Regulations on Complaints, Accusations and Resolution of Disputes Arising in VAT Administration

“Taxpayers who pay taxes late compared to the prescribed deadline, the extended deadline, the deadline stated in the tax authority's notice, or the deadline in the tax authority's handling decision must pay the full amount of tax and late payment at the progressive rate of 0.05%/day calculated on the amount of late tax for the number of days of late payment not exceeding ninety days; 0.07%/day calculated on the amount of late tax for the number of days of late payment exceeding ninety days”. However, according to the author, this regulation has not completely resolved the problem and is not really suitable in the changing market economy. Obviously, in different periods, depending on the socio-economic conditions and the State's monetary policy, the lending interest rates of commercial banks will be different. Thus, the regulation of an interest rate of 0.05%/day calculated on the amount of late payment for the number of days of late payment not exceeding ninety days or an interest rate of 0.07%/day calculated on the amount of late tax payment for the number of days of late payment exceeding ninety days may at some point have a certain difference compared to the interest rate of commercial banks.

Article 106 stipulates that if a taxpayer makes a supplementary declaration within the prescribed time limit, he/she will only be fined for late payment and will not be subject to an administrative penalty. However, Articles 107 and 108 do not distinguish between cases where the taxpayer makes a supplementary declaration beyond the time limit or does not make a supplementary declaration to deter taxpayers from raising their awareness of complying with the law.

Experiences of other countries and the Kyoto Convention show that: late payment of tax is not an act of intentional tax fraud, so only late payment interest is applied and not considered as a penalty; At the same time, when taxpayers voluntarily make additional declarations, the penalty is low, but if they do not make additional declarations, the penalty is high to increase the effectiveness of the self-declaration and self-responsibility mechanism of taxpayers.

In addition, to facilitate taxpayers, the tax and customs sectors are expanding tax payments through banks. However, in reality, there are cases where the bank has confirmed on the taxpayer's tax payment documents but many days later the bank transfers the money to the State budget, causing time to increase.

Late payment but the tax authority cannot identify the subject to handle because the Law does not have provisions on sanctions for subjects that collect tax but are slow to transfer to the State Budget. Therefore, it is necessary to supplement sanctions for commercial banks, credit institutions, organizations authorized by tax authorities to collect taxes, and guarantors who are slow to transfer tax and fines of taxpayers to the State Budget.

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Third , the Law on Tax Administration lacks provisions on the statute of limitations for handling violations of tax laws.

Reviewing the provisions on the statute of limitations for handling violations in current Laws, the Law on VAT stipulates that the statute of limitations for tax collection is 5 years or more, the Law on Accounting stipulates that accounting documents must be kept for a period of 10 years, while the Law on Tax Administration does not stipulate a statute of limitations for tax collection. The amended Law on Tax Administration in 2012 has added to Article 110 of the Law on Tax Administration, in the direction of stipulating that the tax collection period is 10 years or more, from the date of inspection and detection. The addition of the provisions is to conform to the reality when conducting tax inspections and audits, if there is tax collection, it must be based on accounting documents and ensure consistency in the management of state management agencies.

2.2.3.2. On enforcement of tax administrative decisions

Enforcement of tax administrative decisions is an important content in the measures applied by tax authorities to recover tax and fines from units and individuals that owe the State budget.

Enforcement of tax administrative decisions is an important content in tax management to ensure stable state budget revenue, ensuring equality and fairness among organizations and individuals in society. Therefore, it is extremely necessary to build a legal basis for applying measures to enforce tax administrative decisions. The Law on Tax Administration devotes Chapter IX, from Article 92 to Article 102, to regulate the content of enforcement of tax administrative decisions. Based on the provisions of the Law, the Government issued Decree No.

98/2007/ND-CP dated June 7, 2007, stipulating the handling of tax law violations and the enforcement of tax administrative decisions; the Ministry of Finance issued Circular No. 157/2007/TT-BTC providing guidance on the enforcement of tax administrative decisions. With the system of legal documents on the enforcement of tax administrative decisions mentioned above, it can be affirmed that the current tax management law has provided quite complete and detailed regulations on the subjects of tax enforcement, enforcement measures and principles of application, content, conditions and order, and procedures applicable to each measure of enforcement of tax administrative decisions.

