Protecting business interests in the enforcement of value added tax laws in Vietnam

In tax administration, the State ensures the harmonious implementation of VAT policy.

Therefore, in order to both generate revenue for the budget and ensure the rights and interests of tax-paying enterprises, the study of legal documents regulating VAT as well as the implementation mechanism of the VAT Law is of great significance in assessing the current situation and solutions to improve VAT law. Based on that, I boldly researched the topic " Protecting the rights of enterprises in the implementation of value added tax law in Vietnam ".

2. Research situation

In recent times, VAT has attracted special attention from legal researchers, so there have been many scientific research works published in the field of tax: research works on VAT, tax management law, VAT law to perfect tax law in our country. Research works mainly focus on research and evaluation based on the perspective of State management to perfect VAT regulations, enhance the effectiveness of the management function of tax authorities. This situation stems from the fact that research on the basis of positive law has not separated the two legal parts: the law regulating the content of VAT and the Tax Management Law. Moreover, the tax management model in Vietnam has just shifted from a specialized management model to a management model mainly based on functions, combining management according to subjects and taxpayers (NNT) placed in the central position in tax law. Therefore, the thesis " Protecting the rights of enterprises in the enforcement of value added tax law in Vietnam " is an independent topic without repetition. The thesis goes into depth to find out the shortcomings, limitations, and proposes solutions to overcome the problem of "protecting the rights of enterprises".

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3. Purpose and reasons for choosing the topic

The issue of protecting the interests of enterprises in the enforcement of VAT law is studied for the following purposes:

- Research theoretical issues on VAT and issues of protecting business interests in VAT law.

- Systematically study the provisions of current laws on VAT and laws protecting the interests of enterprises in VAT laws.

- Practical application of the provisions of the law, thereby finding out the existing problems of VAT law in protecting the interests of enterprises.

- Make recommendations to improve the regulations in the VAT law to more effectively protect the interests of businesses, contributing to increasing the feasibility of the VAT law.

4. Scope of research topic

Protecting the interests of enterprises in the enforcement of VAT law in Vietnam is studied in two scopes:

4.1. About space

The issue of protecting the rights of enterprises in VAT law takes place nationwide, by region and especially in central areas such as: Hanoi, Hai Phong, Ho Chi Minh City... In addition, the thesis studies the situation of protecting the rights of enterprises in VAT law in many developed countries that have paved the way for the VAT Law to be applied globally such as the UK, Korea, Germany, Japan... Thus, we will have a panoramic view of the situation of protecting the rights of enterprises in VAT law according to Vietnamese law.

4.2. About time

Research on the issue of protecting business rights in VAT law according to the 2008 VAT Law, the 2013 Law on Amendments and Supplements to the VAT Law, the 2006 Tax Administration Law and the 2012 Law on Amendments and Supplements to the Tax Administration Law.

5. Research method

The thesis researches on protecting the interests of enterprises in the implementation of VAT law mainly using the following research methods: collecting documents, analyzing documents, synthesizing, comparing, and statistical data. Based on the analysis of theoretical and practical issues in VAT law regulations in Vietnam in protecting the interests of enterprises. The thesis honestly presents the advantages and disadvantages of current law and the interests of enterprises in the implementation of VAT law, thereby making some recommendations to improve VAT law to balance the interests of tax-paying enterprises and the State, maximally protecting the interests of tax-paying enterprises.

6. Structure of the thesis

In addition to the introduction, conclusion and list of references, the content of the thesis includes 2 chapters:

Chapter 1 : Some basic issues on value added tax, value added tax law and business rights in value added tax law.

Chapter 2 : Current status of value added tax law enforcement on business rights and some recommendations for improvement.

Chapter 1

SOME BASIC ISSUES ON VALUE ADDED TAX, VALUE ADDED TAX LAW AND BENEFITS OF

ENTERPRISES IN VALUE ADDED TAX LAW

1.1. BASIC ISSUES ON VALUE ADDED TAX AND VALUE ADDED TAX LAW

1.1.1. Concept and characteristics of value added tax

1.1.1.1. Concept of value added tax

Value Added Tax (VAT) is a tax calculated on the added value of goods and services arising in the process from production, circulation to consumption (hereinafter abbreviated as VAT - Value Added Tax). VAT is an indirect tax that has been applied by many countries to replace sales tax. It is called VAT because the tax is only levied on the added value at each stage of the production and business process, and the total tax collected at each stage is equal to the tax calculated on the selling price to the final consumer. In essence, VAT is paid by manufacturers and businesses on behalf of consumers by including this tax in the selling price that consumers must pay by the tax calculated on the selling price to the final consumer. According to VAT Law No. 13/2008/QH12, VAT is defined as follows: "Value added tax is a tax collected on the added value of goods and services arising in the process from production, circulation to consumption" [29].

1.1.1.2. Characteristics of value added tax

Firstly , VAT has a very wide taxable subject. Every subject existing in society, whether it is an organization or an individual, a poor person or a high-income person, must pay their income to enjoy the results of production and business created for the socio-economy. This means that every subject

All subjects in society are taxable subjects, the actual subjects that have to pay are important to the impact of VAT law on economic and social life. Taxing all subjects within the territory clearly demonstrates the fairness of tax and at the same time demonstrates the state's attitude towards all types of consumption in society [39, p. 149].

Second , VAT is calculated on the added value of goods and services. Taxing only on the added value and not on the entire value of goods and services ensures that the VAT applied at each stage of the circulation process does not cause price fluctuations for consumers. This characteristic of VAT also requires the law to find appropriate and feasible ways and methods to accurately determine the added value as the basis for tax calculation.

