Tax comliance at VACO auditing company limited

MINISTRY OF FINANCE ACADEMY OF FINANCE - - NGUYEN NHU QUYNH CLASS: CQ56/02.02 GRADUATION THESIS TOPIC: TAX COMPLIANCE AT VACO AUDITING COMPANY LIMITED Major : Taxation Code : 02 Superviror : Assoc.Prof Nguyen Thi Thanh Hoai HA NOI - 2022 i DECLERATION While studying at the Academy of Finanace and studying graduate thesis, I have received a lot of support from school, family, agencies, teachers and friends In order to complete the graduation thesis, in addition to my serious investment, I also received a lot of support and help from everyone By the way, I would like to thanks the teachers Assoc.Prof.Dr Nguyen Thi Thanh Hoai forr enthusiastically guiding my graduation thesis The management board and the brothers and sisters at the VACO Auditing company limited helped me during my internship at the company as well as provided the necessary documents for me to complete the thesis Teachers, family and friends encouraged me in the process of the dissertation I appreciate thesupport, help and encouragrment from my teachers, family and friends Thank you very much Thesis’s author Nguyen Nhu Quynh ii TABLE OF CONTENTS DECLERATION i TABLE OF CONTENTS ii LIST OF ACRONYMS v LIST OF TABLES vi INTRODUCTION 1 The necessity off the thesis Objectives of the thesis Object of thesis Scope of thesis Research methodology Structure of the thesis CHAPTER 1: TAX OVERVIEW AND TAX COMPLIANCE OF ENTERPRISE 1.1 Tax overview 1.1.1 Definition of tax 1.1.2 Characteristic of tax 1.1.3 The roles of tax 1.2 Theoritical background of tax compliance of enterprises 1.2.1 Overview of enterprices 1.2.2 Overview of tax compliance of enterprises 11 CHAPTER 2: ACTUAL SITUATION OF TAX COMPLIANCE AT VACO AUDITING COMPANY LIMITED 39 2.1 Overview of VACO Auditing Company Limited 39 2.1.1 The history of VACO Auditing Co., Ltd.'s formation and growth 39 2.1.2 The organizational structure of the company 41 iii 2.1.3 Services provided by VACO Auditing Company Limited 43 2.1.4 Overview of business operation of VACO Auditing Company Limited last three years 46 2.2 Actual situation of tax compliance of VACO 47 2.2.1 Tax Registration 47 2.2.2 Tax declaration and calculation 49 2.2.3 Status of tax payment obligations 58 2.3 General assessment of compliance with tax obligations of VACO Auditing Co., Ltd 58 2.3.1 These achievements 58 2.3.2 Limitations and reasons 59 CHAPTER 3: RECOMMENDATIONS AND SOLUTIONS TO IMPROVE TAX COMPLIANCE AT VACO AUDITING LIMITED COMPANY 61 3.1 Operation orientation and development goals of VACO Auditing Co.,Ltd 61 3.1.1 Operation orientation of VACO Auditing Co.,Ltd 61 3.1.2 Development goals of VACO Auditing Company Limited 62 3.2 Solutions to fulfill tax obligations of VACO Auditing Co., Ltd 62 3.2.1 Group of solutions on personnel organization and resources 62 3.2.2 Improve operational coordination among relevant departments 63 3.2.3 Improving the Company's facilities 64 3.2.4 Improve self-compliance with tax laws 65 3.2.5 Group of professional solutions to learn and check 66 3.3 Recommendations for tax authorities 67 3.3.1 Supplementing and perfecting the tax administration law, tax policy, and guiding documents 67 3.3.2 Good management of taxpayers' registration, declaration and payment of taxes 67 iv 3.3.3 Improving the efficiency of tax inspection and inspection 68 3.3.4 Renovation, promotion of propagation and support of taxpayers 69 3.3.5 Reforming the organization of the apparatus, supplementing and improving the capacity and qualities of tax civil servants 70 3.3.6 Strengthen coordination among agencies, organizations and individuals in the social community on tax administration to improve tax compliance 72 3.3.7 Improving the efficiency of tax debt management 72 3.4 Group of Other Solutions 73 3.4.1 To propose to the State in general and Ha Noi Capital Tax Department in particular 73 3.4.2 To propose to the board of directors of the company 73 CONCLUSION 75 REFERENCE 77 v LIST OF ACRONYMS Co., Ltd Limited Company CIT Corporate Income VAT Value Added Tax PIT Personal Income Tax vi LIST OF TABLES Figure 2.1: Company Structure 41 Table 2.1: VACO Auditing Company Limited in the period of 2018 2020 and 2021 has the following financial results: 46 Table 2.2: Situation on the company's value - added tax declaration for the period 2018 - 2021 50 Table 2.3: Statistic of VAT amount of VACO Auditing Company Limited for the period 2018 - 2021 52 Table 2.4: Statistic of CIT amount of VACO Auditing Company Limited for the period 2018 - 2021 54 Table 2.5: Statistic of PIT amount of VACO Auditing Company Limited for the period 2018 - 2021 57 INTRODUCTION The necessity off the thesis Tax is an important source of revenue for the state budget The functioning of the state apparatus is also supported by the tax revenue Tax is an important tool to contribute to encourage and promote production and business development in the direction of the State's comprehensive planning, strategy and development To contribute to the state budget, businesses must pay taxes incurred in the course of production and business The compliance of businesses with tax obligations will contribute to increasing revenues for the state budget, regulating macroeconomics, redistributing income, ensuring social justice However, many businesses still make mistakes in the process of tax declaration, calculation and payment In addition, some businesses are trying to find ways to reduce taxes and evade corporate income tax, causing revenue losses to the state budget For VACO Auditing Company Limited, the compliance with tax obligations is strictly and timely implemented by the company