholders. The Customs News presents a two-part series on implementing the SAFE Framework in Vietnam.
Proposing the Tax Authority be flexible in applying tax debt enforcement measures simultaneously

Proposing the Tax Authority be flexible in applying tax debt enforcement measures simultaneously

VCN - In the draft revised Law on Tax Administration, the Ministry of Finance proposed amending regulations on measures to enforce administrative decisions on tax administration to remove obstacles in policy mechanism and improve the effectiveness of tax administration.

More News

Many shortcomings in process and manual book on handling administrative violations

Many shortcomings in process and manual book on handling administrative violations

VCN - Legal policies on handling administrative violations have effectively supported the technical work of the Customs sector. However, some legal bases and regulations have been amended, replaced, and supplemented, which have limited the efficiency of handling administrative violations of the customs sector.
Implementing the SAFE Framework in Vietnam: Lessons from practice

Implementing the SAFE Framework in Vietnam: Lessons from practice

VCN - The Framework of Standards to Secure and Facilitate Global Trade (SAFE Framework) is a strategic international instrument introduced by the World Customs Organization (WCO) to enhance security and trade facilitation in global supply chains. It contributes significantly to the economic development of the 21st century.
Implementing the SAFE Framework in Vietnam: Solutions and Recommendations

Implementing the SAFE Framework in Vietnam: Solutions and Recommendations

VCN - Recognizing the significance, impact, and benefits of the SAFE Framework in customs modernization and reform, Vietnam Customs is advancing the implementation of SAFE. This involves both capacity building and phased deployment aligned with Vietnam Customs’ development strategy and practical needs.
Abolishing regulations on tax exemption for small-value imported goods must comply with international practices

Abolishing regulations on tax exemption for small-value imported goods must comply with international practices

VCN - The Ministry of Finance said that the abolition of regulations on tax exemption for imported goods valued at less than VND1 million must comply with international practices in the context of the growing trend of cross-border e-commerce activities.
Policy adaptation and acceleration of digital transformation in tax and customs management

Policy adaptation and acceleration of digital transformation in tax and customs management

VCN - In order to contribute to economic growth, tax, customs and logistics management policies need to ensure high adaptability, stability and predictability so that they require little amendment or supplementation.
Implement regulations on special preferential import tariffs under VIFTA

Implement regulations on special preferential import tariffs under VIFTA

VCN - The General Department of Vietnam Customs (GDVC) requests provincial and municipal customs departments to implement Vietnam's special preferential import tariffs under the Free Trade Agreement between the Government of the Socialist Republic of Vietnam and the Government of the State of Israel for the period 2024-2027 (referred to as the VIFTA) from October 15, 2024.
Perfecting tax policy for goods traded via e-commerce

Perfecting tax policy for goods traded via e-commerce

VCN - In order to ensure the goal of developing e-commerce activities without causing loss of state budget revenue, the Customs authority is actively coordinating with policy advisory units of the Ministry of Finance to research and review regulations on tax exemption for import and export goods transacted via e-commerce.
Are belongings of foreigners on business trip to Vietnam exempt from tax?

Are belongings of foreigners on business trip to Vietnam exempt from tax?

VCN - That is the question of Nhat Viet Relocation Company Limited, which has just been answered by the Customs Department and given specific instructions on providing a confirmation of residence of foreigners on business trip to Vietnam to follow tax exemption procedures for movable assets.
Amending regulations on enforcement measures in tax administration

Amending regulations on enforcement measures in tax administration

VCN - In draft of 1 law amending 7 laws in the financial sector, the Ministry of Finance proposed to amend the regulations on enforcement measures in tax administration in the Law on Tax Administration.
Read More

Your care

Latest Most read
Hanoi Customs resolves tax policy queries for enterprises

Hanoi Customs resolves tax policy queries for enterprises

Queries regarding customs consultation procedures and tax refunds due to price reduction clauses were addressed by the Hanoi Customs Department, providing clarity for businesses.
Regularly check tax obligations to avoid temporary exit suspension

Regularly check tax obligations to avoid temporary exit suspension

Tax Authority recommends that taxpayers regularly look up their tax obligations to have a plan to pay taxes on time, not letting the tax debt situation drag on and drag on.
Implementing the SAFE framework in Vietnam: Assessment through the lens of international standards

Implementing the SAFE framework in Vietnam: Assessment through the lens of international standards

The SAFE Framework plays a crucial role in encouraging countries to modernize, enhance security, and facilitate trade within global supply chain management and Authorized Economic Operator (AEO) programs
Proposing the Tax Authority be flexible in applying tax debt enforcement measures simultaneously

Proposing the Tax Authority be flexible in applying tax debt enforcement measures simultaneously

VCN - In the draft revised Law on Tax Administration, the Ministry of Finance proposed amending regulations on measures to enforce administrative decisions on tax administration to remove obstacles in policy mechanism and improve the effectiveness of tax
Many shortcomings in process and manual book on handling administrative violations

Many shortcomings in process and manual book on handling administrative violations

VCN - Legal policies on handling administrative violations have effectively supported the technical work of the Customs sector. However, some legal bases and regulations have been amended, replaced, and supplemented, which have limited the efficiency of h
Mobile Version