4 LEVELS OF TAX LAW COMPLIANCE OF TAXPAYERS
This is a new content specified in the Ministry of Finance’s Circular No. 31/2021/TT-BTC dated May 17, 2021 prescribing the application of risk management in tax administration.
According to this Circular, taxpayers are assessed and classified in to one of four levels of tax law compliance (instead of three levels as defined in previous regulations): High compliance; Medium compliance; Low compliance and Non-compliance. Management measures according to regulations shall be applied to taxpayers falling into the level of non-compliance. For taxpayers at levels of high, medium, low compliance and non-compliance, analysis the nature of the behavior to identify measures to improve the compliance is required.
Measures for improvement of tax law compliance of taxpayers includes: Record taxpayers complying the tax laws in the list to consider and select for commendation; For cases subject to improvement of compliance, organize programs to meet taxpayers, dialogue conferences, seminars and training in order to help taxpayers properly and fully fulfill their tax obligations, research to amend policies, simplify administrative procedures, etc.
In addition, taxpayers shall be subject to sentinel supervision if showing one of the following signs: They conduct via-bank transactions showing suspicious signs; They or their lawful representatives are accused in criminal cases for acts of violations in taxation, invoices and documents; They show signs of high tax risks in key issues or subject to tax administration supervision through information collected by the tax agencies’ management work; They are collected as prescribed and they fail to explain or supplement information or provide explanations or additional information but fail to meet the requirements and time limit stated in the written notices of the tax agency.
This Circular takes effect on July 02, 2021.