However, in general, the effectiveness of enforcement of tax administrative decisions is not high, mainly because the law on enforcement of tax administrative decisions still has inappropriate provisions:

First , regulations on applying tax enforcement measures

Chapter 11 of the 2006 Law on Tax Administration stipulates 7 enforcement measures and each measure must be implemented sequentially. In reality, tax debt enforcement is not very effective because sequential application will take a lot of time and lose the opportunity to promptly apply the most appropriate enforcement measures for the situation. For example, the Law stipulates that the first measure to be implemented is to withdraw money from the accounts of the subject of enforcement at banks and credit institutions. In reality, the subject of enforcement still has assets and account balances at banks, but when the tax authority carries out procedures to verify accounts and balances at banks, the subject of enforcement has had enough time to disperse assets (not only money in the account but also other assets), leading to ineffective implementation of enforcement measures.

Countries such as Australia, Sweden, ... do not require the implementation of compulsory measures in order, but rather allow simultaneous implementation of measures to ensure debt recovery [7].

To ensure feasibility and facilitate implementation in practice, it is necessary to consider amending legal regulations on enforcement in the direction of creating a basis for implementation.

The mechanism flexibly applies measures to enforce tax administrative decisions. Accordingly, depending on each specific case, tax authorities can take the initiative in applying appropriate enforcement measures.

Second , tax administration laws still lack detailed and specific regulations on cases subject to enforcement of tax administrative decisions.

Article 92 of the 2006 Law on Tax Administration stipulates cases of forced debt enforcement to enforce tax administrative decisions, including cases where “taxpayers who still owe taxes and fines commit acts of asset dispersion or absconding”. However, the Law on Tax Administration and its implementing documents do not stipulate what constitutes acts of asset dispersion or absconding or signs of such acts. This is a shortcoming of the law, which may cause the tax debt management agency to not dare to enforce tax debt when the tax debtor shows signs of such acts.

Third, the tax administration law stipulates that tax debt enforcement does not ensure feasibility.

The 2006 Tax Administration Law provides for seven enforcement measures, divided into two main groups:

- Group of financial and property enforcement measures of the subject of enforcement, including: Withdrawing money from the account; Deductions from salary or income; Seizing assets, auctioning seized assets; Collecting money and other assets of the subject of enforcement that are being held by other organizations or individuals.

- Group of enforcement measures related to administrative procedures: Stop customs procedures; Revoke tax codes, suspend the use of invoices; Revoke business certificates, establishment and operation licenses, and practice licenses.

Generally speaking, these tax enforcement measures are considered quite strict because they directly affect the assets and business operations of the subject of enforcement. However, in reality, the provisions of the law still have many problems and are difficult to implement in practice.

- The enforcement measure of withdrawing money from the account, freezing the account of the subject of enforcement opened at the State Treasury, commercial banks and other credit institutions is only really meaningful when the balance in the account is sufficient to pay for tax obligations. The first problem in implementing this enforcement process is verifying the information of the tax debtor as a basis for issuing the enforcement decision. According to regulations, enterprises only have to declare to the tax authority one or several deposit accounts when registering for tax to be granted a tax code. The registration of such account is not mandatory but the enterprise must declare and fill in the information according to the pre-printed form. Therefore, when wanting to verify information about all deposit accounts of the enterprise, the tax authority is required to send a document verifying the information to all banks and credit institutions in the area to avoid missing the enterprise's deposit accounts. This procedure takes a long time, while the tax authority and the bank are carrying out the verification procedure, the enterprise has already withdrawn money from that deposit account. In fact, there have been many cases like the above, the control of the tax authority is very difficult because the time from determining the tax debt to implementing the enforcement is 90 days.

- The Law on Tax Administration stipulates in great detail the cases, conditions, and types of assets that are allowed to be seized to enforce tax. This is reasonable because this is a measure that directly affects the business conditions of the subject. However, in reality, many complicated cases still arise, for example, determining the ownership of the taxpayer with the seized assets. Except for assets that the law requires registration of ownership, how will the ownership of other assets that the law does not require registration be determined? Article 170 of the Civil Code only stipulates the basis for determining ownership based on the origin of the assets. Thus, in order for the tax authority to carry out the seizure of assets, the tax authority must rely on the forms of expression and proof of the taxpayer's ownership of the assets. These forms can be invoices for the purchase and sale of goods, raw materials, documents showing property transactions, etc. The problem is that when carrying out property seizure, the tax authority

Is there an obligation to inquire into and consider the existence of legal ownership or is it only based on the taxpayer's actual possession of the property?

Another issue that needs to be considered is the procedure for enforcing and seizing assets of units that are affiliated branches and dependent accounting units of the company. Currently, branches are still allowed to declare VAT themselves, but the assets of the branches are managed by the parent company (owned by the company). Therefore, in the case of a branch owing taxes, applying the measure of enforcing asset seizure is impossible, because the company is not the one owing taxes, and if the branch is forced to seize assets, there is no asset to be seized. Therefore, the regulations for handling these cases must be specifically guided so that local tax authorities can implement them consistently and ensure feasibility.