However, in the process of tax complicane, there are also some difficulties and obstacles From the above reasons, I decided to choose the topic: “Tax comliance 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 2021 proposed solution to 2025 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 - In order to assess the tax compliance status of enterprises in Viet Nam and the factors affecting the tax compliance of enterprises in Viet Nam, the thesis used the method of: Assessment by data on the results of production and business activities of enterprises and 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 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 Company Limited CHAPTER TAX OVERVIEW AND TAX COMPLIANCE OF ENTERPRISE 1.1 Tax overview 1.1.1 Definition of tax According to the MC Milan Dictionary of Accounting, “Taxes are compulsory levies made by public authorities for which nothing is received directly in return They are used in part to provide public goods” The Longman Dictionary of Business English defines tax as “A payment of money legally demanded by a government authority to meet public expenses” According to the curriculum of the Academy of Finance, tax is a part of income which is legally stipulated and compulsorily paid by citizens to the government in order to finance the public expenditure 1.1.2 Characteristic of tax From the concepts of tax mentioned above, the following characteristics can be seen: Firstly, tax is compulsory payment This compulsory nature is attached to the power of the government The way to tax is very different from the way to get many other revenues of the government which can be got voluntarily such as the sale of government‟s properties, loans, grants or donations, etc If taxes were paid voluntarily, very few people would pay because they would get no direct benefits in exchange for paying taxes But unlike fines, taxes are not paid as punishment for breaking a law or rule The payment of taxes is not accompanied with the law violations but the apparent responsibility of the citizens to the state 67 The compliance with the current accounting regime is reflected from the compliance with the user accounts, accounting methods and procedures to the use of the accounting book system and the preparation of reports, which must be suitable with the business characteristics of the Company 3.3 Recommendations for tax authorities 3.3.1 Supplementing and perfecting the tax administration law, tax policy, and guiding documents - To deal with a certain issue, businesses must understand an excessive number of tax circulars and decrees Tax regulations and standards are dispersed throughout several circulars and decrees from various years, and certain sections are unclear, particular, or overlapping, making implementation difficult for firms To establish favorable conditions for taxpayers to comply with taxes, it is required to alter complicated tax rules and regulations, lack of synchronization, not related with socio-economic practices, and not scientific Aiming to enhance the tax system in terms of openness, public awareness, clarity, simplicity of understanding, and ease of execution, as well as ensuring that tax policies are feasible - 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 68 - Improve the quality of registration management and issuance of tax identification numbers by proactively coordinating with the business registration department of the Department of Planning and Investment in issuing tax identification numbers, capturing registration information of taxpayers to put into the tax administration in a timely manner At the same time, strengthening control over the change of taxpayers tax signing information, well implementing the decentralization of management of 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, ecommerce, enterprises dealing payments through banks with suspicious signs, large enterprises, foreign-invested enterprises - Modernize the inspection and inspection through the application of information technology in the management of tax collection as well as exploit more tax revenue sources in many fields and taxes - Classify tax payers in order to promptly detect new violations of the subjects, thereby strengthening the inspection and inspection to combat fraudulent acts 69 - Research, supplement and complete the inspection, inspection, professional handbooks as the basis, documents for training and uniform application in inspection activities - Urgently issue conclusions for the inspections that have ended, ensuring the prescribed time limit Strengthen monitoring, urging the implementation of recommendations and decisions on handling sua inspectors, clarifying the reasons for slow or not thorough implementation, and at the same time making recommendations and proposing remedial measures 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 - Strengthen the systematization, compilation and transmission of new tax policy contents through many forms such as website, email (email) to 100% of enterprises with email addresses connected to tax authorities; publicly listed at the one-stop department of tax authorities at all levels the propaganda content for taxpayers to grasp in a timely manner - 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 70 - 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 - Continue to maintain and effectively implement the propagation of tax policies and tax work on the loudspeaker system at the premises, on electronic boards, bulletin boards at the one-stop department, through publications, leaflets propagating tax policies, on electronic websites - Promote the application of information technology effectively, innovate methods, promote propaganda, maximum support for taxpayers in the stages, departments and fields to help taxpayers fully and timely grasp new tax policies 3.3.5 Reforming the organization of the apparatus, supplementing and improving the capacity and qualities of tax civil servants - Thoroughly grasping the thoughts of the entire team of tax officials on the policies and guidelines of the Party and The State, consistent in the political system associated with practice, binding responsibilities, tightening discipline and discipline, creating a dynamic and creative cadre, Breakthrough, give your all - 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 71 - To promote the review, classification and restructuring of staff at all levels associated with the organization of the lean apparatus, effective and effective operation - To promote the training and retraining of human resources, foster specialized knowledge for young, well-qualified cadres, capable of development, as the foundation for the reform and modernization of tax work - It is necessary to train cadres in the direction of deep specialization according to each function, tasks and work in accordance with the management mechanism of self-declaration, self-declaration, self-payment, equipped with full knowledge of practical reasoning, ensuring that officers have good capacity in analyzing and evaluating the implementation of tax policies, set the stage for policy making as well as proposing effective tax management measures - Along with improving the capacity of cadres, it is also necessary to strengthen political, ideological and moral education for civil servants and officials at tax agencies at all levels, cultivate ethics, understand the historical and cultural traditions of the nation; combining training in practice and promoting learning, following Ho Chi Minh's ideas and ethics - Renewing the assessment of cadres according to specific criteria, by product, through surveys, publicizing results and comparing with equivalent titles; linking individual assessments with collectives and results of performing tasks of localities, agencies and units - Develop and implement a roadmap for salary reform suitable to each object according to position, title, position, labor productivity, work efficiency and socio-economic development conditions of the country, Reward emulation mode, reasonable, fair 72 - Resolutely handle violations strictly, maintain discipline and discipline, Strengthen the leading and directing role of Party organizations and State management agencies at tax agencies at all levels in implementing action programs to create positive changes in tax work 3.3.6 Strengthen coordination among agencies, organizations and individuals in the social community on tax administration to improve tax compliance - Closely coordinate between tax departments, tax departments and tax departments in capturing information at units to diversify sources and promptly grasp and process information directly or indirectly 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 - Tax authorities shall monitor and control all enterprises and individuals owed taxes, classify tax debts, issue notices of debt urging, collect debts with subjects and apply measures to enforce tax debts according to the right subjects and legal procedures 73 - Strengthen the monitoring of the current situation of tax obligations and tax debt situation of each taxpayer in order to accurately determine the late payment fine of each debt To promote coordination between functional departments of the Tax Department and the Tax Sub-Department to the State Treasury to overcome the situation of tax money paid to the budget but still waiting for adjustment - Timely reward exemplary taxpayers to encourage and motivate taxpayers to continue to implement the tax law policy and fulfill its obligations to the State, spread widely the acts of tax compliance to the whole society and build a professional image of tax authorities to the taxpayers community - Publicly criticize and condemn violations through the tax authorities publicizing the list of enterprises, organizations and individuals that owe taxes in order to deter, as well as create fairness among taxpayers 3.4 Group of Other Solutions 3.4.1 To propose to the State in general and Ha Noi Capital Tax Department in particular It is necessary to support enterprises in training, researching and implementing Development of accounting; It is not recommended to force and interfere too deeply in the accounting work with accounting policies or regulations in the corporate accounting system but only at the publication of concepts and general reasoning 3.4.2 To propose to the board of directors of the company - Recommendations on the inspection, preservation and storage of documents: Every month, accountants should check the system of documents and books of enterprises to fully supplement the signatures of the responsible people involved Some receipts and cash expenditures need to be numbered in 74 a row to avoid confusion and loss, Therefore, accountants should check to supplement to facilitate the inspection of tax authorities later - Recommendations on sales policy: The company should offer a reasonable and attractive payment discount policy for customers when customers pay early Thereby encouraging customers to pay early, shorten the time of capital rotation, improve the efficiency of capital use in business for the company, To make a payment discount, the company needs to clearly state the payment discount in the economic contract - Recommendations on the company's revenue source: The main source of revenue of the company is the provision of services, very limited Therefore, in order to promote the ability of enterprises to integrate economically with other domestic and foreign companies, the company should invest in other activities such as: joint venture capital contribution, securities investment, expanding the scope of partner enterprises to the banking and insurance sectors Although this may not be the main source of revenue, it is necessary to contribute to improving and stabilizing the company's income Moreover, in the future, the stock market is a place to raise capital very effectively for any company, the capital is obtained to help businesses use for a long time, for the right purpose - Besides, it is also necessary to have the attention and facilitation of the director in all aspects both materially and spiritually such as salary, bonus, favorable working conditions for employees in the company In short, the Company needs to have innovation, complete reform, invest more in facilities as well as the spirit to create conditions for employees in the Company to work with peace of mind, devote their efforts and enthusiasm to build the company more and more strong 75 CONCLUSION VACO Auditing Company Limited is an enterprise operating in the field of auditing, tax, financial consulting, accounting, valuation, The development of the company today is a continuous process of striving for all employees and the board of directors of the company The company always tries to find all measures to integrate its steps with the general development rhythm of the country's economy Along with creativity, the company has achieved many significant achievements, fulfilling its obligation to contribute to the state, constantly improving the lives of its employees In particular, it is impossible not to mention an important contribution to the success of the economic management and business management system During my internship at VACO Auditing Company Limited, I researched and studied documents related to the company's tax compliance situation to complete my thesis with the topic "Tax Compliance at VACO Auditing Company Limited” The thesis has focused on researching, analyzing and clarifying the following basic contents: Firstly, the dissertation summarized, systematized, developed and supplemented the theoretical issues on tax compliance VACO Auditing Company Limited such as the concept, classification, and assessment criteria, factors affecting tax compliance of taxpayers Secondly, studying the situation, assessing the achieved results, some shortcomings and the main causes of the tax compliance situation and the reality of the factors affecting the tax compliance of VACO Auditing Company Limited in the period of 2018 - 2021 Thirdly, on the basis of a number of perspectives and orientations, the thesis proposes basic solutions towards the research objectives such as 76 improve organizational structure and human resources, strengthen links with the Tax Authority and the relevant units Besides, make recommendations to the tax authorities This is the result during the internship and practice, learning about the model and working at the internship unit However, due to the fact that the practice time is not much and the knowledge is still within a certain framework, my thesis cannot avoid mistakes I look forward to receiving the advice of the teachers in the school and the staff in the accounting department Finally, I would like to express my sincere thanks to the enthusiastic guidance of Assoc.Prof Nguyen Thi Thanh Hoai, and all employees at the accounting department of VACO Auditing Company Limited Beside, I would like to thank all the teachers in the Tax and Customs Department and the school for creating favorable conditions for me to complete this thesis Thank you sincerely! 77 REFERENCE Assoc Prof PhD Le Xuan Truong (2010), “Tax Administration Curriculum”, Finance Publisher, Academy of Finance Financial report (2017; 2018; 2019) - Hung Long Water and Electricity Construction JSC Assoc Prof PhD Nguyen Thi Lien (2011), “Income Tax Curriculum”, Finance Publisher, Academy of Finance Assoc Prof PhD Nguyen Thi Lien ; Assoc Prof PhD Nguyen Van Hieu (2014), “Taxation”, Finance Publisher, Academy of Finance Assoc Prof PhD Ly Phuong Duyen (2013), “Taxation a university textbook”, Finance Publisher, Academy of Finance Vu Tien Thang (2019), Tax Compliance at RSM Viet Nam Auditing& Consulting Limited, Graduation thesis, Academy of Finance Website: www.tapchithue.com www.gdt.gov.vn www.mof.gov.vn NHẬN XÉT CỦA NGƯỜI HƯỚNG DẪN KHOA HỌC Họ tên người hướng dẫn khoa học: PGS.TS Nguyễn Thị Thanh Hoài Nhận xét trình thực tập tốt nghiệp sinh viên: Nguyễn Như Quỳnh Khóa: CQ56 Lớp: 02.02 Đề tài: “Tax comliance at VACO Auditing Company Limited” Nội dung nhận xét: Điểm: Bằng số Bằng chữ Người nhận xét (Ký ghi rõ họ tên) NHẬN XÉT CỦA NGƯỜI PHẢN BIỆN Họ tên người phản biện: Nhận xét trình thực tập sinh viên: Nguyễn Như Quỳnh Khóa: CQ56 Lớp: 02.02 Đề tài: “Tax comliance at VACO Auditing Company Limited” Nội dung nhận xét: Điểm: Bằng số Bằng chữ Người nhận xét (Ký ghi rõ họ tên) ... 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 Company Limited. .. their sense of tax compliance 39 CHAPTER ACTUAL SITUATION OF TAX COMPLIANCE AT VACO AUDITING COMPANY LIMITED 2.1 Overview of VACO Auditing Company Limited 2.1.1 The history of VACO Auditing Co.,... TAX COMPLIANCE AT VACO AUDITING LIMITED COMPANY 61 3.1 Operation orientation and development goals of VACO Auditing Co.,Ltd 61 3.1.1 Operation orientation of VACO Auditing Co.,Ltd