Decision No. 2404/QD-BTC dated September 27, 2012 of the Ministry of Finance on stipulating the regime of examination following value-added tax refund

THE MINISTRY OF FINANCE

Decision No. 2404/QD-BTC of September 27, 2012, on stipulating the regime of examination following value-added tax refund

THE MINISTER OF FINANCE

Pursuant to November 29, 2006 Law No. 78/2006/QH11 on Tax Administration, the Government’s Decree No. 85/2007/ND-CP of May 25, 2007, detailing a number of articles of the Law on Tax Administration, and Decree No. 106/2010/ND-CP of October 28, 2010, amending and supplementing a number of articles of Decree No.85/2007/ND-CP, and guiding documents;

Pursuant to June 3, 2008 Law No. 13/2008/QH12 on Value-Added Tax and guiding documents;

Pursuant to the Government’s Decree No. 118/2008/ND-CP of November 27, 2008, defining the functions, tasks, powers and organizations structure of the Ministry of Finance;

At the proposal of the General Director of Taxation;

DECIDES:

Article 1. To promulgate together with this Decision the regime of examination following value-added tax refund.

Article 2. This Decision takes effect 45 days from the date of its signing.

The General Director of Taxation, the General Director of Customs, directors of provincial-level Tax Departments, directors of provincial-level Customs Departments, and related units shall implement this Decision.

For the Minister of Finance
Deputy Minister
DO HOANG ANH TUAN

Regime of examination following value-added tax refund

(Promulgated together with the Minister of Finance’s Decision No. 2404/QD-BTC of September 27, 2012)

Part I

GENERAL PROVISIONS

1. To clearly define tax offices’ responsibilities for examination of value-added tax (VAT) refund according to the Law on Value-Added Tax and the Law on Tax Administration.

2. This regime applies to settlement of tax refund at tax offices’ head offices and post-tax refund examination at taxpayers’ head offices for VAT refund request dossiers of taxpayers eligible for tax refund before examination.

Part II

TAX REFUND EXAMINATION

I. SETTLEMENT OF TAX REFUND AT TAX OFFICES’ HEAD OFFICES

1. Tax offices at all levels shall process VAT refund dossiers eligible for tax refund before examination according to the Law on Tax Administration, the Law on Value-Added Tax, relevant Government decrees and Ministry of Finance circulars, and the General Department of Taxation’s tax refund process.

2. Taxpayers’ direct managing tax offices shall compare tax and fine arrears (including tax and fine arrears managed by customs offices) declared by taxpayers at the time of tax refund with information on the tax and fine arrear monitoring application (using digital signatures) connected to the General Department of Customs’ website, and clear tax and fine arrears (if any) against refundable tax amounts upon issuing tax refund decisions under regulations.

The clearing of tax and fine arrears managed by customs offices shall be conducted as follows:

+ For immediate future when a website application using digital signatures for tracking tax and fine arrears managed by customs offices is unavailable on the General Department of Customs’ website, tax offices shall make notice of suspension of tax refund based on figures of taxpayers’ tax and fine arrears on the General Department of Customs’ website at www.customs.gov.vn and send them to taxpayers, and clear refundable amounts against payable amounts under Point 6.4.1, Section I, Part B of the Ministry of Finance’s Circular No. 128/2008/TT-BTC of December 24, 2008, guiding the collection and management of state budget revenues through the State Treasury.

+ When a digital signature-using application is installed on the General Department of Taxation’s and the General Department of Customs’ websites and tax arrear information can be more fastly updated, tax offices shall use information on these websites for shortening time.

The clearing of refundable tax amounts against tax and fine arrears managed by customs offices also applies to VAT refund dossiers subject to examination before tax refund.

3. In the course of processing a tax refund dossier, if the tax office determines that a tax amount does not satisfy conditions for refund and requires the taxpayer to explain and supplement information, it shall notify such in writing to the taxpayer for making explanation and supplementation under regulations as grounds for tax refund. Past the notified time limit, if the taxpayer fails to explain or supplement the dossier as required or explain (for the second time) but cannot prove the truthfulness of the declared tax amount, the tax office shall promptly subject the dossier to examination before tax refund. For tax amounts eligible for refund, tax offices may temporarily refund them regardless of examination of the whole dossiers.

II. POST-TAX REFUND EXAMINATION AT TAXPAYERS’ HEAD OFFICES

1. Tax offices at all levels shall conduct post-tax refund examination at taxpayers’ head offices for tax refund dossiers eligible for tax refund before examination under the Law on Tax Administration and relevant guiding documents (except for VAT refund for taxpayers entitled to diplomatic privileges and immunities).

