Proposal to exclude criminal liability for tax officials when businesses provide false information to refund VAT

The draft Law has narrowed the subjects not subject to VAT to ensure the continuity of VAT deduction and payment. Photo: H.Anh

The draft VAT Law (amended) retains the content specified in five Articles of the current VAT Law including the scope of VAT adjustment, taxable objects, tax basis, tax calculation method... At the same time, removing one article of the current VAT Law regulating invoices and documents. The draft amends and supplements the contents specified in 10 Articles of the Law such as taxpayers; tax-exempted individuals; taxable price; tax; and cases of tax refund,...

A notable point in the draft Law is that it has narrowed the subjects not subject to VAT to ensure the continuity of VAT deduction and payment; and handle problems during the implementation. Although there are still 26 groups of goods and services that are not subject to tax, many goods and services that are not subject to VAT in the non-taxable groups have been transferred to the group subject to VAT, for example fertilizers; specialized machinery and equipment serving agricultural production; offshore fishing vessels; securities depository; market organization services of stock exchanges or securities trading centers; postal services, public telecommunications and Internet under the Government's program; maintenance services for zoos, flower gardens, parks, street trees, public lighting...

According to Ms. Nguyen Thi Thanh Hang, Deputy Director of the Department of Tax Policies, Fees and Charges Supervisory Authority (Ministry of Finance), one of the notable contents in the Draft is the issue of tax refunds. This content is proposed by the Ministry of Finance to amend, abolish, and supplement many new regulations in Article 14.

Accordingly, it is stipulated that investment projects eligible for VAT refund are "investment projects (new, expanded) following the provisions of investment law (including investment projects divided into many investment phases" or multiple investment items, except in cases where investment projects do not form fixed assets) are in the investment phase. To ensure a transparent policy and avoid different interpretations, the Draft clearly supplements the regulation: " In case the investment project has been completed (including investment projects divided into multiple phases, investment items with phases, investment items have been completed) but the business establishment has not yet refunded VAT arising during the investment phase (investment item, investment phase completed), the business establishment shall refund VAT according to regulations within 1 year from the date of the investment project or the date of the investment phase, investment items completed. The date that the investment project is completed is the date of arising the revenue of the investment project or the investment item or phase (for investment projects divided into multiple phases and investment items)”.

Notably, Ms. Nguyen Thi Thanh Hang said that in the Draft, the Ministry of Finance submitted to the Government on supplementing regulations on the responsibilities of the Tax agency in processing VAT refund applications. Accordingly, when performing tax refund duties or tax refund inspections, tax officials are exempted from criminal liability in cases where taxpayers provide dishonest or inaccurate information, or documents, at the time of carrying out tax refund or the completion of tax refund inspection and inspection activities, tax officials do not aware of this or are not responsible for knowing about the truthfulness and accuracy provided by the taxpayer and tax officials have complied with the legal regulations on VAT and tax administration laws, and have complied with the regulations and procedures on risk management of VAT refund.

According to experts, this draft Law also has a breakthrough change, helping businesses with products and services enjoy 5% output VAT incentives, lower than input VAT (many products have input VAT is about 7-8%) to remove difficulties and provide full incentives for groups of encouraged goods and services. Accordingly, the draft law supplement subjects eligible for VAT refund to "business establishments producing goods and providing services subject to a 5% VAT rate if there is input VAT that has not been fully deducted from VND300 million or more after 12 months or 4 quarters”.