Key Insights of the Inspection Plan
- Enterprises issuing stock dividends and stock awards, and enterprises being classified as high-risk in invoice issuance, are the new focuses in the tax audit directive (Inspection Plan) for 2025.
- Besides the tax and invoicing regulations, noncompliance with other specialized regulations could subject enterprises to potential tax exposures.
- The competent authorities are increasing their focus on enterprises’ compliance with compulsory insurances.
Notable Points
On 23 October 2024, the Government Inspectorate of Vietnam (GIV) issued the Official Dispatch No. 2220/TTCP-KHTH on the directive of the inspection plan for 2025 (Dispatch 2220).[1]
In particular, the General Department of Taxation (an agency under the control of the Ministry of Finance) is assigned to conduct the inspection and examination focusing on enterprises falling into 10 cases as follows:
- High-risk sectors or sectors with high potential for tax collection: oil and gas, banking, insurance, securities, pharmaceutical, real estate, processing and trading of jewelry made from gold, silver and precious stones, marketing, e-commerce, etc.
- Large enterprises that have not been subject to the tax audit for many years.
- Enterprises having transfers of capital, trademark, investment projects.
- Enterprises issuing stock dividends, stock awards.
- Enterprises having many related party transactions or business losses in many years, or profits that are not at arm’s length.
- Enterprises that are at high risk in invoices.
- Enterprises having signs of fraud and risks in their tax refund.
- Enterprises entitled to tax incentives.
- Enterprises claiming tax treaty benefits.
- Enterprises having suspicious transactions as provided by the Inspection Agency, Banking Supervision or Customs Departments.
Besides the tax audit, the GIV also assigns ministries and other ministry-level agencies to conduct specialized inspections to ensure compliance with the specialized legislations. There are notable points that we would like to bring to your attentions, as follows:
- The Department of the Insurance Supervisory Authority is recommended to focus on certain issues in the insurance industry, including payment capacity, statutory provisions, agency activities, insurance policy compliance, insurance brokers, etc.
- Vietnam Social Security (VSS) is assigned to conduct specialized inspections at organizations that have signs of not properly participating in social insurance contributions.
- Other relevant sectors/industries: multi-level business, e-commerce, agribusiness, financial institutions, employment and compulsory insurance fields, etc.
What Does It Mean for Your Company?
- Review stock dividends and stock awards/VAT invoice declarations and prepare sufficient supporting documents to secure your position during a tax audit.
- Besides the VAT invoice issuance, companies should also consider the input VAT invoices and locate supporting documents to justify that the transactions incur or happen.
- Increase your attention to the compulsory insurance contributions and prepare for the upcoming inspection conducted by the VSS.
How Can A&M Help?
At A&M, we provide extensive support to businesses to prepare for the challenges in the future tax audit. This may include but not be limited to:
- Pre-audit tax health check to identify potential tax issues and how to resolve them.
- Support for the company to implement rectification actions.
- Onsite/offsite supports to deal with the tax auditors’ challenges.
- Post-tax audit supports.
We would be pleased to speak to you if you would like to understand further the impact of Dispatch No. 2220 or any other matters for the upcoming inspections.
[1] https://lawnet.vn/cv/Cong-van-2220-TTCP-KHTH-2024-dinh-huong-Chuong-trinh-thanh-tra-9A235.html.
https://www.alvarezandmarsal.com/insights/new-directives-dispatch-2220-inspection-plan-2025
