10 Tax Events in 2022

2022 was the second year of implementing the Resolution of the 13th Party Congress and the Five-Year Plan for the 2021-2025 period, as well as the key year to implement the Tax System Reform Plan. The tax industry has achieved important results including effective facilitations for the Vietnamese business community. Vietnam Business Forum would like to introduce 10 outstanding tax events in 2022.

The General Department of Taxation is honored with the Certificate of Appreciation from the Prime Minister and the Emulation Flag from the Ministry of Finance

1. Fulfilling State Budget collection task

Despite facing numerous difficulties and challenges, especially the COVID-19 pandemic and the Russia-Ukraine conflict, which placed great pressure on State Budget revenue and forced the Government to adopt many tax (exemption, reduction and rescheduling) policies to support businesses and the economy to recover, with the leadership of the Party, the drastic direction and administration of the National Assembly, the Government and the Ministry of Finance, the effort of the business community to maintain production and business activities and the high determination of tax officers, especially to prevent revenue loss in real estate and e-commerce sectors, the tax sector managed to collect an estimated VND1,460.1 trillion (US$62 billion), equal to 124.3% of the target, up 8.5% over 2021. Up to 63 out of 64 tax departments completed and exceeded their assigned budget revenue targets.

This impressive result helped maintain macroeconomic stability and ensured macro balances in budgetary finance. This remarkable effort demonstrated the determination of the tax industry to overcome difficulties, make bold reforms and introduce flexible and creative solutions to successfully complete tasks.

2. Tax System Reform Strategy to 2030 released

On April 23, 2022, the Prime Minister signed Decision 508/QD-TTg on the Tax System Reform Strategy to 2030. This is an important document and a guideline for the tax sector to launch consistent solutions to tax system reform. Accordingly, the tax policy system will be reformed together with restructuring State Budget revenue by covering all revenue sources, expanding revenue sources, especially new sources, in line with international practices. Tax administration will be comprehensively modernized, driven by electronic taxation and built on three basic pillars: tax administration institutions, human resources and information technology, towards building a modern, efficient and effective tax sector.

To implement the strategy, the General Department of Taxation worked out a specific action program for the period up to 2030 and a tax system reform plan to 2025 with solutions, roadmaps and tasks for leading units to carry out assigned strategic tasks.

3. Deploying the largest-ever tax and fee support package, actively helping businesses and people quickly recover and develop

In 2022, the tax industry continued to implement tax extension, exemption and reduction policies and land rent policies to support people and businesses to carry out the Economic Recovery and Development Program with a total amount of over VND186 trillion.

Of the sum, the VAT reduction, as per Decree 15/2022/ND-CP, amounted at VND20.04 trillion; the environmental protection tax reduction for jet fuels, as per Resolution 13/2021/UBTVQH15 and Resolution 20/2022/UBTVQH15, was about VND1,906 billion; a 50% reduction of environmental protection tax was granted on gasoline, diesel, fuel oil, lubricants and greases; a 79% cut of environmental protection tax was given to kerosene as per Resolution 18/2022/UBTVQH15; a maximum reduction in the regulatory bracket of environmental protection tax subject to gasoline, diesel oil, fuel oil, lubricant, grease, kerosene, and jet fuel as per Resolution 20/2022/UBTVQH15 was valued at VND26,307 billion; taxpayers were granted an extended period to pay about VND96,316 billion of tax as per Decree 34/2022/ND-CP; the payment of special consumption tax of VND9,603 billion on domestically manufactured and assembled automobiles, as per Decree 32/2022/ND-CP, was granted longer payment terms; and fees and charges were slashed by VND900 billion, according to Circular 120/2021/TT-BTC.

The timely and effective implementation of support solutions on taxes, fees, charges and land rents was considered to have a positive impact and was highly appreciated by the business community and people for quick help for dealing with difficulties, sparing more resources for business stabilization, and speeding up the socioeconomic recovery and development of the country in the end.

