Improving personal income tax collection control for foreign workers the case of division of hanoi tax

Cohort 2015– 2017 Master’s Thesis Improving Personal Income tax Collection Control for foreign workers- the case of Division of Hanoi Tax By Author: Duong Thanh Tung Intake:FBA7 Supervisor: Dr Nguyen Vu Hoang Hanoi, June 2017 Table of Contents LISTS OF ABBREVIATION Acknowledgement Heading 1.Reasons for choosing research topics: Research objectives of the project: Research results: The urgency of the topic 11 Purpose of the study 12 The subject matter of the thesis study 12 Research Methodology 12 Research questions 12 Name and structure of the thesis 12 CHAPTER 1: THEORETICAL STRUCTURE OF COLLECTION PERSONAL INCOME TAX FOR FOREIGN WORKERS COMING TO WORK IN VIETNAM AND THE NEED OF PERFECT CONTROL COLLECTION PERSONAL INCOME TAX FOR FOREIGN WORKERS WORKING IN VIETNAM 14 1.1 Overview of PIT 14 1.1.1 The role of the state in the market economy, taxation, the concept of personal income tax 14 1.1.2 Concept, impact of PIT 15 1.1.3 Principles and methods of personal income tax 15 1.1.4 Role and characteristics of PIT 18 Characteristics of PIT 18 Role of PIT 19 1.2 Definition Control: 20 1.2.1 Control of personal income tax collection 24 1.2.2 Requirements, principles of tax collection control 25 1.3 The need to improve PIT collection control for foreign workers in Vietnam 26 CHAPTER 2: STATUS OF CONTROL COLLECTION PERSONAL INCOME TAX IN VIETNAM BY DIVISION OF HANOI TAX 28 2.1 The status of PIT collection control for foreign workers coming for working in Vietnam 28 2.1.1 General provisions 28 2.1.2.Tax administration of foreigners in Vietnam 38 2.2 Organization of the tax administration 38 2.2.1 General Department of Taxation 38 2.2.2 Division of Hanoi Tax 39 2.3.1 Organizational structure 40 2.2.3 The control of personal income tax collection in Hanoi 46 2.3 Evaluate the results, identify the causes and constraints 48 2.3.1 Cause 48 2.3.2 Complete the tax policy system 48 2.3.3 Administrative reform has been reformed more rationally: 48 2.3.4 Promote information technology application in all stages of PIT collection control 49 2.3.5 The capacity of the tax administration is further enhanced 49 2.4 Comments - general evaluation 70 CHAPTER 3: ORIENTATIONS AND SOLUTIONS FOR THE COMPLETENESS OF PERSONAL INCOME TAX CONTROL COLLECTION WITH FOREIGN WORKERS COMING FOR WORKING IN VIETNAM BY DIVISION OF HANOI TAX 72 3.1 Views and goals complete 72 3.2 Advantages and difficulties in improving the control of collection PIT for foreign workers coming for working in Vietnam by Division of Hanoi Tax 73 3.2.1 Advantages 73 3.2.2 Difficulties 74 3.3 Solution to improve the control collection of personal income tax of foreign workers coming for working in Vietnam 77 3.3.1 Reduction of personal income tax rate 77 3.3.2 Solutions to sign more agreements to avoid overlapping taxation among countries, expand international cooperation with foreign tax authorities 78 3.3.3 Strengthen coordination between tax authorities and public security organs, Department of Labor, Invalids and Social Affairs, Department of Industry and Trade on the control of foreign wokers entering Vietnam 79 3.3.4 Solutions to strengthen the control of income of foreign workers coming to Vietnam for working - Encourage the payment via banking 81 3.3.5 Modernize the tax administration system based on the application of information technology achievements 83 3.3.6 Enhance the compliance of taxpayers on the basis of expanding taxpayer support services and intensifying tax inspections 86 3.3.7 Solutions to further strengthen the organizational structure when implementing the above solutions 90 CONCLUSIONS 91 APPENDIX 96 LISTS OF ABBREVIATION TT Abbreviation Meaning WTO World Trade Organisation TNCN Personal income CQCT Cơ quan chi trả NNT Tax Payer NNN Foreign workers have income in Vietnam NSNN Budget Nation TNDN Income for Corporation PIT Personal income tax GTGT Value added 10 DN Business 11 CNTT Information technology Acknowledgement In the process of implementing my graduation paper, I have received lots of help, encouragement and experiences from teachers and frienders Especially, my graduation subject now is completed successfully thanks to all teachers’ support in International School of Hanoi National University First of all, I would like to express my gratitude to my supervisor Mr Nguyen Vu Hoang Dr who has generously given me invaluable assistance and guidance without his help, my research would have never been succesfully completed Besides, my sincere thank is also extended to all the teachers in International School of Hanoi National University for their lectures supporting this study, simultanously, my thank to all the students who help me fulfill the survey questionaire Last but not least, I am grateful to my family and friends who have given me such encouragement during the time to carry out this paper Within the framework of a master's thesis, there is a limited degree and duration of study, although the author has made many efforts but inevitably the shortcomings and limitations The author wishes and hopefully receive the input of researchers, policies maker, teachers and others interested in the field of tax administration in the hope that the thesis can contribute more to the award The method to enhance tax administration of foreign workers to Vietnam for work in Hanoi To improve the efficiency and quality of Control collection Personal Income Tax of foreign workers coming to Vietnam for their work as well as in the future Hanoi, June, 2017 Author Heading 1.Reasons for choosing research topics: Over the past few years, the Party and State