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Official Gazette

Friday, November 16, 2018

Draft law grants more rights to taxpayers

Updated: 16:30’ - 03/09/2018
Taxpayers would be compensated for damage caused by tax administration agencies or their staff.

Additionally, taxpayers would  neither be handled for tax-related violations nor face late-payment interests in case their violations stem from implementation of requirements of tax administration agencies.

Taxpayers carry out tax finalization procedures at Hanoi Tax Department__Photo: Hoang Hung/VNA

These new provisions are proposed by the Ministry of Finance in a draft law revising the Law on Tax Administration, which is designed to create the most favorable conditions for taxpayers and increase effectiveness of tax administration.

The draft  states that taxpayers would be provided with information and documents serving performance of tax obligations and exercise of tax-related rights. Additionally, tax administration agencies would inform taxpayers of the time period for settlement of tax refund dossiers, refundable tax amounts, non-refundable tax amounts as well as legal grounds thereof.

Taxpayers may choose to use e-documents in transactions with tax administration agencies and relevant agencies and organizations. However, when selling goods or providing services to customers, businesses would be required to use e-invoices instead of paper invoices.

Another noteworthy content of the draft law is the introduction of basic principles on management of transactions among related parties which are designed to prevent transfer pricing.

Accordingly, businesses that have transactions with related parties would have to provide tax agencies with dossiers and information relating to such transactions. However, for small-scale and low-risk taxpayers, a simplified mechanism for price declaration and determination would be applied. In addition, tax agencies would exchange information with their foreign counterparts in order to better manage transactions between Vietnam-based companies and their overseas related parties.

Regarding finalization of personal income tax, the draft law stipulates that individuals who receive income from only one source would have their payable personal income tax amount withheld at source and may authorize income payers to conduct tax finalization on their behalf. Meanwhile, those earning income from two or more sources would have to conduct tax finalization directly with tax offices.

The draft law also extends the time limit for individual taxpayers to conduct tax finalization to 120 days from the end of the calendar year, a 30-day increase compared to the time limit applicable to institutional taxpayers.

The draft law is expected for submission to the National Assembly for comment at its year-end session this October. If everything goes well, the amended Law on Tax Administration will come into force on January 1, 2020.- (VLLF)
 

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