Minister of Finance Ho Duc Phoc, VCCI President Pham Tan Cong, and other leaders at the launching ceremony of a portal for foreign suppliers and an electronic tax mobile app

4. Launching e-invoices ahead of schedule

Following the success of the first phase of e-invoice in six provinces and cities in 2021, on April 21, 2022, the General Department of Taxation started the second phase in 57 remaining provinces and cities. With high determination as well as many consistent and unified measures and solutions, the tax sector successfully launched e-invoices more than 2 months ahead of schedule as stated in Decree 123/2020/ND-CP, accelerated digital transformation and modernization of the tax sector in particular and the financial industry in general.

At present, all companies in the country are using e-invoices and all business households and individuals are registering to use e-invoices. A total of over 2.1 billion e-invoices have been issued.

The successful implementation of e-invoices helped Vietnam transform the way it served people and businesses and automated management of tax authorities in order to reform administrative procedures and create a transparent and equitable business environment; sped up e-commerce and business development on digital platforms in line with the world trend; brought a lot of common benefits to society such as saving costs and resources and protecting the environment. In particular, in order to encourage consumers to take e-invoices to create modern consumption habits to enhance retail revenue management, the tax authority reported to competent authorities to launch the “Lucky Invoice” Program from randomly selected e-invoice codes. A total of 2,700 prizes worth VND6 billion were given to consumers.

With outstanding achievements in e-invoice rollout, the Prime Minister recognized, praised and awarded the Certificate of Merit to the General Department of Taxation under Decision 54/QD-TTg dated July 25, 2022. The extensive effect of e-invoice solutions helped the General Department of Taxation win the "Excellent Digital Transformation State Agency" at the Vietnam Digital Transformation Awards 2022.

5. Deploying an e-information portal for foreign suppliers and a portal for receiving information from

e-commerce platforms - a forward step in tax management with international trends

By becoming one of the four leading ASEAN countries to apply tax collection to foreign suppliers through the online electronic information portal, Vietnam affirmed its sovereignty over tax collection to e-commerce business, and business on digital platforms.

After more than eight months of implementation (from March 21, 2022), 42 foreign suppliers registered to declare and pay taxes through the portal, with a total amount of tax paid of more than VND3,444 billion of which nearly VND1,900 billion was declared and paid directly by foreign suppliers, while the rest was deducted and paid for by Vietnamese parties (Facebook: VND1,748 billion and Google: VND 979 billion). Notably, six large foreign suppliers - Meta (Facebook), Google, Microsoft, TikTok, Netflix and Apple - accounted for 90% of the market share in e-commerce service revenue on cross-border digital platforms in Vietnam that have registered for tax declaration and tax payment in Vietnam.

Also in 2022, the tax sector officially operated the e-commerce information and data portal to receive information from organizations and individuals doing business on e-commerce platforms in case e-commerce platforms did not declare tax for individuals. With outstanding features of data aggregation of information from e-commerce platforms and information from suppliers (organizations and individuals doing business on e-commerce platforms) as well as functions of administration, decentralization and data transfer/reception to ensure information safety and security, the e-commerce information portal is a new beginning in e-commerce tax management, a step towards preventing revenue loss in this field.

6. Comprehensively digitized tax administration, streamlined administrative procedures

Consistent with the motto “Placing people and businesses at the heart of service”, in the past year, the tax sector stepped up information technology applications to tax management and gradually adopted comprehensive digital transformation.

Accordingly, the tax sector deployed an electronic tax service system (eTax) to 99% of businesses that were using electronic tax declaration, tax payment and tax refunds; launched the e-invoice system nationwide; connected and exchanged information with ministries/sectors, external units and organizations in order to socialize tax services by electronic means. The comprehensive digitization of tax administration significantly reduced tax administrative procedures.

According to statistics, since the end of 2021, administrative procedures decreased from 304 to 234, of which 103 procedures were classified Level 3 and Level 4, with 97 of them integrated into the National Public Service Portal. This move saved over VND524 billion in compliance costs for people and businesses. This result exceeded the target set by Resolution 68/NQ-CP of the Government.

7. Introducing the index of service quality to people and businesses nationwide

In 2022, the General Department of Taxation launched a plan to introduce the index of service quality to people and businesses in real-time delivery of public services in the electronic environment according to the Prime Minister’s Decision 766/QD-TTg. The index was determined by five subindices: Publicity and transparency; progress and result of work settlement; record digitization; delivery of online public services; and satisfaction degree.

