To:

- Departments of Taxation of provinces and central-affiliated cities;
- Departments of Taxation of major businesses.

As reported by Departments of Taxation, many cases of violating the law on VAT refund have been discovered and promptly prevented; some cases showing signs of crime have been transferred to competent authorities for handling under their authority and regulations of law, thereby contributing to the increase in effectiveness and efficiency in tax administration, the prevention of state budget loss and the enhanced compliance with law by taxpayers. In addition to the positive results obtained, by way of consolidating reports from Departments of Taxation, the General Department of Taxation finds that the instructions of the General Department of Taxation are interpreted and implemented inconsistently by local tax authorities, resulting in difficulties during the implementation.

In order to facilitate uniform implementation in accordance with regulations of law on tax administration, strengthen the compliance with code of conduct upon performing public duties and tasks within the jurisdiction of tax officials and tax authorities during the inspection of VAT refund, the General Department of Taxation requests Departments of Taxation provinces and cities to thoroughly and seriously carry out inspection of VAT refund according to regulations of the Law on Tax Administration dated June 13, 2019 and its guiding documents; direction of the Prime Minister in the Official Dispatch No. 470/CD-TTg dated May 26, 2023; direction of the Minister of Finance in the Official Dispatch No. 01/CD-BTC dated April 12, 2023 and Official Dispatches No. 5427/BTC-VP dated May 26, 2023, No. 9280/BTC-VP dated August 31 /2023 and No. 11630/BTC-VP dated October 25, 2023; direction of the General Department of Taxation in the Official Dispatch No. 07/CD-TCT dated August 09, 2023 and Official Dispatches No. 2099/TCT-KK dated May 26, 2023, No. 2426/TCT-KK dated June 15, 2023 and No. 2489/TCT-VP dated June 19, 2023, and at the same time, proactively and strictly implement the following tasks in a uniform and effective manner:

1. Principles of implementation

- Directors of Departments of Taxation of provinces and central-affiliated cities shall decide tax refund in eligible cases as prescribed by tax laws; take full responsibility for VAT refund within the scope of state management in accordance with regulations of the Law on Tax Administration dated June 13, 2019 and its guiding documents. Make sure all tax officials understand the code of conduct of the taxation sector; powers, obligations and responsibilities of officials assigned to inspect VAT refund. Based on the specific task of tax administration in each province, Directors of Departments of Taxation should take measures to strengthen management and supervision of officials assigned tasks related to the processing of VAT refund applications.

- Risk management principles stipulated in the Law on Tax Administration, its guiding documents, business processes and relevant sets of criteria and risk indicators shall be adhered to. The assessment and analysis of tax and invoice-related risks shall be carried out according to each specific dossier and current tax administration in the locality.

- Post-tax refund inspection shall be carried out drastically to closely control VAT refund to ensure compliance with policies and regulations of law. Departments of Taxation shall assign specific tasks of post-tax refund inspection to each division and request each official to thoroughly cover his/her locality and field assigned. If any suspicion exists during his/her performance of official duties, immediately report it to a competent authority for consideration and decision.

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- Review and aggregation of system information and application of information technology shall be promoted to share information stored on databases of assessed tax administration and invoice management -related risks and promptly inspect and supervise tax refund according to the provisions of law. Departments of Taxation shall inspect tax refund according to Articles 77 and 110 of the Law on Tax Administration.

- For dossiers on pre-tax refund inspection, Departments of Taxation shall assign the task of inspection of applications for tax refund upon receiving the applications. If, during the inspection, a force majeure event occurs and the inspection cannot continue, the chief of the inspectorate shall report it to the person that issued the tax inspection decision in order to suspend the inspection. Force majeure event is specified in clause 27 Article 3 of the Law on Tax Administration and clause 1 Article 3 of the Decree No. 126/2020/ND-CP. Leaders of Departments of Taxation and leaders of inspection divisions shall supervise each inspectorate to ensure that procedures are followed in accordance with regulations of Law on Tax Administration and tax inspection procedures.

- After the deadline for processing the tax refund application, if no response is received from a competent authority, the Department of Taxation shall submit a written request to a competent authority for its opinions on the failure to provide information; shall end the inspection on time and process the tax refund application as prescribed in point dd clause 1 Article 34 of the Circular No. 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance.

