Why are many businesses being charged back taxes?

Lý do hàng loạt doanh nghiệp bị phạt và truy thu thuế tiền tỉ - Ảnh 1.

Business representative transacting at Ho Chi Minh City Tax Department

Accordingly, An Cuong Wood Company received a decision to sanction administrative violations of tax due to incorrect declaration, resulting in additional tax payment of 1.6 billion VND, administrative fine of more than 325 million VND and late payment fine of more than 80 million VND.

Similarly, the Ho Chi Minh City Tax Department decided to administratively fine the Vietnam Oil and Gas Low Pressure Gas Distribution Company VND358.5 million for false declarations leading to underpayment of value added tax, corporate income tax, and personal income tax. At the same time, the Ho Chi Minh City Tax Department also collected VND1.58 billion in underpaid tax and over VND438 million in late payment penalties from the company.

In particular, Phu Nhuan Jewelry Company (PNJ) announced that it received a decision from the General Department of Taxation on handling tax administrative violations.

Specifically, through the inspection results, the tax authority pointed out that PNJ declared incorrectly, leading to a shortfall of nearly 2.1 billion VND in tax payable; of which 442 million VND in 2021 and 1.6 billion VND in 2022.

The amount of corporate income tax arrears that PNJ must pay is 10.1 billion VND (over 2.1 billion VND in 2021, nearly 8 billion VND in 2022). The amount of personal income tax that PNJ must pay is 263 million VND. In addition, PNJ was also fined nearly 713 million VND for late tax payment.

Most recently, DNP Holding Corporation received a decision from the General Department of Taxation on administrative sanctions for tax violations through inspection of tax law compliance.

The General Department of Taxation said that DNP Holding Company had made false declarations leading to a shortage of tax payable and false declarations but not leading to a shortage of value added tax payable. The aggravating circumstance was repeated administrative violations. For the above-mentioned acts, this enterprise was fined and taxed 11.99 billion VND.

Similarly, Binh Minh Plastics Joint Stock Company has just been fined by the General Department of Taxation for administrative violations and forced to pay a total of more than 8.6 billion VND to remedy the consequences.

The main reason is that Binh Minh Plastics has made false declarations, leading to a shortage of tax payable as prescribed; false declarations do not lead to a shortage of value added tax payable.

Previously, the Hanoi Tax Department issued a decision to handle administrative violations of tax law against Gelex Group Joint Stock Company. The reason was that the company had made false declarations leading to a shortage of payable amounts. For this act, Gelex Group Joint Stock Company was fined 1.238 billion VND.

In addition, the group must also pay an additional late payment fee of VND 544 million to offset the tax shortfall to the State Budget.

A leader of the Ho Chi Minh City Tax Department said that currently, the law stipulates that businesses must self-declare and pay taxes. After that, the tax authority will conduct an inspection. In case the business declares taxes incorrectly, the tax authority will collect the remaining tax, and the business will be fined 0.03%/day for late payment of the unpaid tax amount.

However, public opinion is always concerned that false declarations may be intentional. Accordingly, can businesses accept being fined to take advantage of using tax money, instead of borrowing from banks to reduce operating costs?

Regarding this issue, according to Lawyer Nguyen Duc Nghia - a tax expert, the Law on Tax Administration has detailed regulations on self-declaration and tax payment. Specifically, enterprises that declare incorrectly but then discover and self-correct will not be subject to administrative penalties. In case, through inspection and examination, the tax authority discovers that the enterprise has made errors in tax declaration, this act is considered intentional. Accordingly, in addition to collecting tax arrears and imposing late payment fines, the tax authority also imposes administrative penalties on enterprises that violate tax obligations.

Cumulative data for the first 6 months of 2023 from the Ho Chi Minh City Tax Department shows that through checking tax declarations and payments of enterprises, this agency has collected, fined and refunded taxes of VND 1,241 billion. In tax inspections at enterprises alone, the Ho Chi Minh City Tax Department also collected, fined and refunded taxes of VND 736 billion.

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