The necessity off the thesis
Tax compliance is crucial for the state budget, as it supports the functioning of government operations and promotes business development aligned with national strategies Businesses contribute to the state budget through taxes incurred during production and operations, which helps increase state revenues, regulate the economy, and ensure social equity However, many businesses struggle with tax declaration and payment processes, and some attempt to evade corporate income tax, leading to revenue losses for the state VACO Auditing Company Limited adheres to tax obligations diligently, yet it faces challenges in achieving full compliance This context underscores the importance of examining tax compliance at VACO Auditing Company Limited.
Objectives of the thesis
The objective of the thesis is to propose solutions to improve the tax complicance of VACO Auditing Company Limited in the near future The specific objectives are as follows:
- Summarize, systematize the rationale for tax complicance such as the concept, content, assessment criteria and factors affecting tax compliance of VACO Auditing Company Limited
- Analyze and assess the status of tax compliance of enterprises, situation of factors effecting the tax complicance of businesses in Viet Nam today
- Proposing solutions to improve the tax complicance of VACO Auditing Company Limited in the near future.
Object of thesis
- Research subjects: Tax compliance activities of VACO Auditing Company Limited.
Scope of thesis
- Regarding space: The situation of compliance with corporate income tax and value added tax of VACO Auditing Company Limited
- Regarding time: Researching the actual situation in the period of 2018 -
Research methodology
- The thesis using the general research method is the method of dialectical materialism and historical materialism
- The thesis also uses specific research methods such as synthesis, survey, analysis, comparison, comparison
To evaluate the tax compliance status of enterprises in Vietnam and the factors influencing it, this thesis employed a combination of data analysis from the production and business activities of these enterprises, along with interview methods.
Structure of the thesis
Excluding the preface with general contents to introduce the objectives, scopes and research methods, the thesis is structured into 3 main chapters:
Chapter 1: Tax overview and tax obligations of enterprise
Chapter 2: Tax obligations at VACO Auditing Company Limited
Chapter 3: The solutions to complete tax obligations at VACO Auditing
TAX OVERVIEW AND TAX COMPLIANCE OF
Tax overview
Taxes are mandatory contributions imposed by government entities, which do not yield direct benefits in return These funds are primarily utilized to finance public goods and services.
The Longman Dictionary of Business English defines tax as “A payment of money legally demanded by a government authority to meet public expenses”
The Academy of Finance defines tax as a legally mandated portion of income that citizens are required to pay to the government, serving to fund public expenditures.
From the concepts of tax mentioned above, the following characteristics can be seen:
Taxes are mandatory payments imposed by the government, distinguishing them from other voluntary revenue sources like property sales, loans, grants, or donations If taxes were voluntary, compliance would be minimal, as individuals would not perceive direct benefits in return for their contributions.
Taxes differ from fines in that they are not imposed as penalties for legal violations Instead, tax payments reflect the citizens' inherent responsibility to support the state, rather than being associated with any wrongdoing.
Tax is an indirect form of compensation, where taxpayers receive no immediate benefits in return for their payments While they may eventually enjoy public goods and services like security, national defense, and infrastructure, these benefits are not directly linked to their tax contributions Taxpayers cannot demand services before or immediately after paying taxes, and the relationship between the amount of taxes paid and the public services received is not positive.
- Main revenues of the government‟s budget
The primary role of taxation is to generate revenue for public expenditures and government operations While the government utilizes various funding sources such as the sale of state properties, fees, voluntary donations, and loans, taxes remain the most significant source of income Tax revenue constitutes the core of the government’s budget, as tax payments are mandatory and collected from a diverse range of individuals and businesses whose incomes stem from economic activities.
Taxes provide a crucial advantage due to their mandatory nature, ensuring a reliable source of revenue for government budgets Unlike voluntary donations, which are unpredictable, taxes guarantee consistent funding Additionally, loans rely on the lender's willingness and require repayment by a specific date, further emphasizing the stability that tax revenue brings to public finances.
Taxation plays a crucial role in regulating the economic cycle, which consists of four stages: recession, crisis, recovery, and prosperity While crises negatively impact economic development, excessively rapid growth can also be detrimental, leading to imbalances such as labor shortages and depletion of natural resources Thus, maintaining a balanced and appropriate rate of economic growth is essential for the overall health of any economy.
The government plays a crucial role in ensuring stable economic development by employing various tools, including public expenditure policy, monetary policy, and tax policy.
Second, tax helps to balance the labor market and control inflation
Tax adjustments can influence the economic cycle by controlling inflation and reducing unemployment However, improperly managing these tax changes can exacerbate inflation and increase unemployment, highlighting the need for careful implementation.
Taxes play a crucial role in stimulating economic development in line with government objectives Through the strategic use of tax rates and incentives, the government encourages businesses to invest in targeted regions or specific industries while also limiting investments in less desirable areas This approach ensures the effective utilization of a country’s limited resources and helps achieve the government’s established goals.
Taxation plays a crucial role in safeguarding domestic production by imposing high import duties These elevated duties increase the prices of imported goods, making it challenging for them to compete with similar products produced locally As a result, domestic goods become more appealing to consumers, fostering a healthier local economy.
Environmental taxes address the issues arising from negative externalities, which are often a shortcoming of the market economy Market failures, such as water and air pollution, highlight the need for intervention By imposing taxes on the pollutants released by firms, the government can effectively mitigate these negative impacts and promote a healthier environment.