To apply this index, the General Department of Taxation and provincial/municipal taxation departments are responsible for updating the status of records, the progress and punctual delivery of administrative procedures settlement results, synchronizing data on the National Public Service Portal; and digitizing records and results of administrative procedures settlement in electronic media. The General Department of Taxation also gauges public and business satisfaction through its real-time automatic monitoring and evaluation system. The outcome is updated on the National Public Service Portal and the Public Service Portal of the Ministry of Finance and the General Department of Taxation.

With this index, the tax sector showed its resolve to continuously improve service quality and transform from an administrative agency into a companion of taxpayers.

8. Consolidating professional, modern and effective apparatus to meet new requirements

In 2022, the General Department of Taxation continued to complete the organizational structure of four agencies, namely: Department of Taxation of Large Enterprises; Tax Inspection Department; Department of Internal Audit, Settlement of Complaints, Denunciations & Anticorruption; and some units under the Office of the General Department of Taxation as per the Prime Minister's Decision 15/2021/QD-TTg.

In addition to establishing new professional bodies, the General Department of Taxation consolidated leadership of the four agencies to ensure independent direction and operations.

Besides, with the goal of developing professional personnel who are capable of holding many different positions, along with job-based training and retraining for employees, the tax sector rotated, transferred and changed working positions for more than 3,479 employees; strengthened discipline, transparency and accountability in public service; clearly defined functions, tasks, responsibilities and authority of each level of tax authority and each individual on duty; and reviewed and developed plans to send young employees to localities to practice and accumulate experiences to meet working requirements in the new development phase of the tax industry.

9. Signing the Convention on Mutual Administrative Assistance in Tax Matters (MAAC)

In order to implement international commitments to tax agreements under the Prime Minister's Decision 2072/QD-TTg dated December 10, 2021 on approval of the Project on “Reviewing and evaluating the effectiveness of double tax avoidance agreement, impacts on Vietnam's tax policy space and directions for amendment”, in 2022, after completing the review procedure on taxpayer data security and receiving an invitation letter from the Secretary-General of the OECD, the Government of Vietnam agreed to sign the Convention on Mutual Administrative Assistance in Tax Matters (MAAC) to strengthen international cooperation in tax administration.

This is the most comprehensive multilateral international legal framework that embraces various forms of international cooperation in tax administration to tackle tax evasion and tax avoidance. According to statistics, to date, 144 countries have signed MAAC, of which 63 countries signed tax agreements with Vietnam. The entry into MAAC will create a premise for Vietnam to sign the Multilateral Competent Authority Agreement (MCAA) on Standard for Automatic Exchange of Financial Account Information in Tax Matters (CRS); Country-by-Country Reporting (CbC) and tax rules to facilitate effective Base Erosion and Profit Shifting (BEPS) Action Plan 13. At the same time, it helps quickly increase the tax information exchange network with MAAC participants.

It is also a global tool that best supports multilateral cooperation in information exchange and other forms of tax administrative support.

10. Successfully organizing E-commerce Tax Writing Contest

One year after its launch, on September 12, 2022, under the direction of the General Department of Taxation, the Tax Magazine held an awarding ceremony for the E-commerce Tax Writing Contest. Although this is a new and difficult field and this is the first time it is held in Vietnam, given its urgency and much interest, just in a short time amid the pandemic, the contest attracted the participation of many reporters, journalists, scholars, experts, economic researchers, associations, organizations, enterprises and people across the country, with a total of 1,313 works submitted for the competition.

After three rounds of qualification, preliminary scoring and final, the Finals Council unanimously awarded 38 works, including three A prizes, five B prizes, 10 C prizes, 20 consolation prizes, and presented the Collective Award to five units that actively participated and had many good submissions.

Beyond the awards, competing articles provided authorities with a multidimensional analysis of current e-commerce and tax administration legislation in this field; clarified transaction methods and means of payment; highlighted the operating scale of industries and fields with e-commerce. This thus helped propose practical solutions for tax authorities to conduct research, construction and perfection of solutions and introduce effective tax policies to e-commerce.

Source: Vietnam Business Forum