have promoted industrialization and modernization of the country in the context of deepening international economic integration With the rapid development of the economy and the expansion of the labor market, the increase in high-income jobs is a major factor contributing to the increase in income of all classes of the population Individuals are increasingly diverse, so taxpayers are more diversified Implementing the socio-economic development plan for the period 2011-2020, the financial, monetary, capital, labor, real estate, science and technology markets will develop stronger Economic candles will continue to grow rapidly, creating conditions for organizations and individuals to have the opportunity to invest, produce and trade, and have different sources of income In addition, along with the process of international economic integration, the number of foreigners coming to Vietnam to work or invest in Vietnam has increased In 2007, Vietnam joined the WTO According to statistics, the number of nonresidents in Vietnam has increased rapidly in Vietnam The diversity and increased income of non-residents in Vietnam increases the amount of PIT paid into the state budget and occupies an increasing share With the fast developing trend of countries in the world, it is very important to study and apply a PIT policy suitable to the conditions of our country In the process of reform and international integration in the field of tax administration, implementing the tax collection reform strategy in Vietnam until 2020, the tax department of Vietnam is gradually completing the mechanism of self- To pay taxes on the basis of increasing the information application, promoting propaganda, taxpayers' support services and tax inspections to improve voluntary compliance of tax payers and modernize tax administration The Control of personal income tax of foreign workers in Vietnam because the work despite the results are certain but still encountered many difficulties, obstacles need to remove as well as contain many inadequacies Mechanism of management, management technology, apparatus and management personnel need to be overcome To properly and fully collect and collect timely and still create favorable conditions for encouraging foreigners in Vietnam to maintain and expand their business and investment in Vietnam, thus reducing the burden on tax administration It is imperative for the non-resident to come to Vietnam to work concurrently with the double taxation treaties signed between Vietnam and other countries Therefore, it is necessary to continue reforming the tax system to overcome these shortcomings and weaknesses, to introduce a tax revenue management model for the above objects as appropriate to objective conditions as well Material balances allow is an urgent issue set out These things need to have a thorough research, thorough analysis, science, comprehensive That is also the content of the thesis topic of the author Through the process of actual work at the personal income tax control office of the Divison of Hanoi Tax, the author has recognized the difficulties and challenges of tax administration of foreigners coming to Vietnam for working Therefore, the research on the theme "Improving Personal Income tax Collection Control for foreign workers in Vietnam" has practical and urgent significance in terms of theory and practice Research objectives of the project: The purpose of this study is to clarify general issues about the tax administration process, both theoretical and practical of the tax administration process of foreign workers coming to Vietnam for their current work in Hanoi, pointed out the advantages and disadvantages, the remaining issues need to be further improved On the basis of theoretical and practical experience in tax reform reform of some countries in the world, the requirements set out in the tax system reform program, the topic will propose some solutions to complete Improve the tax administration process to suit this type of taxpayers in Hanoi Research results: Based on the actual control of personal income tax of foreigners coming to Vietnam on the job at the Division of Hanoi Tax, the control of foreigners come to Vietnam by the authorities; Comparing information on foreign tax payers coming to Vietnam for work on the computer system of Division of Hanoi Tax with information on foreigners earning income in Vietnam of the Administration Immigration, immigration management department - Hanoi Police, the author has studied, analyzed, compared, commented, assessed the role, impact and impact of the PIT law on people Foreigners earn income in Vietnam Research results show that: The current state of tax administration of agencies and organizations with foreigners working and foreigners earning income in Vietnam from 2013 to 2016 Through analysis and assessment of real situation of tax administration of taxpayers on The thesis has pointed out the strengths of control as the tax policy system has been improved, the administrative procedures have been reformed more rationally, stepping up the application of information technology to all control stages The collection of personal income tax, the capacity of tax administration has been further enhanced, the implementation of propaganda and support on personal income tax and tax collection These causes have been shown through the tax rate of foreign workers coming to Vietnam because of the work paid into the state budget has increased over the years At the same time, the thesis also pointed out the shortcomings in tax administration for foreign workers coming to Vietnam for working because of the high tax rates of non-residents; Taxpayers