- Reduction of unfairness in income distribution
Income inequality is often viewed as an unavoidable outcome of market economies, presenting a significant challenge for nations today This phenomenon can be classified as a market failure Addressing this issue and ensuring that the advantages of economic growth are accessible to all individuals in society is a crucial responsibility of the government.
The government can utilize taxation to address income inequality by imposing high excise duties on luxury goods, effectively targeting the wealthy who can afford such purchases Additionally, implementing a progressive income tax system can help narrow the wealth gap between rich and poor Furthermore, offering tax incentives like VAT exemptions on essential goods can support low-income individuals in achieving financial stability.
Theoritical background of tax compliance of enterprises
The 2014 Law on Enterprises in Vietnam, enacted by the National Assembly, defines an enterprise as an organization that possesses its own name, assets, and head office, and is registered in accordance with legal provisions for business purposes This definition provides a comprehensive and coherent understanding of what constitutes an enterprise.
The glossary of Industrial Organisation Economics and Competition Law, compiled by R.S Khemani and D.M Shapiro for the OECD in 1993, defines an enterprise as a project or venture undertaken for profit Commonly associated with the term "business," it typically refers to the business entity engaged in the enterprise, making it synonymous with terms like "undertaking," "company," or "firm."
Enterprise is understood as an economic organization, having legal status, conducting business activities according to the provisions of law, in order to achieve certain goals
An enterprise is a legally recognized economic organization that operates under a unique name, which must not conflict with existing names or violate legal and ethical standards.
- An enterprise has assets, assets of the enterprise called business assets, under the ownership or use right of the enterprise
- Enterprises with transaction offices According to the Enterprise Law, the head office of an enterprise is the place of contact and transaction of the enterprise
Specific characteristics of joint stock company:
The company's charter capital is divided into equal parts known as shares, which can be represented by a certificate, book entry, or electronic data confirming ownership Each share has a designated par value, which reflects its face value Shareholders can contribute capital to the company by purchasing shares, and they have the option to buy multiple shares.
- During the operation process, at least three members must join the joint stock company
A joint stock company is a legal entity that holds responsibility for its assets, while shareholders are liable for the company's debts only up to the amount they have invested, limited to the value of their shares This liability structure is established from the date the company receives its business registration certificate.
- Joint stock companies have the right to issue securities such as stocks, bonds, investment fund certificates and other securities to raise capital
- Shares of members are expressed in the form of stocks Shares of joint stock companies are considered as goods, freely purchased, sold or transferred in accordance with law
- Classification according to the nature of ownership and operational purposes of enterprises, enterprises are divided into: private enterprises and public enterprises
- Classification according to the legal status of enterprises, enterprises are divided into: enterprises with legal status and enterprises without legal status
Enterprises can be classified based on their asset liability scope into two categories: limited liability enterprises and responsible enterprises This classification is significant as it defines the extent of the enterprise's responsibilities, particularly in the event of bankruptcy.
Enterprises can be classified based on their ownership structure and capital contribution methods They fall into two main categories: single-owner enterprises, which include private enterprises and one-member limited liability companies, and multi-owner enterprises, comprising joint stock companies, limited liability companies with two or more members, and partnerships.
- Classification according to the type of organization and operation, enterprises are divided into: Joint - stock companies; limited liability company; partnerships; private enterprise
According to the Enterprise Law 2014, there are the following types of businesses:
- One member limited liability companies and limited liability companies with two or more members;
- Creating jobs, increasing earnings, enhancing the lives of workers, and lowering unemployment
In recent years, established enterprises have played a crucial role in job creation and reducing unemployment rates, while also driving an increase in worker incomes The rapid rise in earnings for workers not only enhances individual livelihoods but also fosters societal improvement and facilitates the transition of labor from agricultural to non-agricultural sectors.
- In recent years, business expansion and development has been a critical role in the economy's development and stability
The expansion of businesses leads to an increased and diverse range of goods and services, enhancing quality and reducing reliance on imports This significant development contributes to the growth of domestic consumption and exports, thereby stimulating local production Ultimately, these factors play a crucial role in maintaining economic stability and fostering long-term development.
- Business development impacts on structural changes in the national economy and within each industry
The economic landscape is characterized by a diverse range of sectors, where state-owned and foreign-invested enterprises hold significant shares Meanwhile, small and dynamic private businesses are rapidly emerging across various industries and regions The collective economy has seen a resurgence and growth, fostering opportunities for labor reallocation from low-productivity sectors like agro-forestry and fisheries to more productive industries and services This shift not only addresses the challenges of low income and job scarcity but also enhances overall productivity and income levels in the economy.
- Business development impacts on the better resolution of social issues
In recent years, the business sector has significantly diversified its products and services, enhancing their quality to meet the growing consumer demand This expansion has improved the material living standards of the population while boosting the volume of export goods Many previously imported items, including cars, motorbikes, electronics, apparel, food, beverages, cosmetics, and household appliances, are now successfully manufactured domestically and trusted by local consumers.
Enterprises play a crucial role in generating revenue for the state budget, and their rapid growth in recent years has created opportunities for investing in infrastructure development, enhancing health and education services, and reducing poverty.
