August 15, 2020 09:48

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Tax sector prevents fraud from VAT refund

20:19 | 29/07/2020

VCN- The General Department of Taxation will focus on the inspection and examinationof VAT refunds for enterprises manufacturing and exporting wooden products, finished wood products and electronic components and computers.

tax sector prevents fraud from vat refund Tax sector performs task of budget collection
tax sector prevents fraud from vat refund Tax sector collects more than VND 12.3 thousand billion of tax debt by end of May
tax sector prevents fraud from vat refund Tax sector receives more than 126 applications for tax payment extension
tax sector prevents fraud from vat refund
The VAT refund dossiers of many enterprises are not consistent with regulations. Photo:T.L

Some typical violations

According to the General Department of Taxation, in recent times, many enterprises have abused the State's support policy in VAT refunds to make VAT refund dossiers that are inconsistent with regulations, causing difficulties for management and causingState revenue losses.

Through inspection and examination of VAT refunds, tax and police authorities coordinated to investigate and detect many violations for tax evasion and dispossession of VAT refunds.

For example, prosecuting Junma Phu Tho Co., Ltd on May 15 for acts of buying and selling invoices and disposingassets or the case of prosecuting four companies in Ha Noi, including Europa Ha NoiCo.,Ltd , An Khanh  Import and Export and Trading Co.,Ltd , Minh Hai Import and Export and Trading Co.,Ltd and Gia Bao Import and Export and Trading Co.,Ltd for illegally buying and selling  invoices.

Through tax refund violations, the General Department of Taxation summarised some typical cases of dispossession cases such as businesses which only import and export consumer likeelectronic components, computers, coffee, noodles andclothes,  and do not trade goods sold domestically,  apply for VAT  refunds due to export; enterprises trading and exporting agricultural, forestry and fishery products using invoices of businesses based in localities with no raw materials; companies making blank documents and dossiers for tax refund, without warehouses and means of transport, purchased goods, buy invoices of vacated enterprises; individuals who are in the same family establishing many bogus firmsto conduct circular transactions to avoidtaxes and gain tax refunds fromthe state.

Notably, the General Department of Taxation also pointed out some enterprises trading in forestry products apply for VAT refunds but they have signs of risks such as the volume of wood purchased from enterprises based in areas with few wood materials and from enterprises having low equity but the volume of peeled timber selling to enterprises subject to VAT refund is large.

The General Department of Taxation also said some businesses dealing in identical or similar electronic components and computers when importing the value is declared with low and when exporting the value is declared high.  This has a potential risk of buying and selling invoices inland to increase the value of exported goods to illegally remit and dispossess VAT refunds.

Inspect enterprises related to wood and electronic components

To promptly prevent violations ofVAT refund, the General Department of Taxation has requested provincial and municipal tax departments review, classify risks, and focus on inspection and examination after tax refunds within ayear for high risk tax refund decisions. 

In addition, the General Department of Taxation has asked tax departments to conduct inspection and examination in combination with VAT refund checks for enterprises athigh risk of VAT refund. During the inspection and examination of VAT refund, if identifying complexcases with high tax risks, they must conduct in-depth evaluations and inspections according to regulations of the Ministry of Finance and the General Department of Taxation.

Tax departments must report to the General Department of Taxation to promptly exchange with tax authorities of relevant countries on enterprises signing export contracts with enterprises subject to VAT refunds to identify payment accounts and related information.

At the same time, work with tax authorities at all levels to inspect, verify and check bought and sold goods; inspect units buying and selling goods with enterprises at risk of VAT refund.

The General Department of Taxation also requests tax departments coordinate with Customs authorities to identify origin of goods and import declaration, randomly inspect export shipments of enterprises subject to VAT refund and transportation of goods; coordinate with police to verify arising economic transactions andcoordinate with banks to identify payments.

The General Department of Taxation notedthat if detecting companies showing signs of tax law violations, tax departments must collect and complete legal documents to transfer the information and violation signs to Customs authorities.

The tax department will develop a special plan on inspection and examination for enterprises manufacturing and exporting wood products, finished wood products andexporters of electronic components and computers.

By Thuy Linh/Ngoc Loan