- Measures to collect money and other assets of the subject of enforcement held by another organization: Article 100 of the 2006 Law on Tax Administration on "Enforcement by measures to collect money and other assets of the subject of enforcement held by another organization" does not stipulate the order and procedures for handling seized assets (such as valuation procedures, auctions, costs for hiring valuation services, handling auction proceeds, etc.). Therefore, the application of this measure in the past has encountered many difficulties.

2.2.3.3. Practice of handling violations and enforcing tax administrative decisions

The work of handling violations and enforcing tax administrative decisions has initially achieved certain results, contributing significantly to the state budget revenue. The indicators of tax arrears and difficult-to-collect debts have decreased significantly in recent years.

Although the enforcement of tax administrative decisions has considered the cause of tax debt, only about 40% of enterprises recognized the fairness of the enforcement measures, while 37% rated them as average, 17% rated them as poor and nearly 10% rated them as negative. Regarding the flexibility of enforcement measures, up to 28% rated them as negative, 19% rated them as very negative. Handling violations and enforcing tax debt collection in our country has not yet achieved its goals.

The goal of changing taxpayers' tax compliance behavior in a positive direction (65% of surveyed enterprises agreed with this opinion) [18, 125]. The reason for the above assessments from enterprises comes from the fact that tax authorities attach importance to the goal of strictly handling violators and collecting correct and sufficient taxes into the State budget, but do not attach importance to the goal of changing taxpayers' behavior in a positive direction, so there is no flexible and fair management policy for each group of taxpayers according to the level of compliance and tax compliance characteristics of taxpayers. This once again shows that the current viewpoint and tax management strategy in our country does not really consider taxpayers as "customers". Current measures to handle violations and enforce tax debts only focus on how much tax the taxpayer owes and how many times the taxpayer has violated, without considering the actual circumstances of the taxpayer, the causes of the violations, the tax debts, the level of compliance of the taxpayer... in order to have appropriate management solutions for the taxpayer's circumstances and to change their compliance behavior.

2.2.4. Regulations on complaints, denunciations and settlement of disputes arising in VAT management

The Law on Tax Administration and its implementing documents have created the necessary legal basis for the implementation of the rights and obligations of subjects related to complaints, denunciations and dispute resolution in tax administration. However, practice shows that the law and law enforcement mechanism on the settlement of complaints and denunciations in tax administration have not received due attention and taxpayers have not been guaranteed their rights. In fact, taxpayers still have a fear of participating in the process of complaints, denunciations and lawsuits. According to a survey result, 60.6% said that the complaint and denunciation procedures are too complicated; 61.7% said that the results of handling complaints are unreasonable, 22% said that the waiting time for complaint resolution is too long [18, 130].

CHAPTER 3

SOLUTIONS TO IMPROVE THE LAW ON VALUE ADDED TAX MANAGEMENT IN VIETNAM

3.1. The need to improve the law on value added tax management in Vietnam

After nearly 6 years of implementing the 2006 Law on Tax Administration, the tax administration legal system in general and VAT administration in particular have made many advances and many landmark reforms, typically the application of the self-declaration and self-payment mechanism in tax administration. According to IFC experts, Vietnam has carried out many important tax reforms, enhancing transparency, fairness and efficiency. Administrative procedures in the tax sector have been simplified into 4 main groups: invoices, tax registration procedures, value-added tax (VAT) declaration procedures and tax refund procedures. The reforms and simplifications in these 4 groups of procedures have been positively received by businesses. According to calculations, after adjusting the relevant legal provisions so that these reforms and simplifications are fully applied, it is expected to save 1,921 billion VND/year, equivalent to a cost reduction rate of 43% of the cost of administrative procedure compliance. In terms of time, it will save about 1,039 hours of administrative procedures, an average of about 3 hours/procedure. [8]

The implementation of the Law on Tax Administration, in addition to the achieved results, still has certain limitations and difficulties. Many provisions of the Law have revealed limitations, are not strict and consistent. Difficulties arise at many stages in the tax administration process (registration, tax declaration, tax calculation, tax payment, tax refund, tax inspection, tax assessment, tax assignment, etc.); there are no regulations to ensure the effectiveness of implementation, and there are no necessary sanctions, leading to lax implementation. Some contents stipulated in the Law on Tax Administration have not met the goals of reforming and simplifying tax administrative procedures, have not created favorable conditions for taxpayers, have not met the goals of improving effectiveness and efficiency; and are not consistent with other relevant documents. In practice, there have been some cases

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