July 12, 2020 08:01

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Tax Administration Law 2019: Open policy, improved awareness of taxpayers

16:17 | 07/09/2019

VCN - On July 1, 2020, the Law on Tax Administration 2019 will officially come into force. With these innovations and reforms, the law is expected to help tax authorities combat tax losses as well as raise the awareness of taxpayers' compliance, creating a transparent and equal business environment.

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Professional operations at Dien Bien Tax Department. Photo: Thuy Linh.

Optimize tax administration

After beginning to receive comments officially from July 2018, and after 10 sessions of correcting and changing content, the Tax Administration Law 2019 has been passed by the National Assembly and will officially take effect from July, 2020.

Compared to the Tax Administration Law 2006, the new Tax Administration Law has been adapted to suit the current situation. According to the Department of Policy, the General Department of Taxation, the law has been amended to cover the management of taxes and other revenues of the State budget. Amending the provisions of the Tax Administration Law 2019 will create a legal basis for modern tax administration, to meet international standards and practices, create favorable conditions for taxpayers, ensure legal rights and interests of taxpayers; clearly defining tasks and powers of tax administration agencies as well as concerned agencies, organizations and individuals in tax administration.

In addition, the Tax Administration Law 2019 also amends and supplements regulations to meet the requirements of administrative reforms including tax procedures towards unified, public, transparent and simple management, easy implementation and examination, as well as creating a legal basis to improve the efficiency of tax administration to prevent tax evasion, losses and arrears regulated in all stages of tax administration: from tax declaration, calculation, payment and refund to tax debt management, inspection and examination.

According to the judgment of lawyer Ha Huy Phong, Director of Inteco Law Company, the three main points of the Tax Administration Law 2019 are changing the position of the taxpayer with the tax authority, leading to changes in attitude and manner of service; changing the coordination method between tax authorities and other agencies in tax administration and tax collection; and changing transfer pricing, leading to more effectiveness in preventing budget losses from FDI enterprises as well as creating a level playing field between domestic and foreign enterprises.

"The new Tax Administration Law is the law to optimize tax administration and State budget revenue. These new points will positively effect tax administration, creating a foundation and legal basis for the issuance of many new regulations after the new law takes effect,” said Ha Huy Phong.

Responsibility belongs to many parties

According to the Department of Policy, the Law on Tax Administration 2019 will have five Decrees and eight Circulars and drafting agencies set the completion roadmap in 2020.

Discussing this issue, Ms. Nguyen Thi Cuc, Chairman of the Vietnam Tax Consulting Association, said that the new law's provisions related to some ministries and branches, so that in order to be realised, guiding documents must be specific, clear and transparent, avoiding different interpretations.

"For the quality of the decree and circular, State agencies need to collect comments from the business community and professional associations to implement the law most effectively.

"With the responsibility of the State management agency in guiding, propagating and bringing the law to life, there is the responsibility of the business community. Because if taxpayers don't comply, the law can't be realised. The responsibility belongs to both sides, when the State policy is open, the compliance sense of taxpayers must also be raised,” Ms. Nguyen Thi Cuc said.

Many enterprises also expect that enterprises will enjoy a more transparent, positive and fair atmosphere with the new changes of the Law on Tax Administration 2019, which improves their competitiveness and optimizes profits, returns value for investors, shareholders, and employees.

"At present, the tax administration method of the Taxation office is quite tight and transparent with the application of electronic tax declaration, payment and refund. However, in the period of strong technology development, extensive economic integration, the management agency ‘elevates’ management with new tools such as the Tax Administration Law 2019 regulates: Applying electronic invoices, strict management of e-commerce tax and adding tools for anti-transfer pricing. Which will improve management efficiency, create a transparent business environment for enterprises, helping enterprises keep their mind on development,” said Dang Hong Thai, Director of Co., Ltd. Vsteel steel structure.

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Many experts expect that with the administrative reform efforts of the Taxation office, the new Tax Administration Law will be a lever to reduce the time taken for tax procedures by for enterprises, thereby, the tax payment index of Vietnam under the World Bank's Business Environment Report has been increasingly improved, being well-matched with the ASEAN 4 group.

The Tax Administration Law 2019 will have 5 guiding Decrees, namely: The Decree on detailing some articles of the Tax Administration Law; Decree on amending and supplementing a number of articles of the Government's Decree No. 20/2017/ND-CP dated February 24, 2017, providing for tax administration of associated transactions; Decree on amending and supplementing a number of articles of the Government's Decree No. 119/2018/ND-CP dated September 12, 2018, providing for electronic invoices when selling goods and providing services; Decree on sanctioning of administrative violations in the field of Tax and invoices; The Decree on sanctioning of of administrative violations in the field of Customs.

There will be 8 Circulars providing guidance as follows: The Circular on detailed guidance on some articles of the Law on Tax Administration; Circular on guiding tax registration; Circular on guiding the application of prior agreement on the method of determining taxable prices in tax administration - APA; Circular on guiding tax administration for business households and business individuals; Circular on guiding electronic transactions in the field of Tax; Circular on guiding risk management in tax administration; Circular on guiding electronic stamps; Circular on guiding services of tax procedures (tax agents).

By Thuy Linh/ Binh Minh