Chương I Thông tư 31/2021/TT-BTC: Quy định chung

Chapter I

GENERAL PROVISIONS

Article 1. Scope

This Circular introduces regulations on application of risk management to tax administration by tax authorities at all levels, including:

1. Collection, processing, management and use of information related to taxpayers to serve risk management.

2. Assessment of the compliance with tax laws and classification of taxpayer risks.

3. Application of tax administration measures corresponding to levels of compliance with tax laws and levels of taxpayer risks.

Article 2. Regulated entities

1. Taxpayers.

2. Tax authorities.

3. Tax officials.

4. Relevant regulatory authorities, organizations and individuals as prescribed in Article 2 of the Law on Tax Administration.

Article 3. Definitions

1. “application of risk management to tax administration” means the employment of risk management procedures, rules, measures and/or techniques and results of assessment of compliance with tax laws and levels of taxpayer risks to decide the implementation of tax administration measures.

2. “risk management information” means information about and related to tax which is collected and processed to serve the application of risk management to tax administration.

3. “compliance level” means the classification result of a taxpayer’s compliance with tax laws given by a competent tax authority.

4. “compliance assessment criteria” mean the standards used for assessing taxpayers’ compliance with tax laws.

5. “compliance assessment indicators” mean information criteria with specific values included in compliance assessment criteria.

6. “compliance assessment” means the collection, analysis, verification and comparison of information about business operations and compliance with tax laws with compliance assessment criteria and indicators for classifying taxpayers’ levels of compliance with tax laws.

7. “compliance management” means tax authorities’ compliance assessment, classification of risks, and analysis of taxpayers’ behaviors whereby they will use appropriate resources for management measures for each level in order to encourage the voluntary compliance and prevent non-compliant behaviors.

8. “analysis of taxpayer risk” means the analysis of information about a taxpayer so as to detect signs of violations against tax laws which cause loss of state budget revenues from taxes.

9. “level of risk” means the severity of the risk which is determined based on both frequency and consequence of that risk.

10. “risk classification criteria” mean the standards used for assessing and determining the levels of risks in tax administration.

11. “risk classification indicators” mean information criteria with specific values included in risk classification criteria.

12. “risk assessment” means the classification, consideration and comparison of levels of risks with risk classification indicators and treatment of previous risks in order to determine the order of priority.

13. “signs of risk” mean any information reflecting potential violations against laws.

14. “signs of tax-related violation” mean any information used for identifying violations against tax laws.

15. “emphasized supervision" means tax authorities’ application of professional measures against taxpayers that are assessed to pose high risks or that are non-compliant with tax laws in each business sector and each area in each period.

16. “risk management application” means an information technology application which is used for connecting and receiving information from relevant data sources within and outside tax authorities, and digitalizing risk management measures and techniques based on the issued criteria and indicators so as to carry out the analysis of taxpayer risks, compliance assessment, and determination of levels of risks which are used by tax authorities to decide the implementation of professional measures.

17. “taxpayer segmentation” means tax authorities’ classification of taxpayers into specific groups with the same characteristics to which appropriate management measures are applied.

18. “classification using machine learning” means the conduct of computational and statistical algorithms on computers to determine models, functions and indicators used for classifying and estimating levels of risks.

19. “list-based ranking” means a method employed to assess taxpayers by comparing with criteria and indicators on their business operations and compliance with tax laws, and arranging them into groups corresponding to each rank. Taxpayers shall be ranked according to their satisfaction of criteria, indicators of criteria, and indicators of corresponding ranks.

20. “scoring and score-based classification” means a method employed to assess taxpayers based on scores of criteria and indicators on their business operations and compliance with tax laws.

Article 4. Risk management rules

1. The application of risk management is aimed to ensure the validity and efficiency of tax administration activities; encourage and facilitate taxpayers’ voluntary compliance with regulations and laws on taxation and tax administration as well as prevent, detect and promptly take actions against regulations and laws on taxation and tax administration.

