What should businesses prepare when the tax authority conducts a tax finalization?

Legal basis:

Consolidated Document 14/VBHN-VPQH in 2019, which consolidates the Accounting Law issued by the National Assembly Office. Decision No. 970/QD-TCT issued the tax audit procedures.

What should businesses prepare when the tax authority conducts a tax finalization?

In reality, periodic tax finalization is a task that no business desires to carry out, as it involves direct interaction with the tax authorities. When a business receives a tax finalization decision from the tax authorities, it should pay attention to preparing the necessary documents, records, and tasks, which specifically include:

1. What should businesses prepare when the tax authority conducts a tax finalization?

• Prepare the full legal documents of the business:

  • Business registration certificate.

  • Tax code information.

  • Company regulations.

  • Company charter.

  • Company financial regulations, including employee policies and salary structure.

  • Operational regulations for dependent units, such as branches, representative offices, production facilities, or warehouses (if any).

    
    

• Organize original documents:

  • Original documents should be arranged by month and in accordance with the sequence of the input and output tax reports, printed and submitted to the tax authorities monthly.

  • The monthly original documents must be accompanied by the monthly value-added tax declaration submitted to the tax authorities.

  • Note that each document or group of documents must be accompanied by:

    • Sales invoices with receipts (if any), contracts, warehouse delivery slips, and contract liquidation minutes (if any).

    • Purchase invoices with payment slips, payment requests, warehouse receipts, contracts, and contract liquidation minutes (if any).

  • All documents must have the required signatures according to their positions.

    
    

• Organize the reports already submitted to the tax authorities:

  • The reports include financial statements, corporate income tax finalization, personal income tax, and tax refund reports for each year.

  • Note that the documents for a given year must be accompanied by the corresponding annual reports.

    
    

• Prepare full books for the year:

  • General journal.

  • Purchase journal.

  • Sales journal.

  • Cash payment journal.

  • Cash receipt journal.

  • Detailed accounts payable for all suppliers.

  • Detailed accounts receivable for all customers.

  • Cash fund journal and detailed bank account journal.

  • Debt confirmation minutes for each party (if any) at the end of the year.

  • General ledger for all accounts, including 131, 331, 111, 112, 152, 153, 154, 155, 211, 214, 621, 622, 627, 641, 642, depending on Decision 48 or 15 of the business.

  • Summary of fixed asset increases and decreases.

  • Summary of tools and equipment increases and decreases.

  • Fixed asset depreciation book.

  • Tools and equipment depreciation book.

  • Inventory records for each warehouse.

  • Stock cards and detailed materials records.

Note: All entered documents must be printed out and signed properly.

• Organize contracts in chronological order: Each incoming and outgoing contract should be arranged by date. Verify and gather all documents related to the contract, including acceptance reports and contract liquidation documents (if any).

• Verify accounts payable and receivable: Check which amounts are owed to ensure that the input and output data match. Check the signatures and seals on all documents.

2. When will the tax authorities conduct a finalization at the business location?

According to Decision No. 970/QD-TCT in 2023, the tax authorities will conduct tax finalization at the business location in the following cases:

• Conducting tax record audits at the tax office.

• Conducting tax audits at the taxpayer’s office:

  • Auditing tax records.

  • For cases where records are subject to pre-refund tax audits; post-refund tax audits for records subject to tax refund first, as prescribed: Conduct audits at the taxpayer’s office.

  • If there are signs of legal violations through tax management, audits will be conducted at the taxpayer’s office.

  • Audits according to specific themes (e.g., selected based on a plan or issue decided by the superior tax authority; audits arising during the year as decided by the same-level tax authority): audits will be conducted at the taxpayer’s office.

  • If the taxpayer undergoes changes like mergers, separations, business model transformations, dissolution, termination of operations, privatization, tax code cancellations, or location changes resulting in a change of the tax authority managing the business: audits will be conducted at the taxpayer’s office (including sudden audits or audits directed by competent authorities).

  • Based on recommendations from the State Audit, State Inspection, or other competent authorities: audits will be conducted at the taxpayer’s office.

    
    

If you need a consulting unit with experience in tax matters, please contact us.