1.2.2 Overview of tax compliance of enterprises
To understand tax compliance effectively, it is essential to first grasp the broader concept of compliance, which is defined as "to keep and do as prescribed" according to the Vietnamese dictionary In English, compliance emphasizes adherence to established rules and regulations, highlighting its importance in the context of fulfilling tax obligations.
"compliance" means "to follow a rule, a principle, or a regulation, such as a regulation, a policy, or a law” It means "to follow a rule, a principle, or a regulation, such as a regulation, a policy, or a law"
Tax compliance refers to the thorough and accurate adherence to tax legislation by various entities, including tax administration agencies, taxpayers, and relevant organizations For taxpayers, compliance entails fulfilling tax obligations completely, on time, and accurately, which includes meeting deadlines, ensuring the precision and honesty of tax registrations, and fulfilling duties related to tax declarations and payments.
1.2.2.2 Basic contents of tax compliance
Businesses must complete tax registration with the relevant tax authorities or business registries, providing essential identifiable information For individuals, this includes their full name, age, occupation, and address In contrast, business organizations are required to submit details such as the organization's name, headquarters, addresses of production facilities and shops, business capital, business lines, and information about legal representatives.
After the Enterprise carries out tax registration procedures, the tax agency shall issue it a tax identification number Each business has a unique tax code
The first, about the deadline for filing a tax registration
ACTUAL SITUATION OF TAX COMPLIANCE AT
Overview of VACO Auditing Company Limited
2.1.1 The history of VACO Auditing Co., Ltd.'s formation and growth
VACO Auditing Company Limited stands out as one of Vietnam's premier auditing firms, delivering expert services in auditing, financial consulting, accounting, tax, valuation, business valuation, training, and human resource management across various economic sectors.
On May 13, 1991, the Minister of Finance issued a directive to establish Viet Nam Auditing Corporation, known as VietNam Auditing Company (VACO), marking it as the first company in Vietnam to offer auditing and accounting services Additionally, it operates alongside a firm that provides accounting services, referred to as ASC.
On October 1, 1997, VACO, represented by the ISD International Service Department, officially became a member of DTT Airlines in Vietnam, following the approval of the Ministry of Finance through regulation No 697A-TC/QD/TCCB This designation made VACO the sole legal representative of DTT in Vietnam.
In June 2003, Viet Nam Auditing Company (VACO) transitioned from a state-owned enterprise to a one-member limited liability company, entirely state-owned, as per Decision No 1297/QD/TC/BTC.
In March 2007, VACO Auditing Co., Ltd 1 member was transformed into a limited liability company with 2 members or more and officially changed to Deloitte Viet Nam Co., Ltd
VACO was separated from Deloitte Viet Nam Co., Ltd on November 27,
Established in 2007, VACO Auditing Company Limited is renowned for its prestigious brand, built on robust audit procedures, strong leadership, and a team of highly skilled professionals The company upholds core values of independence, objectivity, and customer confidentiality, emphasizing the significance of service quality and maintaining a professional reputation.
VACO Auditing Company Limited stands out as a premier auditing firm in Vietnam, providing a wide range of specialized services including auditing, financial consulting, accounting, tax advisory, business valuation, training, and human resource management across various economic sectors.
Our expert practitioners, trained at renowned local and international universities, possess extensive knowledge and practical experience in audit, finance, accounting, tax, and investment laws in Vietnam, adhering to both Vietnamese and international professional standards With offices in major cities including Hanoi, Ho Chi Minh City, Hai Phong, and Dong Nai Province, VACO delivers high-quality professional services to enterprises across the nation.
VACO is dedicated to delivering exceptional human resource and preference services tailored to meet the unique needs and expectations of our clients We prioritize providing top-level attention to ensure complete client satisfaction.
VACO provides top-notch services to a diverse range of clients, including leading corporations, state-owned enterprises, foreign-invested companies, joint stock firms, and projects backed by international organizations, as well as basic construction investment initiatives.
VACO is committed to fostering client growth, ensuring that clients are consistently satisfied with the high quality of services provided This dedication to excellence has been fundamental in establishing VACO's value over the years By prioritizing client success and empowering employees to reach their full potential, VACO is effectively achieving its goals.
2.1.2 The organizational structure of the company
The General Director of VACO oversees the company's operations and management, ensuring the quality of audit services offered for investment projects in mechanical construction Additionally, the General Director defines the range of services provided and formulates both short-term and long-term business strategies for the company.
Partners play a crucial role in supporting the general director by overseeing the company's business activities With extensive knowledge and practical experience across various sectors, they are tasked with planning audits, supervising financial statement audits, and providing corporate consulting Additionally, they manage potential tax-related risks and optimize the tax structure to enhance business value.
The Administration and Human Resources Department oversees personnel records and manages administrative transactions, ensuring that information and documents are regularly updated Additionally, the Human Resources team is responsible for monitoring and assigning labor, facilitating employee business travel, and providing essential office supplies such as pens, paper clips, printing paper, and ink.
+ Specialized Department 1- Auditing basic construction
+ Specialized Department 2- Auditing financial statements
Professional departments conduct financial statement audits in compliance with legal requirements, including audits for special and tax purposes They also perform various audit functions such as compliance audits, internal audits, and reviews of project finalization reports Additionally, these departments assess financial statement information and verify data based on pre-agreed procedures.
