The General Department of Taxation points out a number of value-added tax refund fraud

VCN - The tax industry has been raising vigilance against businesses trading high-risk goods like electronic components, wood products, and agricultural, forestry, and aquatic products to prevent value-added tax (VAT) refund fraud.
Machinery only used for agriculture not subject to VAT Machinery only used for agriculture not subject to VAT
Revamping State management would boost private economic sector: workshop Revamping State management would boost private economic sector: workshop
HCM City aims to support 1,000 innovative start-ups in next five years HCM City aims to support 1,000 innovative start-ups in next five years
2733-1838-13-1602-65f3eb9ea9de408019cf
The import of electronic components has many risks regarding VAT refund Photo: Internet

Warning on VAT refund risks

According to the General Department of Taxation, there have been reports of tax departments with high-risk VAT refunds in some firms that have imported goods (electronic components and computers) with similar design and specifications.

Regarding appropriating VAT refunds, smuggling, and illegally transporting goods across the border of some enterprises in the south, Customs authorities have identified several companies that have appropriated VAT refunds. Customs authorities and C03-Ministry of Public Security agreed with the Supreme People's Procuracy to prosecute the case on smuggling (Article 188); illegally transporting goods and currencies across the border (Article 189); forging seals and documents of agencies or organisations; and using fake seals and documents of agencies or organisations (Article 341).

Through these above violations, the General Department of Taxation synthesised a number of typical and appropriating tax refunds. For example, in some enterprises that import goods (electronic components, computers) with the same design and technical characteristics, the declared value was low when import, but about 50 times higher than that when exported.

Declaring higher export value is another example. Shipments weighing only a few to several tens of kilograms were declared as up to several or tens of billions VND. This posed a risk of buying and selling domestic invoices to increase the value of export goods, leading to illegal money transfer and VAT refund appropriation.

The General Department of Taxation also specified objects with high potential risks such as firms selling products to electronic component exporters not at the registered business address, or frequently change head office address, business owners, legal representatives and information about registered tax administration.

Especially, there are cases of money transfer back and forth between related people (such as family members) in the purchase/sale of goods, and exchange if cash.

Notably, export records including contracts, invoices, accounting books and payment documents do not match the economic nature in accordance with the provisions of the Law on Tax Administration, Law on VAT and legal documents guiding management and use of invoices. Or cases where electronic component exporters do not have real transactions with foreign parties but only receive commissions for export services.

"Tighten" high-risk goods trading enterprises

To prevent the aforementioned violations, the General Department of Taxation asked provincial and municipal tax departments to seriously review enterprises trading in high-risk goods (electronic components, wood products, and agricultural, forestry, and aquatic products) for inspection. After that, based on the actual records; compare them with the provisions of law to handle VAT refunds according to regulations.

It should be noted that when inspecting and examining VAT refunds, the General Department of Taxation needs compare the actual record and nature of the transaction with the provisions of the tax law to quickly detect the violation for handling according to regulations.

VAT refund inspections and examinations must comply with the order and procedures prescribed by law on inspection and examination. At the end of the inspection and examination after the refund, the tax departments of provinces and cities should focus on the recovery of VAT refunds and handling tax violations according to regulations.

If detecting signs of tax law violations, tax departments must collect and consolidate full legal documents to transfer information of law violations to the police.

If the case is complex, it is necessary to report to the People's Committee of the province or city to coordinate with agencies in the same area to punctually inspect and verify the violation.

Tax departments also have to review similar cases for items with high risk of VAT refund; and publicise information about companies that violated tax laws, had illegal acts of buying and selling invoices to taxpayers to prevent and handle similar cases, avoiding loss of State budget revenue.

In the future, the tax office will coordinate with the customs office to rapidly exchange and provide information related to risks of VAT refund.

By Thuy Linh/ Ha Thanh

Related News

Tax policies drive strong economic recovery and growth

Tax policies drive strong economic recovery and growth

VCN - Far more than just a revenue-collection agency, the Tax Department has played a pivotal role in creating a transparent, equitable, and business-friendly environment. These efforts have not only contributed to macroeconomic stability but also fueled recovery and development for businesses, individuals, and households.
Stimulate production and business, submit to the National Assembly to continue reducing 2% VAT

Stimulate production and business, submit to the National Assembly to continue reducing 2% VAT

VCN - Reducing value added tax (VAT) has an impact on the decrease of state budget revenue but also stimulates production and promotes business activities, thereby contributing to creating more revenue for the state budget.
Decree on the implementation of global minimum tax: Ensuring a clear and transparent legal framework

Decree on the implementation of global minimum tax: Ensuring a clear and transparent legal framework

VCN - The decree detailing the implementation of the global minimum tax must align with practical management requirements, ensuring a clear and transparent legal framework that enables businesses to comply with new tax regulations while safeguarding national interests, emphasized Dang Ngoc Minh, Deputy Director General of the General Department of Taxation.
Amendments to the Value-Added Tax Law passed: Fertilizers to be taxed at 5%

Amendments to the Value-Added Tax Law passed: Fertilizers to be taxed at 5%

VCN - With the majority of National Assembly deputies voting in favor, the National Assembly officially approved the revised Value-Added Tax (VAT) Law during its afternoon session on November 26, 2024, as part of the 8th session's agenda.