A provincial-level Tax Department shall direct each district-level Tax Department in conducting post-tax refund examination. The examined tax refund dossiers eligible for tax refund before examination which are sizeable, complicated and properly processed shall be included in the common tax examination and inspection target of the provincial-level Tax Department.

Post-tax refund examination complies with the Law on Tax Administration, the Law on Value-Added Tax, the Government’s decrees, the Ministry of Finance’ circulars and the General Department of Taxation’s tax examination process and tax refund process.

A written record on post-tax refund examination must indicate the following: document on settlement of tax refund; tax refund period (from … to …); refunded tax amount; case of tax refund, tax amount eligible for refund, tax amount ineligible for refund detected through post-tax refund examination and recommended for recovery (if any); related invoices and vouchers; identification of tax law violations and recommendation on handling of these violations and fines (if any).

2. Tax offices shall conduct post-tax refund examination within 1 year after issuing decisions on tax refund before examination in the following cases:

a/ Business establishments declare accumulated losses in 2 consecutive years or more or have their losses exceeding their registered capital by the time of submission of tax refund dossiers;

b/ Business establishments are eligible for tax refund from real estate business, trade and services;

c/ Business establishments relocate their business places within 12 months prior to tax refund decisions;

d/ Business establishments’ taxed turnover and refundable tax amount see abnormal changes within a 12-month period.

For other decisions on tax refund before examination, tax offices shall conduct post-tax refund examination on the risk-based principle (processing firstly dossiers which are sizeable, complicated with large refundable tax amounts) within 10 years after issuing tax refund decisions.

3. In case the tax office detects through post-tax refund examination that the taxpayer violates the tax law, it shall sanction the violation under the Government’s Decree No. 98/2007/ND-CP of June 7, 2007, providing the handling of tax law violations and the enforcement of tax-related administrative decisions, and the Ministry of Finance’s guiding documents.

4. Report on results of post-tax refund examination

a/ Monthly and annually, provincial- and district-level Tax Departments shall report on results of post-VAT refund examination to their superior tax offices according to contents, forms and time limit provided in the General Department of Taxation’s tax refund process.

b/ The General Department of Taxation shall summarize and report results of post-tax refund examination to the Ministry of Finance.

Part III

ORGANIZATION OF IMPLEMENTATION

1. The General Department of Taxation shall direct and guide provincial-level Tax Departments in complying with this regime; monitor, examine and supervise post-tax refund examination under law and this regime.

It shall direct provincial-level Tax Departments in monitoring, examining and supervising tax refund at provincial- and district-level Tax Departments under law and this regime; biannually and annually send reports on preliminary review and review of tax refund examination together their work reports. Provincial-level Tax Departments shall send their reports on tax refund examination to the General Department of Taxation within 5 (five) days after preliminarily reviewing or reviewing the work.

The General Department of Taxation and provincial-level Tax Departments shall examine their subordinate tax offices in observing the tax refund process under regulations and extraordinarily examine their subordinate tax offices with respect to abnormally refunded tax amounts.

The General Department of Taxation shall assume the prime responsibility for, and coordinate with the General Department of Customs in, developing a tax administration application for exchange of information and receipt of data on tax and fine arrears managed by customs offices in service of the coordination between tax offices and customs offices in recovering tax and fine arrears for customs offices upon settling tax refund.

2. The General Department of Customs shall:

- Coordinate with the General Department of Taxation in developing a tax administration application and communicating information and electronic data on tax and fine arrears managed by customs offices to the General Department of Taxation.

- Direct provincial- and district-level Customs Departments in coordinating and timely certifying tax and fine arrears at the requests of tax offices.

- Assume the prime responsibility for, and coordinate with the General Department of Taxation in, developing a tax administration application for exchange of information and receipt of data on tax and fine arrears managed by tax offices in service of the coordination between customs offices and tax offices in recovering tax and fine arrears for tax offices upon settling tax refund.

- Direct customs offices at all levels in clearing tax and fine arrears managed by tax offices before refunding export or import duty as provided at Point 2, Section I, Part II of this regime.

3. Heads of tax offices and customs offices shall assign their officers to implement this regime. The General Department of Taxation shall coordinate with the General Department of Customs and related units in formulating mechanism and process of exchanging tax and fine arrear information in settling tax refund and clearing tax and fine arrears.

Any problems arising in the course of implementation should be promptly reported by related organizations and individuals to the Ministry of Finance (the General Department of Taxation) for guiding settlement.-

For the Minister of Finance
Deputy Minister
DO HOANG ANH TUAN