- In case the taxpayer has to undergo an inspection visit under an approved plan and has a tax refund application that is subject to inspection before refund, the Department of Taxation shall prioritize inspection of such refund application and assign personnel to implement the plan according to regulations of law on tax inspection, and regulations on processing of applications for tax refund under the Law on Tax Administration and its guiding documents.

3. Verification

- The verification shall be carried out on the basis of specific tax-related risks within the jurisdiction of a tax authority. A verification proposal must include specific analyses and assessments made by way of signs of violating the law on tax and invoices collected by the tax authority or received from the third party. The scope of the verification proposal should be determined according to regulations of laws on tax and tax administration and other regulations of law on the purchase and sale of goods and services to properly define the taxpayer's responsibility for managing and using invoices as well as declaring and determining relevant tax obligations.

- The inspection and verification shall be carried out in compliance with regulations to meet the deadline for processing applications subject to pre-tax refund inspection. If the verification and inspection shows any sign of violation committed by the entities purchasing and selling goods through previous stages, the Department of Taxation shall impose a penalty on the violating taxpayer as prescribed by law.

- Attention shall be paid to the use of e-invoices in order to shorten verification time and quickly determine the entities to be verified.

4. Instructional documents on inspection and verification of VAT refund:

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The issuance of the above Official Dispatches is necessary in the situation where documents elaborating the Law on Tax Administration dated June 13, 2019 and risk management processes have not yet been issued and tax authorities have received plenty of warnings about tax fraud and violations of the law on VAT refund to exploit the state budget, thereby promptly warning and notifying tax authorities at all levels of potential risks to tax administration in general and inspection of VAT refund in particular.

To date, legislative documents on tax administration have been issued, business processes and sets of criteria and risk assessment indicators in support of tax administration, and apps have been developed within jurisdiction, including the Decision No. 679/QD-TCT dated May 31, 2023 of the General Department of Taxation on promulgating tax refund procedures, Decision No. 970/QD-TCT dated July 14, 2023 of the General Department of Taxation on promulgating tax inspection procedures, Decision No. 1388/QD-TCT dated September 18, 2023 of the General Department of Taxation on applying management of risks to classification of VAT refund applications and selection of taxpayers for formulation of post-refund inspection plans. Accordingly, the requirements for modern tax administration in accordance with the risk management principles under the Law on Tax Administration are basically met.

The General Department of Taxation requests that tax authorities at all levels manage risks, inspect and verify VAT refund contents according to the regulations set out in legislative documents, business processes, sets of relevant criteria and indicators and instructions in this Official Dispatch.

For your information and compliance./.

PP. THE DIRECTOR GENERAL
THE DEPUTY DIRECTOR GENERAL




Vu Chi Hung

APPENDIX

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No.

Number

Date

Subject

1

2124/TCT-TTKT

22/5/2020

Re. processing of tax refund applications

2

...

...

...

22/7/2020

Re. inspection of VAT refund

3

3846/TCT-TTKT

15/9/2020

Re. VAT refund for wood chips and finished wood products

4

429/TCT-TTKT

22/02/2021

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...

...

5

776/TCT-TTKT

22/3/2021

Re. thematic inspection of VAT refund for wood chips, electronic components and computer components

6

1284/TCT-TTKT

28/4/2021

Re. inspection of VAT refund for wood chips, electronic components and computer components, coffee, vermicelli, pho, etc.

7

...

...

...

18/4/2021

Re. intensified inspection of VAT refund

8

55/TCT-TTKT

20/5/2021

Re. reviewing inspection of VAT refund for rubber, cassava chips, and agricultural products

9

2495/TCT-TTKT

08/7/2021

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...

10

3534/TCT-TTKT

16/9/2021

Re. intensified inspection of VAT refund

11

63 2/T CT-TTKT

07/3/2022

Re. VAT refund for manioc (cassava) starch

12

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...

07/3/2022

Re. inspection of enterprises having risky VAT refunds

13

1043/TCT-TTKT

07/4/2022

Re. organizing inspection of enterprises having risky VAT refunds

14

1477/TCT-TTKT

09/5/2022

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15

1873/TCT-TTKT

01/6/2022

Re. intensified control and inspection to detect invoice fraud and prevent VAT refund fraud

16

3311/TCT-TTKT

08/9/2022

Re. VAT refund for cellular telephones

Công văn 5004/TCT-TTKT năm 2023 thực hiện thanh tra, kiểm tra hoàn thuế giá trị gia tăng do Tổng cục Thuế ban hành