Latest News

Nearly 18,000 cases of smuggling, trade fraud and counterfeit goods detected

Nearly 18,000 cases of smuggling, trade fraud and counterfeit goods detected

The total estimated value of confiscated goods exceeded VNĐ31.35 trillion (US$1.23 billion), marking a 12.5 per cent increase in cases and a 151.3 per cent surge in the value compared to the previous year.
Customs seizes smuggled goods and infringing products worth VND31,000 billion

Customs seizes smuggled goods and infringing products worth VND31,000 billion

VCN – Smugglers have taken advantage business models on e-commerce platforms, social networks, and postal and express delivery activities to use sophisticated tricks for smuggling and trafficking counterfeit goods.
India launches anti-dumping investigation on nylon yarn imports from Việt Nam

India launches anti-dumping investigation on nylon yarn imports from Việt Nam

The Trade Remedies Authority of Việt Nam recommends businesses involved in the production of the goods carefully review the investigation notice and comply with Indian authorities.
Hanoi Customs: 92% of post-clearance audits reveal violations

Hanoi Customs: 92% of post-clearance audits reveal violations

VCN - According to Hanoi Customs, this year’s post-clearance audit plans focus on high-risk areas with signs of violations.

More News

Noi Bai International Border Gate Customs Sub-department: "Blocking" drugs via air

Noi Bai International Border Gate Customs Sub-department: "Blocking" drugs via air

VCN - Along with the recovery and growth of passenger and cargo flights, illegal drug transportation by air is on the rise with increasingly sophisticated and complex tricks and constantly changing methods of operation to deceive Customs and other authorities.
Drug Crime Investigation Police Force cracks down on nearly 29,000 cases

Drug Crime Investigation Police Force cracks down on nearly 29,000 cases

VCN - This is the result of the fight against drug crimes, recently reported by the Department of Drug Crime Investigation (C04, Ministry of Public Security).
Hai Phong Customs busts illegal import of 600 m3 of precious wood

Hai Phong Customs busts illegal import of 600 m3 of precious wood

VCN – About 600 m3 of illegally imported African teak wood, with an estimated total value of tens of billions of VND, has been seized by Hai Phong Customs Department.
Hai Phong Customs seizes a container of banned goods at port

Hai Phong Customs seizes a container of banned goods at port

VCN – Hai Phong Customs Department in coordination with relevant enforcement authorities has seized a container of used air conditioners subject to the list of prohibited imports.
Nghe An busts drug trafficking ring via aviation

Nghe An busts drug trafficking ring via aviation

VCN – December 25, Dien Chau District Police prosecuted Le Tien Duc, born in 2003, residing in Quynh Tan Commune, Quynh Luu District, for illegally transporting 2 kg of drugs.
Violations via e-commerce in HCM City  surges

Violations via e-commerce in HCM City surges

VCN - In 2024, HCM city Market Surveillance Department inspected and handled 379 violations of e-commerce, an increase of 392.2%; the value of violated goods was more than VND 8.6 billion, an increase of 1,128.57% compared to the previous year.
Tan Son Nhat Airport Customs commended for crackdown on smuggling

Tan Son Nhat Airport Customs commended for crackdown on smuggling

VCN - The National Steering Committee 389 has praised the Tan Son Nhat International Airport Customs Branch for its outstanding performance in combating smuggling, trade fraud, and illegal transportation of goods over the past two years.
Drug trafficking ring busted: Synthetic drugs concealed in pickled bamboo containers

Drug trafficking ring busted: Synthetic drugs concealed in pickled bamboo containers

VCN - Law enforcement agencies successfully dismantled two major drug trafficking operations, seizing a significant quantity of illicit drugs along with firearms and ammunition.
High-risk of foreigners colluding with drug traffickers to produce drugs in Vietnam

High-risk of foreigners colluding with drug traffickers to produce drugs in Vietnam

VCN – The Vietnamese Ministry of Public Security's Investigation Police Department on Drug-related Crimes (C04) said that the Chinese and Taiwanese (China) suspects colluding to illegally procedure synthetic drugs in Vietnam show high-risk.
Read More

Your care

Latest Most read
Nearly 18,000 cases of smuggling, trade fraud and counterfeit goods detected

Nearly 18,000 cases of smuggling, trade fraud and counterfeit goods detected

The total estimated value of confiscated goods exceeded VNĐ31.35 trillion (US$1.23 billion), marking a 12.5 per cent increase in cases and a 151.3 per cent surge in the value compared to the previous year.
Customs seizes smuggled goods and infringing products worth VND31,000 billion

Customs seizes smuggled goods and infringing products worth VND31,000 billion

VCN - The General Department of Vietnam Customs Department (GDVC), the smuggling, trade fraud took place complicatedly in 2024 on routes, regimes, locations, and even in cyberspace.
India launches anti-dumping investigation on nylon yarn imports from Việt Nam

India launches anti-dumping investigation on nylon yarn imports from Việt Nam

The Trade Remedies Authority of Việt Nam recommends businesses involved in the production of the goods carefully review the investigation notice and comply with Indian authorities.
Hanoi Customs: 92% of post-clearance audits reveal violations

Hanoi Customs: 92% of post-clearance audits reveal violations

According to Hanoi Customs, this year’s post-clearance audit plans focus on high-risk areas with signs of violations.
Noi Bai International Border Gate Customs Sub-department: "Blocking" drugs via air

Noi Bai International Border Gate Customs Sub-department: "Blocking" drugs via air

VCN - Deputy Head of Noi Bai International Airport Customs Sub-department Phung Quang Minh said that Noi Bai International Airport currently ranks first in the volume of import and export goods and second in the volume of passengers entering and exiting t
Mobile Version