Tax Authorities, Banks Strengthen Coordination in Tax Loss Management

The General Department of Taxation (GDT) recently issued Document 2535/TCT-TTKT to direct the Corporate Tax Department and tax departments of centrally governed provinces and cities to coordinate with commercial banks, other credit institutions and payment intermediary service providers to strengthen tax administration.

To promptly implement consistent tax management solutions, GDT requested commercial banks and other credit institutions to provide transaction information via accounts, account balances and transaction data at the request of directors of tax departments for inspection, examination and determination of payable tax obligations and take measures to enforce the implementation of administrative decisions on tax administration in accordance with the law within 10 working days from the date of receipt of a written request from tax authorities.

Where commercial banks and other credit institutions do not provide data at the request of tax authorities, they will be administratively sanctioned as prescribed in Article 19 of Decree 125/2020/ND-CP of the Government dated October 19, 2020 on penalties on administrative violations of tax and invoice.

Upon request for information, tax departments shall send documents to the head offices of commercial banks and other credit institutions. The requested content should be complete and detailed with identification information and content for commercial banks and other credit institutions to execute.

For complicated and important matters, tax authorities should meet commercial banks and other credit institutions or coordinate and work with tax departments that directly manage those commercial banks and credit institutions in accordance with the law.

Tax departments that directly manage commercial banks and other credit institutions are responsible for coordinating with tax authorities upon official request. On the contrary, tax departments are responsible for keeping information confidential, using information for the right purposes and taking full responsibility for information safety in accordance with the Law on Tax Administration and other relevant laws.

Regarding tax declaration, deduction and payment on behalf of others and monitoring money transferred to overseas suppliers who do not have permanent establishments in Vietnam and conduct e-commerce or digital business with organizations and individuals in Vietnam (collectively called foreign suppliers), the General Department of Taxation proposed commercial banks, other credit institutions and intermediary payment service providers shall be made to declare, deduct and pay financial obligations on behalf of others and monitor the amount of money transferred to overseas suppliers in strict accordance with Article 81 of Circular 80/2021/TT-BTC dated September 29, 2021 of the Ministry of Finance.

In case commercial banks, other credit institutions and payment service providers do not perform payment, they will be handled as per Clause 1, Article 144 of the Law on Tax Administration 38/2019/QH14 dated June 13, 2019.

The Corporate Tax Department is responsible for notifying the name and website address of the overseas supplier that has not yet registered, declared and paid tax but the goods or service buyer has made transactions to head offices of commercial banks, other credit institutions and payment intermediary service providers. At the same time, the department coordinated with commercial banks, other credit institutions and intermediary payment service providers to implement Article 81 of Circular No. 80/2021/TT-BTC.

If they confront difficulty in carrying out payment deductions on behalf of foreign suppliers in Vietnam, commercial banks, other credit institutions and intermediary payment service providers shall report the case to the department for consideration and settlement.

By Kien Hien, Vietnam Business Forum