The department plays a crucial role in documenting financial transactions in accounting records and preparing financial statements to assess the company's profit or loss for a specific period Additionally, it is tasked with planning revenue and expenses while collaborating with other departments to execute the company's overall strategic plan effectively.
This department conducts real estate and real estate valuation services, business valuation and project evaluation as well as project investment consultancy
Actual situation of tax compliance of VACO
Following the issuance of its investment certificate, VACO Auditing Co., Ltd promptly prepared and submitted a registration dossier to the Hanoi Tax Department This dossier included a tax registration declaration and a copy of the investment certificate from the People's Committee of Hanoi After verifying the legality of the submitted tax registration file, the Hanoi Tax Department granted VACO Auditing Co., Ltd a tax code on May 13, 1991.
Tax registration is essential for businesses to meet their tax obligations VACO Auditing Limited Company obtained its tax code (0102546856) from the tax authority on January 16, 2008 The company's registered headquarters is situated on the 12A floor of the Corporation Tower at No 63.
Le Van Luong in Cau Giay District, Hanoi City, Vietnam, has been operational for 31 years, consistently fulfilling its tax obligations as per the granted tax code and adhering to all relevant legal regulations.
Upon successfully registering the company and fulfilling all legal requirements, the business has submitted its initial tax return to the tax authorities The company is obligated to pay various taxes to the state budget, which are essential for compliance with fiscal regulations.
License tax is an annual mandatory tax that businesses must pay after obtaining their business license Companies are required to submit a license fee declaration to their local tax office According to Article 4 of Decree 302/2016/Dec-MOF, organizations involved in goods and service production and trading activities are subject to specific licensing fee rates For a company with a charter capital of 6,000,000,000 VND, the annual license tax amounts to 2,000,000 VND.
Value Added Tax (VAT) is levied on the increased value of goods and services throughout their journey from production to consumption, contributing to the budget based on consumption levels The company utilizes the deduction method for VAT calculation.
Corporate income tax is a direct tax levied on a company's income after accounting for reasonable and legal expenses The annual amount of corporate income tax owed by a business is determined using a specific calculation formula.
The tax authorities have positively assessed the company's adherence to tax registration regulations, noting that it registered for tax at the time of establishment This proactive approach facilitates effective tracking by the tax authorities' main administration Additionally, the company receives support for tax declaration, payment, and refund processes, enhancing the efficiency of its tax accounting department.
Tax authorities are increasingly leveraging information technology to enhance tax administration, particularly in the areas of tax declaration, calculation, and payment VACO Auditing Company Limited is actively engaged in online tax declaration, which streamlines the process and allows for quicker fulfillment of tax obligations The company utilizes the General Department of Taxation's declaration support software, facilitating efficient communication and swift exchange of tax information between the tax authorities and VACO.
The company utilizes the tax credit method for calculating VAT, requiring the tax accountant to declare deductible input VAT, output VAT, and payable VAT monthly At the end of the year, the company must finalize its Corporate Income Tax (CIT) To ensure compliance with tax laws, the company conducts its tax accounting in line with the latest regulations set forth by the Tax Directorate.
Under the Law on Tax Administration, companies are required to utilize the official tax return and accompanying appendix forms specified by the Ministry of Finance, without altering their format or layout Tax declaration dossiers must be submitted to tax authorities within the designated time frame, except in instances of tax obligation termination or business suspension The current tax return form in use by the company is outlined in the regulations.
- Monthly value - added tax return, made according to form No.01/AV enclosed with Circular No 80/2021/Cir-MOF of September 29, 2021 of the Ministry of Finance
This shows that the company has used the correct tax refund form prescribed by the Ministry of Finance Shows signs of corporate tax compliance from the most basic things
Table 2.2: Situation on the company's value - added tax declaration for the period 2018 - 2021
2 The number of delayed tax returns 0 0 0 12
4 Number of additional tax returns 4 1 1 0
(* Estimate) Source: Report on value added tax of VACO Auditing Limited Company for the period of 2018 - 2021
From the data table shows, the business has submitted all tax returns for the 2018 - 2021 period
Timely and complete VAT declarations indicate a company's strong commitment to compliance; however, errors in the declaration process necessitated additional submissions Notably, in 2018, the company submitted 4 additional VAT declarations out of a total of 16, reflecting a significant oversight due to omitted invoices and the cancellation of previously accounted invoices As a result, the accountant was required to file additional VAT declarations along with necessary explanations Fortunately, subsequent years have seen a decrease in additional declarations, highlighting improvements in accounting practices and management oversight.
Each month, the accounting department performs a thorough review of both output and input invoices to verify their reasonableness, validity, and legality This process includes compiling the company's VAT invoice statement and reconciling it with the figures recorded in the accounting accounts, specifically accounts 1331 and 3331 It is essential that the input VAT listed aligns with the debt recorded in account 1331, while the output VAT must correspond with the figures in account 3331.
Before the 10th day of the next quarter, accountants must submit the VAT declaration using HTKK software, following Form No 01/AV as per Circular No 80/2021/Cir from the Ministry of Finance The VAT amount carried over from the previous period should match the opening balance of Account 1331, and both input and output VAT must be reported accurately If the output VAT is lower than the input VAT, the company is not liable for tax payment during that period Conversely, if the output VAT exceeds the input VAT, the company must pay the difference between the two amounts.
