Công văn 2838/TCT-KTNB

To: Tax Departments of provinces and centrally-affiliated cities.

Tax authorities have recently focused on reforming tax administrative procedures and the Law on Tax Administration that stipulates that taxpayers should personally declare, pay and be held liable in law, and enterprises are entitled to issue invoices for use in production and business activities. Previously, the General Department of Taxation issued a number of Official Letters on strengthening measures to prevent, detect and sanction offences against law on management and use of invoices; strengthening examination and inspection to identify taxpayers showing signs of being prone to commit acts related to the management and use of invoices as follows: Official Dispatch No. 2928/TCT-TTKT dated July 22, 2020 on the inspection and examination of VAT refunds; Official Dispatch No. 3928/TCT-TTKT dated September 18, 2020 on strengthening tax authorities' measures to prevent, detect and sanction offences against law on management and use of invoices.

Despite this, some businesses keep on exploiting the openness of mechanisms and policies to use illegal invoices and illegally use invoices to buy and sell illegal invoices to make illicit gains like in the case where 13 businesses in Thanh Hoa province were established by 8 perpetrators to sell VAT invoices for illicit gains. Therefore, in order to promptly prevent the establishment of businesses with the intention of  buying and selling illegal invoices, using illegal invoices to make illicit gains, resulting in any loss of state budget collections, the General Department of Taxation herein requests Tax Departments of provinces and centrally-run cities to implement and strengthen the implementation of a number of the following measures:

I. Tax Departments and Subdepartments should regularly order their specialized subordinate units (e.g. divisions, teams) to perform the following tasks:

1. Strengthening propaganda activities to support and guide taxpayers to comply with the Law on Tax Administration, strictly abide by the regulations on the use of invoices in their production and business activities. Promoting the identification of purchase and sale of illegal invoices and sanctions corresponding to acts so that taxpayers are given updated information and avoid participating in invoice trades; cooperating with communications units to release information about businesses that commit acts of buying and selling invoices to hold them up as bad examples to contribute to "awaken" those who have been scheming to violate laws on invoices.

2. Directing all Inspection Divisions and district-level Tax Subdepartments to closely and promptly review and supervise enterprises posing high risks of printing, issuing, trading and using illegal invoices as follows:

- Collecting information and data about organizations, individuals and businesses (collectively referred to as taxpayers) currently managed by Tax Departments, Subdepartments and information on taxpayers from other agencies, including information about suspicious transactions from banking supervisory authorities; Information from other state regulatory authorities (e.g. Government Inspectorate, State Audit, other agencies...), letters of accusation, media, etc.

- Identifying businesses that show signs of posing risks in printing, issuing, using, selling and buying illegal invoices; having insight into conducts and schemes of taxpayers using, buying and selling invoices illegally according to the instructions given in the Official Dispatch No. 2928/TCT-TTKT dated July 22, 2020 of the General Department of Taxation on tax refund inspection and examination activities. Concurrently, identifying suspicious conducts and schemes of taxpayers buying, selling and using invoices, such as businesses that have issued invoices in large quantities but have been temporarily closed; or businesses that have given notices of abandonment of their business addresses, but then apply for their business resumption, having large fluctuations in sales, using many invoices without incurring tax payables or with tax payables that are not commensurate with their sales; businesses that report their use of invoices but use none of invoices or issue abnormally large number of invoices.

- Compiling a list of taxpayers who pose risks of printing, issuing, using or trading illegal invoices (sometimes called taxpayers prone to commit acts related to invoices); Reviewing and analyzing collected data on taxpayers to identify and list taxpayers prone to commit acts related to invoices. Analyzing risks to identify taxpayers prone to commit acts related to invoices.

- Closely supervising taxpayers prone to commit acts related to invoices.

3. Specialized divisions of tax authorities must verify the active status of taxpayers at the addresses registered with tax authorities within their remit in accordance with regulations. Working closely with each other to promptly and fully provide updated information on taxpayers who are not active at the registered address to publicly announce information about businesses that have issued invoices but then absconded or temporarily stopped their business, enterprises illegally using invoices on tax websites and mass media to prevent offences against tax legislation and acts of illegally trading invoices. Reviewing and evaluating businesses posing high invoice-related risks to carry out appropriate and focused inspection and examination activities.

4. Following the instructions given in the Official Dispatch No. 3928/TCT-TTKT dated September 18, 2020 of the General Department of Taxation on tax authorities’ close conjunction with relevant authorities, and paying regular attention to directing tax authorities and their specialized subordinate units to cooperate with police agencies according to the Regulations No. 1527/QCPH-TCT-TCCS dated October 31, 2007 agreed between the General Department of Taxation and the General Department of Police.

Strictly sanctioning offences, proactively cooperating with police agencies in conducting investigation into or transfer of files related to these offences according to regulations with regard to the taxpayers who use illegal invoices and illegally use invoices to promptly take preventive measures to avoid any damage to the state budget.

II. Strengthening the management of officers, propaganda and communication activities, and raising the awareness amongst officers, civil servants and public employees to prevent risks

1. Strictly complying with administrative rules and regulations during the process of performing assigned tasks and official duties of officers, civil servants and public employees, and upholding the responsibilities of the heads of agencies and units for implementation of administrative rules and regulations. Directing local specialized divisions and Tax Subdepartments to strictly implement the Directive No. 01/CT-TCT dated September 19, 2019 of the General Director of Taxation on reinforcing rules and regulations, and responsibility for setting good examples of officers and civil servants holding leadership positions, party members at tax authorities at all levels; the Official Letter No. 2717/TCT-TCCB dated July 2, 2020 on implementation of the Directive No. 04/CT-BTC dated June 3, 2020 of the Ministry of Finance and the Official Letter No. 1199/TCT-KTNB dated March 23, 2020 on correcting rules and regulations on official duties applied to civil servants and public employees in the entire tax sector.

2. Providing officers and civil servants engaged in inspection and examination activities with more professional training and refresher courses to ensure that they have sufficient capacity to inspect and detect enterprises showing signs of issuing and using fictitious evidence when buying and selling input materials and goods.

3. Strengthening the inspection and supervision of civil servants and public employees while they are on duty, especially those who regularly contact taxpayers or carry out inspection and examination activities to prevent them from committing any act of harassment, pestering or obstruction while on duty. Assigning public officers who have competency, professionally qualification, good ethics, and are capable of taking on the tasks of inspection and examination.

4. Showing absolute determination to strictly sanction violating officers, resolutely dismiss those who display professional incompetence, incapacity and lack a sense of responsibility, violate 10 disciplinary rules for tax officers and civil servants according to the provisions of Decision No. 1036/QD-TCT dated June 11, 2013 of the General Director of Taxation.

At the same time, strictly implementing the Decision No. 67/QD-TCT dated January 11, 2013 of the General Department of Taxation, stipulating the standards to be "upheld" and the things to be "eliminated" for tax officials and civil servants; Decision No. 2181/QD-TCT dated December 27, 2012 of the General Department of Taxation, stipulating standards of office culture and ethics of tax officials and civil servants. Focusing on provision of training and refresher courses to improve the quality of human resources, the ethical qualities of civil servants and public employees, prioritizing provision of training for civil servants working in departments that regularly interact with taxpayers and carrying out inspection and examination activities in order to prevent and minimize risks and consequences while they are on duty.

5. Reporting to the General Department of Taxation on difficult or complicated cases so that timely directions are given.

The General Department of Taxation is requesting Departments of Taxation of provinces and centrally-affiliated cities to comply./.