The Tax sector strives to implement value-added tax refunds

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The Tax sector is making efforts to resolve VAT refund files, contributing to timely alleviation of difficulties for businesses. Photo: H.Anh"

Issued 16,851 tax refund decisions

In recent times, the complex developments in the world's political, economic, and social situation have deeply affected the production and business activities of domestic enterprises. In this context, the National Assembly, the Government, and the Ministry of Finance have timely issued strong directives to enhance the resolution of value-added tax (VAT) refunds, ensuring compliance with legal regulations, but must strictly control prevention and control. Tax refund fraud causes loss of state budget.

According to data from the Declaration and Tax Accounting Department (General Department of Taxation), with the determination and urgency of tax authorities at all levels, the management of VAT refund has shown positive changes. By the end of November 2023, tax authorities have issued 16,851 decisions corresponding to a refunded amount of 128,488 trillion VND, accounting for 80.3% of the actual estimates reported to the Government and the National Assembly (160,000 trillion VND).

According to Ms. Le Thi Duyen Hai, the Head of the Declaration and Tax Accounting Department, in the recent period, the General Department of Taxation has implemented numerous measures to intensify the resolution of value-added tax (VAT) refunds. Specifically, in 2023, the General Department of Taxation has issued a new tax refund procedure; released a set of criteria for applying risk management in classifying VAT refund files and selecting businesses with risk indicators for planning inspections and audits after VAT refunds. There has been a prompt upgrade and improvement of information technology applications to ensure automation in the classification of VAT refund files, electronic processing of VAT refund procedures, thereby expediting the resolution of VAT refund files and maintaining tight control to prevent risks in the management of VAT refunds. In addition, the General Department of Taxation has issued numerous directives to tax authorities at all levels, emphasizing the acceleration of VAT refund activities, avoiding delays in tax refunds, ensuring the enhancement of inspection and audits after VAT refunds to maintain strict control and timely detection of fraudulent activities, preventing losses to the state budget. In 2023, in successfully fulfilling the task of VAT refund management, the General Department of Taxation has also established several task forces to identify challenges in VAT policies, tax management policies from tax authorities at all levels, and business associations. This is aimed at developing appropriate guidance solutions based on practical situations; synthesizing challenges to report to the competent authorities for consideration in supplementing, amending VAT policies, tax management, as well as related laws.

Thoroughly resolving challenges

Alongside positive outcomes, the practicalities of tax refund activities have encountered several difficulties, leading to prolonged refund processing times. According to feedback from local tax offices, tax authorities lack the function of investigating and combating tax fraud. Consequently, collecting information and documents to clarify the nature of transactions between businesses has proven challenging, resulting in risks in the resolution of tax refunds. Additionally, the verification of invoices and waiting for verification results from other units are often slow, further delaying the tax refund process. For instance, according to regulations, the deadline for resolving pre-audit files and subsequent tax refunds is 40 days from the date of receiving the complete tax refund documents from the taxpayer. However, for pre-audit files, to determine the tax amount, tax authorities must verify invoices and the origin of purchased goods up to the final stage. Challenges arise during the verification of input when, at the time of tax refund, companies requesting a refund are asked to provide complete documents, ledgers, and evidence demonstrating legal transactions. Businesses supply goods with invoices F1, F2, F3, etc., and are assumed to be operating at the time of tax submission. However, during the inspection and verification process, the input businesses are found to be inactive at their registered business address.

According to feedback, the inspection and tax audit process has encountered numerous challenges regarding policies, necessitating the solicitation of opinions from various relevant units. This has resulted in the inability to guarantee tax refunds within the required timeframe. Some tax refund cases have had to be suspended in instances where, during the inspection and audit process, the tax authorities discover indications of legal violations by the taxpayer. In such cases, the tax authorities have forwarded the files to the law enforcement agency for investigation or have been subject to the competent state authority's seizure of accounting records and relevant invoices related to the requested tax refund.

To continue resolving value-added tax (VAT) refund cases in the last month of 2023, contributing to timely alleviation of difficulties for businesses, Deputy Director General of the General Department of Taxation, Mai Son, proposes that the functional units within the General Department continue to closely coordinate with tax offices to thoroughly address challenges in the management of VAT refunds. Simultaneously, maximize the use of information technology applications for tax refunds to automate the acceptance of documents, creating uniformity in selecting taxpayers with risk indicators for classifying VAT refund files and developing inspection and audit plans after VAT refunds.

The leadership of the General Department of Taxation requests the directors of provincial and city tax departments to urgently and promptly report to the General Department of Taxation any pending value-added tax (VAT) refund cases before December 15, 2023. Specifically highlighted are the VAT refund cases under pre-audit checks that have exceeded the 40-day resolution period from the date of receiving the tax refund request documents from the taxpayer. Additionally, the tax departments are urged to enhance communication and outreach to business associations and taxpayers regarding VAT refund policies, electronic invoices to improve taxpayers' compliance in VAT declaration and refunds.