In today's reality, tax inspecting is of paramount importance to a business's operations. Business leaders often lack clarity on whether the financial reports prepared by their staff comply with Vietnamese accounting standards and norms.
After each tax inspection, businesses often have to pay a substantial amount in back taxes and fines. The root cause of this issue is that business leaders do not have a clear understanding of the current accounting and tax regulations.
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Every day, businesses generate various economic transactions. Each type of transaction reflects a distinct operation, but, in general, they are all related to different tax categories: from value-added tax, corporate income tax to contractor tax, import-export tax, and many other types of expenses. This poses many challenges for a business's accounting staff, requiring them to stay updated on tax regulations to carry out their duties accurately and avoid tax risks for the company.
In this blog, we will analyze tax files and provide some important insights for businesses.
1. What is a tax audit file?
Tax audit files encompass a wide range of documents. In the scope of this article, we will only address some of the most fundamental documents that every business should have:
Business registration certificate.
Company's charter.
Financial regulations.
Accounting ledger.
Purchase and sales ledgers.
Financial settlement reports: Corporate income tax settlement, personal income tax settlement, annual financial statements.
Original purchase and sales invoices and periodic tax declarations.
Bank subsidiary ledger and original authorization letters.
Employment contracts and payroll records.
Economic contracts and debt reconciliation records.
Other relevant documents (varies depending on the business).
2. Why is it necessary to review tax records?
According to statistics from Labour newspaper as of June 2021, the entire tax industry conducted 32,209 inspections and audits, an increase of 110% compared to the same period in 2020. A total of 323,206 tax declaration files were audited at the tax authorities' headquarters, an increase of 114.93% compared to the same period in 2020.
The total recommended amount for processing through inspections and audits was 22,963 billion VND. Among these, the increased tax through inspections and audits was 4,935 billion VND, reduced deductions were 828 billion VND, and reduced losses were 17,200 billion VND.
It is evident that tax inspections and audits are becoming more frequent with stricter oversight from government agencies. Therefore, the primary benefit is minimizing risks and reducing the amount to be paid when undergoing a tax inspection at your business. Additionally, it allows you to rectify any past errors for future years.
In cases where businesses find tax procedures too complex, they can hire a review and audit firm to examine their tax records. With deep expertise, we can identify risks related to tax non-compliance and deficiencies in tax planning. RSM Vietnam's tax review and audit service is a solution that helps save costs, allows businesses to proactively manage risks, and minimize potential issues during tax inspections.
Tax review and audit service is a service that helps review and examine all tax filings for a business. The benefits of tax consulting and tax audit services include:
Minimizing tax risks and resolving issues promptly upon occurrence:
Tax compliance violations are a constant risk for businesses. Minimizing these risks as much as possible is a top priority for company management. To reduce tax risks, the best approach is for your business to conduct periodic tax reviews and audits to detect and address tax issues promptly. Allowing these issues to persist for an extended period makes them increasingly difficult to rectify and can result in higher penalties.
Cost savings for businesses:
When businesses hire tax consulting services, they can save costs associated with building an accounting department or streamline their existing accounting processes (e.g., reducing the impact of personnel changes, not needing to provide insurance for employees, etc.).
3. Benefits of using RSM Vietnam's tax audit service
Advising on legal regulations related to taxation and accounting in connection with the business operations of the enterprise.
Compiling and refining accounting records based on actual invoices and documents issued by the enterprise.
Balancing revenue and expenses for the enterprise.
Our responsibilities:
Conducting checks and audits of incoming and outgoing invoices in compliance with legal regulations.
Reviewing monthly, quarterly, and annual tax reports.
Processing data related to tax settlement reports.
Verifying the management and depreciation of fixed assets in accordance with legal requirements.
Verifying labor costs, bonuses, and mandatory insurance payments in compliance with legal regulations.
Revising financial statements, accounting records, and tax declaration documents in case of errors.
Here are some tips for you when undergoing a tax file examination at your business. We hope this article helps you understand the auditing and examination tasks, as well as helps you avoid risks in your financial records and reports.
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