Third , if based on the final purchase price of goods and services, the amount of VAT payable does not change depending on the different stages of circulation. Tax is levied at all stages of the production process, domestic circulation of goods, import and import circulation, but the basis for determining the amount of tax payable is only the newly added value of the later stage compared to the previous stage, so if the payment price is considered to be calculated when the consumer enjoys the goods and services as determined in advance and does not change the parts of the value of goods and services that are divided and taxed, the total amount of VAT payable through the stages is the final tax calculated on the total value of goods and services that the consumer must pay. This is both a characteristic and an advantage of VAT compared to the normal goods and services tax that Vietnam and many other countries have applied in the previous period [39, p. 149].

1.1.2. The role of value added tax and value added tax law

1.1.2.1. The role of value added tax

- Overcoming the duplication disadvantage of "Tax on tax" should contribute to encouraging specialization and cooperation to improve productivity and quality.

quality, reduce product costs, suitable for a commodity production economy according to market mechanisms.

- VAT is widely applied to all organizations and individuals who consume products, goods or are provided with services. VAT is only calculated on the added value, not on capital, so VAT not only ensures revenue for the state budget corresponding to the previous turnover tax but also contributes to promoting production and business. On that basis, it increases revenue for the state budget. Annual VAT in OECD countries (Organization for Economic Cooperation and Development) accounts for 18.7%. In Vietnam, VAT contribution to the state budget has continuously increased, bringing in 742,650 billion VND, accounting for 26.08% of total tax revenue in 2012 [15]. It can be seen that VAT contributes an important part with a large proportion of tax revenue paid to the state budget every year. For taxpayers, this tax is more attractive than other taxes because of its nature: taxpayers know what they have to pay and if they do not buy goods, they do not have to pay tax. Because there is less negative impact on taxpayers' psychology, the amount of VAT collected is also high and is better for economic growth than other taxes (typically income tax).

- VAT is collected on imported goods to create equality in business between import enterprises and domestic production and trading enterprises.

- When applying the Law on VAT, it has created a self-inspection mechanism for enterprises, limiting tax evasion. VAT has contributed to perfecting the tax policy system in our country in accordance with international practices, in accordance with the market economy, creating conditions for participation in expanding international economic relations, and quickly integrating with the regional and world economy.

However, besides the advantages of VAT, VAT also has certain limitations because the cost of VAT collection management is very expensive.

Poor. VAT has low tax rates so the regulatory nature of the tax is not high. Consumers with high or low incomes often have to pay the same tax. VAT does not ensure the requirement of fairness in incentive policies between the rich and the poor.

1.1.2.2. The role of value added tax law

VAT is so important that the codification of VAT is even more meaningful. The tax system of a country has many different taxes, of which VAT is one. Depending on the socio-economic situation in each country and the legislative level, the choices of different lawmakers, the construction of tax laws is different. Some countries regulate all taxes in a Code, which includes regulations on the content of the adjustment for taxable subjects as well as regulations on the order, procedures for implementation and management mechanisms, handling of violations, and dispute resolution for that tax. Some countries have a separate law on the content of each tax and a separate law on tax management. However, looking at the nature, when an enterprise implements a specific tax, the enterprise needs to comply with the content of the tax's regulations as well as the regulations on the order to implement that tax. Therefore, regardless of the form of VAT law, VAT law consists of two parts: the substantive law is VAT law and the formal law is tax management law.

* The role of VAT Law

The VAT Law encourages the production of export goods and exports instead of the old tax law which encouraged the production of goods to replace imported goods. In particular, the VAT Law has encouraged the production and trading of goods in which Vietnam has strengths: agricultural products, forestry products, seafood, and handicrafts.

In particular, the Law on VAT contributes to the management of enterprises, creating conditions for State agencies to inspect and supervise the business activities of enterprises, strengthen accounting and bookkeeping work and promote tax compliance.

promote the purchase and sale of VAT invoices in enterprises. Due to the requirements of declaring VAT, deducting input VAT, and calculating the correct income of enterprises, those working in business management have begun to pay attention to the work of opening accounting books, recording, managing and using invoices and vouchers. Through the implementation of accounting work, invoices and vouchers of enterprises, through tax declaration, tax refund, and tax settlement, it has helped the authorities and tax agencies gradually grasp the business situation of enterprises.

The Law on VAT has a direct impact on businesses and is considered one of the solutions to support businesses, stimulate the economy, contribute to promoting production development, expanding the circulation of goods and boosting exports. The implementation of the Law on VAT has come into life, positively impacted many aspects of the country's economy and society and achieved the goals set out when the law was promulgated, which were to contribute to promoting production and business development, ensuring revenue for the State budget.

* The role of Tax Administration Law

- The Law on Tax Administration is the basis for state agencies to more clearly define the roles and responsibilities of organizations and individuals involved in tax administration; the responsibilities, rights, obligations, and proactiveness of taxpayers are promoted through the mechanism of self-calculation, self-declaration, and self-payment of taxes, ensuring compliance with international practices.

- The Law on Tax Administration has contributed to fundamentally changing the face of tax collection and management by tax authorities, shifting from traditional manual management to modern management methods according to the mechanism of taxpayers self-calculating, self-declaring, self-paying taxes and self-responsibility for fulfilling tax obligations according to tax laws, supporting taxpayers to fulfill their tax obligations well.

- The Law on Tax Administration creates uniformity, enhances clarity and transparency in tax collection; strengthens the role of State and social inspection and supervision in tax administration; and is the legal basis for taxpayers to implement tax.

Protecting business interests in the enforcement of value added tax laws in Vietnam - 2

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