2. Risk management information is collected from information sources within and outside tax authorities (including foreign information sources) in accordance with regulations of law; is mainly managed at the General Department of Taxation through the information technology system and shall be processed, shared and provided for tax authorities at all levels and other regulatory authorities to serve their performance of tax administration tasks in accordance with regulations of law.

3. Assessment and classification of taxpayers’ compliance and risks shall be automatically and periodically carried out adopting one or some of the methods specified herein in accordance with regulations of law, tax administration procedures and measures, and based on the taxpayer segmentation and criteria specified herein and taxpayer database.

4. Based on results of compliance assessment, classification of taxpayer risks, information available on tax administration applications of tax authorities, signs of violations, and other signs of risks available at the decision-making time, tax authorities shall:

a) Issue decisions on tax inspection, audit or supervision, or application of professional measures.

b) Develop plans for comprehensively improving the compliance which are suitable for resources of tax authorities based on results of analysis of nature, causes and incidence of each level of compliance or each level of risk.

5. In case of strict compliance with regulations of law, regulations herein and relevant guidelines on risk management, tax officials are exempt from personal liability in accordance with regulations of law.

6. If the risk management application malfunctions or has not yet met risk management requirements laid down herein, the application of risk management shall be carried out in a manual manner that competent authorities shall consider approving proposals or issuing documents on application of tax administration measures in accordance with the Law on tax administration and its guiding documents.

7. If there are changes in results of compliance assessment and classification of taxpayer risks due to changes in information which are not yet automatically updated on the risk management application, such changes shall be manually updated by tax officials after obtaining approval from competent authorities.

8. Implementation results of professional measures for levels of risks must be fully and accurately updated on tax administration applications of tax authorities or the risk management application on a case-by-case basis so as to serve the improvement and conduct of compliance assessment and classification of taxpayer risks in following periods.

Article 5. Methods for compliance assessment and classification of taxpayer risks

Levels of compliance and taxpayer risks shall be determined adopting one or some of the following methods:

1. Scoring and score-based classification.

2. Machine learning.

3. List-based ranking.

Article 6. Procedures for applying risk management

Tax authorities shall apply risk management to tax administration according to the following procedures:

1. Assess the situation, and determine risk management objectives and requirements

Tax authorities shall review risks and faults of taxpayers during their compliance with provisions in Article 17 of the Law on Tax Administration No. 38/2019/QH14 or regulations in force in order to identify major risks need to be treated as well as high-risk taxpayers and treatment solutions thereof.

2. Organize the collection and processing of risk management information

Risk management information is collected and processed according to regulations in Chapter II hereof.

During the analysis of taxpayer risks, if any information is found to be false or inadequate, taxpayers shall provide explanations or additional information and documents as requested and within the time limit notified by tax authorities to ensure the accurate compliance assessment and classification of taxpayer risks.

3. Establish and update indicators serving the analysis, compliance assessment and classification of taxpayer risks

Based on results of assessment of situations and determination of risk management objectives and requirements as prescribed in Clause 1 of this Article, risk management information and information technology applications, tax authorities shall establish and update indicators and weighing factors used for assessing and classifying the levels of compliance and taxpayer risks.

4. Carry out analysis and compliance assessment; determine levels of taxpayer risks; determine levels of risks from tax administration operations; manage risk records of emphasized supervision cases

Taxpayers are segmented according to conditions which are appropriate for tax administration requirements in each period when carrying out analysis and assessment of compliance and taxpayer risks.

The analysis and classification of compliance and taxpayer risks shall be carried out using the methods specified in Article 5 hereof.

5. Based on results of risk classification and compliance assessment, apply tax administration measures and develop plans for comprehensively improving taxpayers’ compliance.

6. Monitor, update and assess feedbacks on implemented tax administration measures.

7. Collect, process, use and retain information; provide guidance on adjustment of risk management so as to ensure the efficiency of tax administration activities.