Intensifying E-Invoice Management

Invoice management has been closely watched by the National Assembly, the Government, and the Ministry of Finance. However, it is reported that invoice trading to avoid taxes has still occurred. Consistent actions and participation are needed to restrict illegal invoice trading.

The tax sector closely works with competent agencies to handle acts of illegally trading invoices

IT application to invoice management

The tax sector has implemented e-invoices nationwide. The e-invoice system tracks all data of the buyer and the seller. If the buyer or the seller illegally buys or sells invoices, their act will be detected and handled by the law. To detect illegal invoice buying and selling cases early, the tax sector has deployed information technology solutions such as speeding up invoice management based on standard risk analysis to identify highly suspected taxpayers for inspection. They are also intensifying information collation between taxpayer data in their tax return records with electronic invoice data that the taxpayer created and sent to the tax authority to produce a list of taxpayers with different information in records and data. This ensures that taxpayers declare taxes correctly and sufficiently and do not delay tax payments. The tax sector is controlling electronic invoice information and checking for early warning signs to figure out cases that need regular monitoring and inspection. This will be done on a daily basis to deliver early warning against taxpayers with signs of risk.

The sector has researched and applied big data processing technology and artificial intelligence technology to analyze e-invoice data to manage risks and detect suspicious, fraudulent invoice buying and selling cases. Tax departments of provinces and cities will focus on taking stronger action in peak months to prevent and combat acts of illegal invoice buying and selling and tax refund fraud. In peak months, many tax agencies at all levels worked aggressively to deal with tax fraud and illegal trading and the use of invoices. They continued to widely communicate to people and businesses on the media on tax and legal policies and on invoices, and publicize information about organizations and individuals whose acts of illegal invoice buying and selling have been prosecuted by the police. At the same time, they also informed people and businesses of the risk of being administratively fined or criminally prosecuted for using illegal invoices to declare taxes. The act of invoice selling is prosecuted for penal liability according to the Penal Code. The sector closely worked with investigation agencies under the Ministry of Public Security to handle acts of selling invoices; trace and handle invoice purchasers; and thoroughly handle any act of covering up illegal use of invoices.

Coordinated actions with relevant bodies

The General Department of Taxation promptly carried out consistent solutions to prevent e-invoice fraud and strictly handle violations committed by organizations and individuals who buy and use illegal invoices. At the same time, the department also sent a written request to related agencies and sectors to cooperate in preventing and handling acts of invoice fraudulence and illegal use of invoices. Particularly, it advised the Ministry of Finance to propose amending the decree on business registration and the Law on Enterprises to include the regulation that the legal representative of a company must be authenticated with the national database on the population of the Ministry of Public Security. In case the legal representative breaches the tax law or abandoned his/her business addresses and/or did not fulfill his/her tax obligations and he/she wants to establish a new business, there should be a specific provision regarding this matter like not granting the certificate of new business incorporation and issuing warning information about risks with preventive measures.

In the coming time, to tackle falsified documents for business establishment or hire a third party to found a corporate entity to sell invoices, the Ministry of Finance suggested the Ministry of Planning and Investment study the use of personal and corporate identification technologies to check information of legal representatives of enterprises when a business registration license is granted.

For measures to combat e-invoice fraudulence by means of selling e-invoices on cyber platforms, the tax industry also adopted consistent solutions such as tightening information review of illegal e-invoice selling on cyber platforms (e.g. Facebook, website and Zalo). On that basis, local tax authorities collected information on organizations and individuals that illegally sell e-invoices in their responsible areas to trace the origin of e-invoices for sale (including name, tax code, address and telephone number). If they are found to have broken tax and invoice laws, they will be promptly handled or handed over to the police for settlement by law.

The General Department of Taxation is asking the Department of Cybersecurity and High-Tech Crime Prevention and Control under the Ministry of Public Security (A05) to take measures to inspect entities publicly offering to sell invoices on online platforms. Strict measures will be taken against violators.

Currently, the department is proposing the Ministry of Information and Communications direct the Department of Radio, Television and Electronic Information and relevant units to coordinate with tax agencies to circumvent and promptly handle falsified information in cyberspace.

By Hien Kien, Vietnam Business Forum