Many fraud tricks of Value Added Tax

Checking the invoices in the tax settlement records of companies in the Tax Department of Ho Chi Minh city. Photo: Nguyen Hue.

According to the understanding of the reporters, at catering business places, most input materials are purchased in the wholesale market without input invoices, so, even if they do not need to print the output invoices, they can still balance for costs. Therefore, although the tax offices are manage by requesting a declaration of norms on each food, these places can be flexible in declaring costs in favor of themselves by reducing capital expenditures. Specifically, despite the fact capital costs only account for 30% to 40% of the total value of a food, the restaurants still can prescribe up to a maximum level allowed by the Tax agency to “dodge” tax.

According to the view of NTN who has had seniority in charge of accounting for a number of restaurants and bars in district 1, HCM City, the majority of restaurants use “tricks” in payment for tax fraud, in which, the number of restaurants that “ignore” to invoice to their customers accounts for 30 to 40%. According to his view, when paying for their customers, catering business places must have bills, although these places still carried out invoicing to the customers in accordance with regulations, they printed bills less than the actual transaction value. Besides, despite there is a provision that all kinds of goods and services priced below 200,000 must still be printed common bills, this provision is rarely implemented.

For the fields of construction and construction material business, no printing invoices to be self-interested and printing blank invoices to deal with the Tax offices are the general situation of the majority of small and medium enterprises in this field. According to a leader of a construction company in District 4, the construction companies avoid pronting invoices because printing the invoice must be related to the policies and procedures for employees and employee managers leading to rising costs, cost prices, not to compete with other unit without printing invoices. According to him, the majority of small and medium enterprises assign the invoice balance to the tax reporting units, these units balance income and expenditure for inputs and outputs of the invoices themselves on condition that after balancing incomes and expenditures, revenue of the companies must always zero or loss. From time to time, in order to avoid the suspicion of the Tax offices, the companies declare to have a little profit but in fact, to make a company viable, its revenue must be necessarily profitable. If customers need to get an invoice, the construction units will contact the material dealers or supply stores to get the invoices, then the accounting departments will balance between their inputs and outputs of invoices for each month and quarter…

For the field of electronics, electrical appliances, according to information from Ms. P.T.S who has worked as a chief accountant for the supermarket PK on Hoang Van Thu Street, Tan Binh District, the biggest number of printed invoices at the electronics supermarket is only about 60-70% of the sold goods. The reason is that most of the goods in these supermarkets are taken from many sources and are not genuine, so, there are not input invoices, therefore, there are not output invoices. When customers request invoices for goods without input invoices, the accounting staff of the supermarket will change the goods codes, use an input invoice of the goods item to print an output invoice for the other item. When differences arise between the inputs and outputs, to deal with the Tax offices, the supermarkets will print blank invoices for an individual and an address X, Y and the value of that invoice is only same or below cost price in order to pay less tax. Additionally, the other trick is also applied by the supermarkets that they link together to exchange invoices back and forth among these units in order to balance the output, the input of the parties.

Besides unfair trading practices of most goods and services business places, there is a habit of not taking the bill when consumers purchase. Most individual consumers do not care and do not need to get invoices. Plus, procedures for getting invoices remain cumbersome and out of time (as defined, for the payment of 20 million or more, customers are forced to pay through the banks and to get invoices, customer being the companies are forced to carry the seals), it also makes customers hesitant, they have rarely taken back to get invoices even if their need arose.