VACO Auditing Co., Ltd will submit its declaration to the General Department of Taxation via the nhantokhai.gdt.gov portal, with a submission deadline set for the 30th day of the following quarter To avoid potential errors and ensure timely tax payments, VACO Auditing Co., Ltd proactively submits its declarations ahead of schedule.
2020 and 2021, the amount of VAT payable by the company also has fluctuations, specifically as follows:
Table 2.3: Statistic of VAT amount of VACO Auditing Company Limited for the period 2018 - 2021
(* Estimate) Source: Report on value added tax of VACO Auditing Limited Company for the period of 2018 - 2021
In 2018, the amount of VAT payable was VND 6,899 million but by
General assessment of compliance with tax obligations of VACO
2.3 General assessment of compliance with tax obligations of VACO Auditing Co., Ltd
To facilitate the preparation of tax returns quickly and accurately, like VACO Auditing companies, currently using electronic tax declaration
The company's use of tax accounting software has minimized confusion in calculations and accounting records ensure accuracy high fidelity saving manpower and costs, convenient for checking, monitoring and accounting
The company has established a comprehensive accounting system for corporate income tax and value-added tax, which includes sales invoices, lists of invoices, and documentation for purchased and sold goods and services It maintains detailed records of revenue, income accounting vouchers, and expense accounting vouchers for each period Corporate income tax monitoring is conducted quarterly, reflecting the production and business results for both the quarter and the entire year.
Monitor and fully record monthly and quarterly revenue in order to promptly calculate and make quarterly provisional corporate income tax declarations in accordance with tax authorities' regulations
The declaration and temporary payment of corporate income tax must comply with the regulations on the method of implementation as well as the time
In addition to the advantages achieved, the company's tax obligations still have the following limitations:
- The monthly tax declaration still has many invoices of the previous month due to omission and due to the different declaration period still occurring
Due to the company's authorization to print invoices independently, there have been instances of duplicate invoices being issued, as old versions were not properly destroyed before reprinting for customers.
The use of the software can result in discrepancies between the number of warehouse receipts and invoices, a detail that accountants often overlook This oversight can create challenges in organizing documents effectively.
The company lacks a comprehensive record of loans and external interest expenses, relying solely on payment slips for its accounting This approach makes it challenging for learners to grasp the details of the company's interest expenses.
The company’s decision to forgo quarterly business result calculations increases the complexity of annual accounting, significantly raising the risk of errors This lack of quarterly expense tracking complicates the accurate estimation of corporate income tax, leading to discrepancies that may not reflect the true financial situation.
To comply with the Law on Corporate Income Tax, companies must calculate their corporate income tax based on all sources of revenue generated during a period, not just from the sale of goods and services This includes financial revenue and other income, ensuring a comprehensive assessment of the company's total earnings.
The organization of accounting work within the company is generally well-structured and logical; however, both objective and subjective factors have led to some shortcomings in fulfilling corporate income tax obligations While these limitations are minor and do not significantly impact operations, addressing them could enhance compliance with tax responsibilities and boost overall business efficiency.
RECOMMENDATIONS AND SOLUTIONS TO IMPROVE
Operation orientation and development goals of VACO Auditing Co.,Ltd
3.1.1 Operation orientation of VACO Auditing Co.,Ltd
VACO has experienced significant growth in market size, service diversification, staff quality, customer base, and revenue The audit service remains the company's primary offering, generating the highest income Despite intense competition, VACO has consistently improved service quality, expanded its service portfolio, and attracted new clients, thereby enhancing its reputation and brand This commitment has enabled the company to meet its obligations to the State budget effectively.
The company aims to establish itself as a leading auditing firm in Vietnam by fostering a strong corporate culture and implementing effective communication campaigns to generate demand for its consulting services By developing new services and expanding its market reach, the company seeks to enhance business efficiency and build a reputable brand in Vietnam and the Asia Pacific region This strategy will not only create more job opportunities but also improve employee welfare.
Simultaneously, enhance international operations and public marketing efforts while broadening financial and tax advisory services for strategic clients This approach emphasizes targeting companies that have investment capital from Japan, South Korea, and other regional nations.
3.1.2 Development goals of VACO Auditing Company Limited
The company aims to enhance its tax advisory services by targeting multinational corporations, foreign-invested companies, and large domestic enterprises By improving service quality and strengthening competitiveness in areas such as transfer pricing, business acquisition advisory, and tax risk consultancy, the company is positioning itself to meet the growing demand for these essential services, which are increasingly important to businesses This strategic focus presents significant growth opportunities in the evolving landscape of tax consultancy.
In the coming time, the entire Board of Directors and employees of the Company always work actively, striving to achieve the set goals:
- Maintain a dynamic, creative, talented, responsible and reputable leadership team of the company to ensure stable and sustainable development
Innovating business management and administration methods is essential for fostering motivation and driving company growth in an increasingly competitive landscape This includes engaging enterprises across all economic sectors, particularly foreign-invested companies and international organizations operating in Vietnam.
- Designing audit programs, consulting and appraising appropriate prices, constantly improving service quality.
Solutions to fulfill tax obligations of VACO Auditing Co., Ltd
3.2.1 Group of solutions on personnel organization and resources
A tax accountant plays a crucial role in ensuring a company's tax obligations are met, making it essential to enhance the skills of the accounting department By mastering tax regulations and practices, tax accountants can perform their duties with greater accuracy and efficiency, minimizing the risk of errors To achieve this, the tax accounting department must adhere to specific requirements that support professional development and expertise.
