Regulations on tax investigation, which were included in the draft of the tax management law last year, have now been removed from the latest version.

Customers are seen buying goods at a supermarket. Regulations on tax investigation have now been removed from the latest draft version

When the Ministry of Finance proposed assigning tax investigation duties to the tax authority last November, many enterprises, experts and lawyers voiced their concerns.

The Ministry of Finance wanted the tax authority to have the power to demand that agencies, organizations and individuals provide information and materials to facilitate inspections and investigations into violations of tax regulations and tax evasion.

Besides this, in the previous proposal, if there is evidence of violations, heads of inspection teams should be able to seal goods, storehouses and documents and take violators into custody. The General Department of Customs argued for the need for such a function of the tax authority.

However, according to enterprises and experts, the proposal lacked a legal basis and could have serious implications, including abuse of authority by the taxman.

Upon opposition, this content was excluded from the draft law’s most recent revision.

Regarding tax management for ecommerce transactions, cross-border express goods worth VND1 million per shipment or more are subject to value added tax and personal income tax. Taxes are not imposed on goods with a value below VND1 million per shipment as in the previous draft.

According to the Ministry of Finance, to make payments easy for taxpayers, prevent negative implications for ecommerce and expand the tax base, specific regulations and tax management measures are needed for this new business model.

New contents introduced to the draft law include building a database; providing electronic tax services widely; and specifying the responsibilities of ministries, agencies and organizations with regard to ecommerce.

One notable inclusion in the draft law is that commercial banks are responsible for deducting and paying the required taxes on behalf of organizations and individuals overseas for ecommerce activities that generate an income in Vietnam.

The central bank must coordinate with the Ministry of Finance to develop a national ecommerce payment system and to establish mechanisms to manage and oversee payment transactions related to cross-border ecommerce activities.

Also, the Ministry of Industry and Trade must work with the Ministry of Finance on tax management, supplying related information to manage the taxes of traders, organizations and individuals active in ecommerce.

The draft law on tax management will replace the 2006 law. Since the release of its first draft last November, the Ministry of Finance has received multiple comments from ministries and agencies. The draft law is expected to go before the National Assembly at the sixth sitting scheduled for later this year and approved at the seventh sitting set for next year.

 SGT