Risk signs on invoices and VAT refund fraud issued by the General Department of Taxation

Dear: Tax Departments of provinces and centrally run cities.

Over the past time, the General Department of Taxation has issued instructions on strengthening tax administration, managing invoices, strengthening inspection and examination for businesses with high tax risks, and combating complete fraud. value added tax (VAT), tax evasion. Accordingly, the local Tax Office has contributed to effectively preventing and overcoming frauds in VAT refund, tax evasion, raising awareness of tax law observance, and at the same time contributing to creating a favorable environment. fair and healthy business school. However, at present, the investigating agencies still continue to detect and dismantle a number of lines to set up companies to illegally buy and sell VAT invoices, in order to appropriate tax money from the state budget.

In order to promptly detect, prevent and strictly handle cases of trading in invoices to gain illicit profits, the General Department of Taxation proposes that tax offices at all levels, based on current regulations, continue to implement solutions. According to the instructions in the documents: Official Letter No. 3928/TCT-TTKT dated September 18, 09 on strengthening the tax authorities' solutions to prevent, detect and handle violations of the law. on management and use of invoices; Official Dispatch No. 2020/TCT-KTNB dated July 2838, 28 on rectification, inspection, review, and measures to prevent and deal with taxpayers at risk of acts of buying, selling and using real invoices legal…

In addition, the following specific measures should be synchronously implemented:

1. Tax authorities at all levels shall organize the implementation, dissemination, implementation, review, assessment and exchange of experiences on signs and violations in invoice management: Issuing, using illegal use, purchase and sale of invoices. At the same time, the organization reviews, evaluates and classifies businesses with signs of invoice risk through questionable signs. In case of high tax risk, the tax authority shall request clarification. When the suspected risk basis is proven, it will be put into key supervision inspection, but if there is not enough evidence to prove the risk, then organize tax inspection and examination in combination with checking invoices immediately.

(Some signs and violations are listed in the Appendix attached to the official dispatch).

2. In the inspection and examination, it is necessary to perform tasks such as: Verifying documents and invoices of the origin of purchased goods to the final stage (when there are signs of issuing invoices around); Check the actual warehouse, information on delivery and receipt of goods each time of shipment; Inspect and verify purchased goods in case taxpayers have inputs purchased from enterprises operating in localities where such raw materials and goods are not available; Compare the conformity between the goods and services of the purchase invoice and the corresponding sale invoice; Compare the vouchers of payment for goods purchase and sale accounted for at the enterprise with the actual documents arising at the bank that the taxpayer transacts in order to detect round-trip money transfers, suspicious transactions through the bank, and conduct verification. verify bank transactions (bank statements) and coordinate with local authorities to immediately verify any outstanding problems of the business.

For invoices serving the deduction and refund of VAT, through inspection and examination, if detecting that taxpayers have used direct inputs of enterprises, there are signs of illegal invoice trading but no results have been obtained. Official comments of the tax authority or the competent authority: The tax authority shall notify the enterprise in writing in order to declare and adjust VAT and adjust the tax refund dossier. If the enterprise still affirms that the purchase and sale of goods attached to the input VAT invoice is real and in accordance with regulations, the enterprise must commit to take responsibility before law for its tax declaration and refund dossier. At the same time, the tax authority managing the enterprise must coordinate with the tax authority directly managing the enterprise showing signs of illegal purchase and sale of invoices to check the tax return of this enterprise in order to verify and conclude violations of enterprises related to invoices (if any).

3. Tax authorities at all levels, when receiving a request for verification of invoices, origin of goods, transportation, etc., must coordinate in verification and return verification results within 10 working days from the date of receipt. If you receive a request for verification, in complicated cases, the time to return the results is no more than 30 working days, in this regard, during the implementation process, if no coordination is received or the coordination is not timely. of other Tax Departments, request the Tax Department to report immediately to the General Department of Taxation for timely handling measures.

For the verifying unit and the units related to the unit requested to be verified, it is recommended that the Tax Departments review and consider as a warning information about enterprises showing signs of risk in their respective jurisdictions. tax managers to develop a plan for key monitoring and control.

4. Tax Departments, based on local management practices, conduct assessments of areas with signs of high tax risk, and promptly report to the People's Committees of provinces and cities and the Steering Committees against loss of state budget revenue. provinces and cities to direct relevant agencies to coordinate with tax authorities in the fight against loss of revenue for the state budget. At the same time, advise the People's Committees of provinces and cities to direct departments, boards and branches to strengthen coordination to improve the efficiency of State management in tax work such as: exchanging information of enterprises between information systems. national information on business registration and tax information system, well perform business registration, review information about newly established enterprises, well implement the one-stop-shop mechanism, timely transmit information timely, accurate and complete in order to prevent loss of state budget revenue (Department of Planning and Investment); information on the origin of goods on the market to detect cases where organizations and individuals trading in floating goods, without origin, do not keep accounting books so as not to declare tax (Department of Industry and Trade). Love);…

5. Enhance the exchange of skills through actual assessment of businesses showing signs of invoice risk, purchase and sale of invoices in each tax authority and tax authorities at all levels, and at the same time propagate the identification of behavior buying and selling, using illegal invoices and handling sanctions for each act so that taxpayers know and avoid participating in invoice trading transactions; coordinate with communication units to publicize information about businesses that have acts of buying and selling invoices to set an example and contribute to "warning" those who have been intending to violate the law on buying and selling goods. single. When the tax authority has a notice about the enterprise having invoice risks, the leaders of the local tax agencies are requested to actively coordinate in checking and handling.