- Must have a solid knowledge of accounting, auditing in general, and tax as well as tax policies and regulations of the State in particular
- Must regularly update and improve knowledge of new regulatory documents in general and knowledge of accounting, auditing, and tax in particular;
Tax accounting in Vietnam must adhere strictly to Vietnamese accounting standards and relevant regulations Companies are encouraged to flexibly implement their established accounting and auditing processes while ensuring compliance with these standards.
- Must maintain independence, integrity, and confidentiality in auditing, always have a high responsibility in the process of performing work
Improving the IT skills of staff is essential for enhancing workplace efficiency The company should consider enrolling employees in short-term training courses focused on software applications relevant to their roles Additionally, accountants can boost their IT proficiency by engaging in self-directed learning through online resources and other avenues.
The diverse responsibilities of accountants significantly impact tax accounting practices To enhance efficiency, it is advisable to hire additional accountants to manage specific areas of internal accounting This approach will alleviate pressure on current accountants, leading to more effective monitoring of tax accounting processes.
3.2.2 Improve operational coordination among relevant departments
A business is an organization made up of various individuals and teams, making alignment essential for success While different departments carry out distinct functions and tasks, their cohesive collaboration is crucial for achieving overall business objectives.
The establishment of clear working processes between departments is crucial for maintaining quality, progress, and efficiency in the workplace Adhering to and effectively implementing these processes lays the foundation for achieving business objectives and ensures that the organization is moving in the right direction.
Always ensure there is a link between leadership, management and departments:
The performance of a company is significantly influenced by the relationships among leaders, managers, and various departments To maximize productivity, it's essential for leaders and managers to foster strong connections among team members Cultivating a positive workplace culture is crucial, as the effectiveness of leadership plays a vital role in encouraging collaboration across departments Ultimately, the willingness of team members to work together is largely determined by the influence of top leadership.
Effective collaboration and mutual support among department members are essential for a company's success Departments should encourage employees to complete tasks promptly and accurately, ensuring the continuous and timely circulation of documents and data.
Employees must exercise caution when issuing invoices, ensuring that they are clearly documented, detailed, and comprehensive In the event of an error, it is crucial to promptly inform the accounting department to prevent any miscalculations.
Upgrading machinery, office equipment, and support software is essential for enhancing business efficiency, reducing time and costs, and meeting the growing demands of the market Outdated devices can hinder tax compliance, particularly in today's landscape where online tax declaration software is commonly used.
Investing in new computer equipment and printers, along with upgrading to the latest accounting software, is essential for the company’s growth Additionally, considering higher-speed internet plans or switching internet service providers can significantly enhance network connection quality.
To enhance the efficiency of tax accountants, the office focuses on providing optimal working conditions and equipping them with modern computers and laptops that feature fast processing speeds This investment supports the seamless registration, declaration, and payment of taxes through electronic networks.
Regarding propaganda infrastructure: Improving the network system to ensure the submission of declarations, paying taxes to monitor the amount of tax payable, managing invoices pressed only online
3.2.4 Improve self-compliance with tax laws
Effective tax compliance heavily relies on the crucial role of managers, who must possess a solid understanding of tax regulations and demonstrate strong self-discipline in adhering to the law The desire for financial benefits from revenue or expense-related decisions directly influences tax liabilities It is essential to prioritize the spirit of the rule of law over personal interests, ensuring that tax compliance decisions are made correctly Business owners can enhance their compliance with tax laws by fully grasping the advantages of adhering to these laws and being aware of the penalties for non-compliance.
To maintain data accuracy and facilitate tax inspections, the company should consistently review and compare documents from both books and accounting software This regular practice ensures timely identification of discrepancies and simplifies the process of data retrieval when needed.
It is essential to promptly report any additional Corporate Income Tax (CIT) amounts that have been identified as errors within the last ten years, specifically before the tax declaration deadline is reviewed by inspectors During this period, the late payment fines will be minimized, and no further penalties will be imposed.
3.2.5 Group of professional solutions to learn and check
Recommendations for tax authorities
3.3.1 Supplementing and perfecting the tax administration law, tax policy, and guiding documents
Businesses face challenges in navigating a complex landscape of tax regulations, as numerous circulars and decrees from different years contain unclear, overlapping, or specific sections that complicate compliance To facilitate taxpayer adherence, it is essential to reform these intricate tax rules and regulations, which often lack synchronization and fail to align with socio-economic practices The goal is to improve the tax system by enhancing transparency, public understanding, clarity, and ease of execution, ensuring that tax policies are practical and accessible for all taxpayers.
- Reduce obstacles in circulating cash flow for investments and output by adding VAT refund criteria for businesses
3.3.2 Good management of taxpayers' registration, declaration and payment of taxes
- Further promote the work of enterprises across provinces and cities to make electronic tax declarations and payments and electronic tax refunds
- Tax authorities need to strengthen guidance for businesses to update the use of e-invoices, speeding up the application of e-invoices for businesses
To enhance the quality of registration management and tax identification number issuance, it is essential to proactively collaborate with the business registration department of the Department of Planning and Investment This coordination will ensure timely capture of taxpayer registration information for effective tax administration Additionally, it is crucial to strengthen oversight of changes in taxpayer tax signing information and to effectively implement the decentralization of management for newly established enterprises.