are not fully managed The cause of the tax loss of foreigners in Vietnam is due to: the tax authorities can not manage the number of foreign workers in Vietnam working at agencies and organizations; Can not manage the income of foreign workers coming to Vietnam for working; Infrastructure, computerization of tax administration is incomplete; The propaganda to support the taxpayer has not achieved high efficiency; The capacity of PIT inspection is still limited As a result, the proportion of PIT to foreigners coming to Vietnam for working as a result of the work on the total PIT has been low, the number of foreigners coming to Vietnam for working by the Hanoi Tax Department The reason is not commensurate with the number of foreign workers coming to Hanoi for working The number of PIT losses from the above objects still high, causing losses to the State budget; It is unfair to have foreign workers with incomes in Vietnam and Vietnamese working abroad Since then, the author has made a general assessment of the tax collection control of foreign workers coming to Vietnam for working: The above work has also achieved results: the number of agencies and organizations with foreigners work for , Foreigners in Vietnam voluntarily declare tax However, the following causes have limited the results achieved on: PIT rates for non-resident foreigners are still high in Vietnam, the number of double taxation avoidance treaties signed between Vietnam and Low countries, the current legal documents have not created favorable conditions for the control of tax collection for foreigners in Vietnam and infrastructure for the control of personal income tax collection for Foreigners come to Vietnam because the work of the tax industry in particular and of the whole society in general is still weak and does not meet the requirements of tax collection control From the above analyzes, the thesis gives basic insights and directions to enhance the control of collection PIT for foreign workers coming to Vietnam for working In order to come up with feasible solutions that are appropriate to the actual conditions in Vietnam, the author considers the current socio-economic environment in Viet Nam, identifying the advantages and disadvantages of the subject as well as the client For improving the tax collection control of foreign workers coming to Vietnam for working, then boldly propose basic and synchronous solutions that can be applied on all contents of the administration Taxation: tax policy recommendations, organizational structure; Counseling, taxpayer support; Intensify inspections; To apply information technology, strengthen the coordination and exchange of information with relevant functional agencies, sign more agreements to avoid overlapping tax calculation among countries, expand international cooperation with the relevant agencies Foreign taxation, enhancing the control of income of foreigners coming to Vietnam for working - encourage payment tax via banking The above solutions will contribute to improve the efficiency of the collection of PIT for foreign workers with incomes in Vietnam, ensuring high efficiency and feasibility and raising the tax administration skills of Vietnamese tax authorities Since this is a complex and relatively new problem for Vietnam, it is related to Vietnam's international economic integration process, within the framework of a master's thesis, limited by its level and age Study time, although the author has made many efforts but inevitably the shortcomings, limitations The author wishes and hopefully receive the input of researchers, teachers and others interested in the field of tax administration in the hope that the thesis can contribute more to the award The method to enhance tax administration of foreign wokers to Vietnam for working in [39c] House area (m2 of floor): [39d] The origin of the house Self built[39d.1] Year of Completion (or Start of Home Use): Transfer[39d.2] Time of house transfer: [39e] House value: co V REVENUE FROM REAL ESTATE TRANSFERRING; FROM THE INFLUENCE OF INHERITANCE, GIFTS IS REAL ESTATE [40] Type of income [40a] Income from transfer of real estate [40b] Income from inheritance, gifts [41] Price of transfer of real estate or property value inherited, gifts: [42] Tax-free income: [43] Personal income tax payable on transfer of real estate: {[43] = ([41] - [42]) x 2%}: ……………………………………….Dong [44] Personal income tax payable on inheritance, gift is real estate: {[44] = ([41] - [42] -10,000,000) x 10%}: Taxpayers' co-pay tax (filed only in the case of co-ownership or tax exemption with single home): First and last name No Tax code Ownership (%) Payable tax amount (Dong) Individuals are exempt from single housingfirst … VII SCHEDULES INCLUDED INCLUDE: I declare that the contents declared are correct and take responsibility before law for the contents declared ……,day month Year… STAFF DUTY AGENCYTAXPAYER (INCLUDING CERTAIN OWNERSHIP (if any)) 132 or First and last name: ………………LEGAL REPRESENTATIVE OF THE TAX PAYER Practicing certificate number: .Sign, write full name; Position and stamp (if applicable) B PROOF OF REAL ESTATE VALUE AND TAX CALCULATION OF TAX AUTHORITIES Name of Taxpayer: Tax identification number (if any): I TYPE OF REAL The right to use land and assets attached to land The right to own or use housing The right to rent land and water surface Other real estate II CHARACTERISTICS OF REAL ESTATE TRANSFER Land parcel number: Map number: House number, street Village Wards: District City / Province Type of land: Type of sugar / region: Location (1, 2, 3, ): House level: House type: Home: The percentage (%) of the remaining quality of the home: The area of вЂ