6. Strengthen training, retraining and professional improvement for the contingent of cadres and civil servants engaged in inspection and examination to ensure sufficient capacity to inspect, detect and handle enterprises with signs of buying, selling, using illegal invoices.

7. Strengthen the inspection and supervision of civil servants and public employees in the performance of their official duties, especially civil servants who are in regular contact with taxpayers and public servants engaged in inspection and examination. Resolutely handle strictly wrongful civil servants, resolutely remove from the system civil servants and public employees who are weak in capacity, qualifications, lack of awareness and responsibility, loose management, violate 10 Articles Disciplinary action against tax officials and employees according to the provisions of Decision No. 1036/QD-TCT dated June 11, 6 of the Director General of the General Department of Taxation.

8. Strengthen coordination with police agencies according to Joint Circular No. 85/2016/TTLT-BTC-BCA dated June 20, 6 of the Ministry of Finance - Ministry of Public Security in verifying the origin of goods , verify the buyer and seller from the beginning to the end; Dossiers and documents transferred to the police agency must ensure the legality, clearly identify the signs, forms and tricks of illegal printing, issuance and use of invoices to evade taxes or show signs of purchase. selling invoices of organizations, individuals and businesses; Closely coordinate the provision of information and documents at the request of the police agency during the investigation, handling and update of investigation results, in order to speed up the progress and soon investigate conclusions and recommendations. prosecute and handle according to the provisions of law and update the handling results in a timely manner. Promulgating and amending coordination documents to be consistent with current regulations.

9. Strengthen coordination with banks to verify the payment via bank, suspicious transactions according to Decision No. 1796/QD-BTC dated September 11, 9 of the Minister of Finance on amendments and supplements. supplementing a number of Articles of the Regulation on handling information of organizations and individuals with suspicious transactions at tax authorities at all levels in Decision No. 2017/QD-BTC dated March 568, 26 of the Minister of Finance.

10. Strengthen coordination with Customs to promptly exchange and provide information according to Decision No. 2413/QD-BTC dated November 23, 11 of the Minister of Finance on promulgating the Regulation on exchange Information between Customs and Tax authorities: Verification of the origin of goods, import declarations, export declarations, irregular inspection of export shipments of tax refund enterprises, etc.

The General Department of Taxation shall notify the Tax Departments and implement them. If problems and difficulties arise during the implementation, the Tax Department is requested to report to the General Department of Taxation for consideration and timely settlement./.

APPENDIX

ABOUT SIGNS OF VIOLATIONS
(Attached to Official Letter No. 1873/TCT-TTKT dated June 01, 6 on strengthening the review and detection of taxpayers with signs of risk on invoices, combating VAT refund fraud).

– The enterprise changes its legal representative 2 or more times within 12 months, or changes its legal representative and moves its business location;

– The enterprise has the number of times of change of operation status or the number of times of business change from 2 times a year.

– Newly established business with a fixed business location (changing business locations many times in 1-2 years of operation).

– The enterprise moves its business location after receiving a Notice of Inactivity at the registered address.

– Enterprises established by individuals with family relationships contributing capital such as wives, husbands, brothers, sisters, etc.

– Newly established enterprises by the person in the name of the director or legal representative, whose company has been notified by the tax authority to give up its business address (tax arrears), and to suspend business operations for a definite time.

– Enterprises established for many years without generating revenue, then resell or transfer to others.

- Enterprises established without a license for mining activities but produce invoices for natural resources and minerals.

- The enterprise has goods sold or purchased that are not suitable for the conditions and characteristics of each region.

- The enterprise has not fully paid the charter capital as registered;

- Mergers and acquisitions with a value of less than VND 100 million;

- Supermarket businesses (retail of consumer goods, electrical appliances); catering business, restaurant, hotel; transport business; Building materials business; petroleum business; doing business in the field of mining soil, stone, sand and gravel; trading in minerals (coal, kaolin, iron ore...); trading in agro-forestry products (wood chips, planks, logs,...); There is a labor hire industry (large occurrence).

- Sudden increase in revenue, specifically: The revenue in the pre-declaration period is very low, approximately zero, but the following period has a sudden increase in revenue or there is a sudden increase in revenue of the following period (from 0 times or more compared to the average revenue). amount of previous periods) but the amount of value added tax (VAT) payable is low (VAT payable < 3% of turnover incurred in the period);

– Large revenue but warehouse is not commensurate or there is no warehouse, no warehouse rental costs;

– The annual declared revenue is over 10 billion VND but the amount of tax payable is less than 100 million VND (1 %);

– Enterprises use invoices in large quantities (from 500 to 2000 invoice numbers). The number of deleted invoices is large, accounting for about 20% of the used invoices on average.

– Enterprises using e-invoices according to Decree No. 123/2020/ND-CP, Circular No. 78/2021/TT-BTC have abnormally reduced number of e-invoices compared to the number of used invoices. according to Decree No. 51/2010/ND-CP.

– Enterprises do not have notice of invoice issuance or notice of issuance but no report on invoice usage (or delay in reporting).

- Enterprises have the value of goods sold, output VAT equal to or very small difference compared to the value of purchased goods, input VAT.

- Enterprises have goods and services sold that are not suitable for purchased goods and services;

– The enterprise has a large input and output VAT but does not incur a payable tax amount and has a negative VAT number for many periods.

– The enterprise has no fixed assets or the value of fixed assets is very low;

– The business has a suspicious transaction through the bank (money in and out within the same day);

– The enterprise employs workers that are not commensurate with the size and lines of operation;

– An individual in his name (the legal representative) establishes and operates many enterprises.