- Diversifying forms of tax payment in a modern way, convenient for both businesses and management agencies
3.3.3 Improving the efficiency of tax inspection and inspection
- Promote the implementation of risk management methods in all stages of inspection and inspection on the basis of the centralized database on taxpayers
- Mobilize more resources to focus on implementing inspection and inspection plans
- Focus on inspection and inspection in the fields of price transfer, e- commerce, enterprises dealing payments through banks with suspicious signs, large enterprises, foreign-invested enterprises
Modernizing tax inspection and management through the integration of information technology can enhance tax collection efficiency and uncover additional revenue sources across various sectors and tax categories.
- Classify tax payers in order to promptly detect new violations of the subjects, thereby strengthening the inspection and inspection to combat fraudulent acts
- Research, supplement and complete the inspection, inspection, professional handbooks as the basis, documents for training and uniform application in inspection activities
To ensure compliance with prescribed time limits, it is essential to urgently finalize conclusions from completed inspections This involves enhancing oversight and actively encouraging the implementation of recommendations and decisions regarding inspector actions Additionally, it is important to identify and clarify the reasons behind any delays or insufficient execution, while also proposing effective remedial measures to address these issues.
3.3.4 Renovation, promotion of propagation and support of taxpayers
- Organize dialogues, seminars, work with businesses and people in the area to remove difficulties and obstacles
- Organize many new tax policy training courses for taxpayers, regularly organize taxpayers support through many forms: direct support, by phone or answer tax policy in writing
To enhance the dissemination of new tax policy information, it is essential to strengthen the systematization and compilation of these contents This can be achieved through various channels, including websites and email communication, ensuring that all enterprises with email addresses linked to tax authorities receive the updates Additionally, it is crucial to publicly display the relevant propaganda materials at the one-stop departments of tax authorities at all levels, allowing taxpayers to access the information promptly.
- Coordinate with press agencies to propagate and disseminate tax laws
- Organize more press conferences, announce the results of implementation and implement measures for the next time, close, accompany the press agency in propagating tax policies
- Diversify the form of support through the classification of taxpayers according to each group of objects to apply appropriate forms and methods of support
- The propaganda must ensure the cover of information related to the activities of tax authorities throughout all regions and all areas of tax administration
To ensure effective communication of tax policies, it is essential to consistently utilize various platforms such as loudspeakers, electronic boards, and bulletin boards at one-stop departments Additionally, disseminating information through publications, leaflets, and dedicated sections on electronic websites will enhance public awareness and understanding of tax-related matters.
To effectively promote the application of information technology, it is essential to innovate methods and enhance communication strategies that maximize support for taxpayers This approach ensures that individuals and businesses can fully and promptly understand new tax policies across various stages, departments, and fields.
3.3.5 Reforming the organization of the apparatus, supplementing and improving the capacity and qualities of tax civil servants
Understanding the perspectives of the entire team of tax officials regarding the Party and State's policies is essential This involves aligning with the political framework while emphasizing practical application, reinforcing accountability, and enhancing discipline By fostering a dynamic and innovative workforce, we can achieve significant breakthroughs and fully commit to our responsibilities.
- Strengthen leadership, direct drastically, trade through guidance, check and urge the elimination of bad running, running rights, preventing and reversing the deterioration, negativity and corruption in cadres' work
- To promote the review, classification and restructuring of staff at all levels associated with the organization of the lean apparatus, effective and effective operation
Promoting the training and retraining of human resources is essential to cultivate specialized knowledge among young, qualified professionals This development is crucial for the reform and modernization of tax work, serving as a strong foundation for future advancements in the field.
Training personnel in specialized roles is essential for effective management under self-declaration and self-payment systems This training should equip officers with comprehensive knowledge and practical reasoning skills, enabling them to analyze and evaluate tax policy implementation effectively By doing so, it lays the groundwork for informed policy-making and the proposal of efficient tax management strategies.
To enhance the effectiveness of tax agencies, it is essential to bolster the political, ideological, and moral education of civil servants at all levels This involves cultivating ethical values, deepening their understanding of the nation's historical and cultural traditions, and integrating practical training with the principles and ethics inspired by Ho Chi Minh's teachings.
The assessment of cadres will be renewed based on specific criteria tailored to each product This process will involve conducting surveys, publicly sharing results, and making comparisons with equivalent titles Additionally, individual assessments will be linked to collective performance and the outcomes of tasks executed by localities, agencies, and units.
To establish a fair and effective salary reform, it is essential to create and execute a tailored roadmap that considers factors such as job position, title, labor productivity, work efficiency, and the socio-economic conditions of the country Additionally, implementing a reasonable and equitable reward system will promote healthy competition and motivation among employees.
To ensure effective tax administration, it is crucial to address violations with determination and uphold strict discipline Strengthening the leadership and guidance of Party organizations and State management agencies at all levels is essential for implementing action programs that foster significant improvements in tax operations.
3.3.6 Strengthen coordination among agencies, organizations and individuals in the social community on tax administration to improve tax compliance
Effective collaboration among tax departments is essential for efficiently gathering and processing information from various units This coordination helps diversify information sources and ensures timely access to data related to taxpayers and tax authorities.
- Coordinate tax collection between tax authorities - State Treasury - commercial banks, contributing to minimizing administrative procedures, improving tax collection efficiency
- Coordinate between competent agencies and organizations and relevant organizations and individuals in the process of investigating and handling enterprises that violate the provisions of tax law during operation
- Strengthen coordination with press agencies in propagating and disseminating tax policies and laws
3.3.7 Improving the efficiency of tax debt management
Group of Other Solutions
3.4.1 To propose to the State in general and Ha Noi Capital Tax Department in particular
Supporting enterprises in training, research, and implementation is essential for the advancement of accounting practices Rather than imposing strict regulations or policies on corporate accounting systems, it is advisable to provide only general concepts and reasoning to guide their development.
3.4.2 To propose to the board of directors of the company
To ensure proper document management, accountants should conduct monthly inspections of enterprise records, ensuring all necessary signatures from responsible parties are present It is essential to sequentially number receipts and cash expenditures to prevent confusion and loss This proactive approach not only aids in maintaining organized records but also simplifies future audits by tax authorities.
To enhance cash flow and improve capital efficiency, the company should implement an appealing early payment discount policy for customers This strategy not only incentivizes prompt payments but also shortens capital turnover time It is essential for the company to clearly outline the terms of the payment discount in the economic contract to ensure transparency and understanding.
To enhance its revenue streams, the company should diversify beyond its primary service offerings, which are currently limited Investing in joint ventures, securities, and expanding partnerships within the banking and insurance sectors can help stabilize and improve income While these activities may not serve as the main revenue source, they are crucial for economic integration with domestic and foreign companies Additionally, leveraging the stock market as a capital-raising platform can provide long-term funding for strategic initiatives, ensuring the company’s financial sustainability and growth.
To foster a thriving work environment, it is essential for company leadership to provide both material and spiritual support, including competitive salaries, bonuses, and favorable working conditions Ultimately, the organization must prioritize innovation and comprehensive reform while investing in facilities and creating a positive atmosphere that enables employees to work with peace of mind This approach encourages dedication and enthusiasm, driving the company towards greater strength and success.
VACO Auditing Company Limited specializes in auditing, tax, financial consulting, accounting, and valuation services The company's growth is driven by the dedication of its employees and management, as they strive to align with the broader economic development of the country Through innovation, VACO has made significant achievements, fulfilling its responsibilities to the state and enhancing the quality of life for its employees Notably, the company plays a crucial role in the success of economic and business management systems.
During my internship at VACO Auditing Company Limited, I conducted in-depth research on the company's tax compliance status to support my thesis titled "Tax Compliance at VACO Auditing Company Limited." This thesis aims to analyze and clarify key aspects of tax compliance within the organization.
The dissertation provides a comprehensive overview of tax compliance at VACO Auditing Company Limited, detailing key theoretical concepts, classifications, assessment criteria, and the various factors influencing taxpayer compliance.
From 2018 to 2021, an analysis of the tax compliance situation at VACO Auditing Company Limited revealed key shortcomings and identified the primary factors influencing tax compliance This assessment focused on evaluating the results achieved and understanding the underlying causes impacting the company's adherence to tax regulations.
The thesis outlines key solutions aimed at achieving its research objectives, focusing on enhancing organizational structure and human resources, as well as strengthening collaboration with the Tax Authority and related entities Additionally, it provides recommendations for the tax authorities to consider.
During my internship, I gained valuable insights into the model and practical work at the internship unit However, due to limited practice time and the constraints of my current knowledge, my thesis contains some errors I am eager to receive feedback from my teachers and the accounting department staff to improve my work.
I would like to extend my heartfelt gratitude to Assoc Prof Nguyen Thi Thanh Hoai for her enthusiastic guidance, as well as to the dedicated staff at VACO Auditing Company's accounting department Additionally, I am thankful to the teachers in the Tax and Customs Department and the school for their support, which enabled me to successfully complete my thesis Thank you sincerely!
1 Assoc Prof PhD Le Xuan Truong (2010), “Tax Administration
Curriculum”, Finance Publisher, Academy of Finance
2 Financial report (2017; 2018; 2019) - Hung Long Water and Electricity Construction JSC
3 Assoc Prof PhD Nguyen Thi Lien (2011), “Income Tax Curriculum”, Finance Publisher, Academy of Finance
4 Assoc Prof PhD Nguyen Thi Lien ; Assoc Prof PhD Nguyen Van Hieu (2014), “Taxation”, Finance Publisher, Academy of Finance
5 Assoc Prof PhD Ly Phuong Duyen (2013), “Taxation a university textbook”, Finance Publisher, Academy of Finance
6 Vu Tien Thang (2019), Tax Compliance at RSM Viet Nam Auditing& Consulting Limited, Graduation thesis, Academy of Finance
7 Website: www.tapchithue.com www.gdt.gov.vn www.mof.gov.vn
NHẬN XÉT CỦA NGƯỜI HƯỚNG DẪN KHOA HỌC
Họ và tên người hướng dẫn khoa học: PGS.TS Nguyễn Thị Thanh Hoài
Nhận xét quá trình thực tập tốt nghiệp của sinh viên: Nguyễn Như Quỳnh
Khóa: CQ56 Lớp: 02.02 Đề tài: “Tax comliance at VACO Auditing Company Limited”
Bằng chữ Người nhận xét (Ký và ghi rõ họ tên)