Time when the tax authority has the right to check the bank accounts of business households and individuals

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The tax authority can check the bank accounts of households and individuals doing business if the taxpayer is classified as high-risk or shows signs of violating tax obligations.

What is risk management in taxes?

According to Circular 31/2021/TT-BTC of the Ministry of Finance, applying risk management in tax management is the use of professional, technical and technological measures by tax authorities to assess the level of tax compliance of taxpayers.

The assessment results will be the basis for the tax authority to decide whether or not to implement measures such as inspection, examination, verification or supervision. Risk management aims to improve tax management efficiency, while creating conditions for taxpayers to comply with the law.

How will individuals and business households be subject to risk management?

According to Article 15 of Circular 31/2021/TT-BTC, taxpayers are individuals with 3 risk classification groups: high, medium and low. Depending on the group, the tax authority will apply different management measures.

1. Business households and individuals:

- High risk:

Information was reviewed and verified to re-determine revenue and tax rates;

A list may be made for the tax authority to conduct a field survey;

The tax compliance of the entire relevant organization (if any) can be checked.

- Average risk:

randomly selected in the revenue survey list;

Continue to be reclassified in the next assessment.

- Low risk:

Not being directly inspected;

The records are kept and continue to be classified periodically.

2. Individuals with income subject to personal income tax (excluding business):

- High risk:

Being included in the list of inspections and verification of reality;

The tax authority conducts the inspection according to current regulations.

- Mid- and low-risk:

Only keep records, do not check the actual situation;

Continue the assessment in the next session.

Individuals with income through payment institutions (such as businesses) will be indirectly controlled through the risk assessment of the income payment institution.

3. Individuals with income related to land and assets attached to land:

- High risk:

Tax authorities analyze records and plan inspections at headquarters;

Check the tax declaration records of relevant individuals and organizations.

- Mid- and low-risk:

save the file, continue classifying for the next session.

Principles of tax risk assessment and application

According to Article 4 of Circular 31, risk management must ensure the following principles:

Ensure the effectiveness and efficiency of tax management but still encourage taxpayers to voluntarily comply;

Risk management information is collected from many sources: within the tax industry, other authorities, even from abroad;

The classification of risk levels is done automatically and periodically, based on data and specific criteria in the Circular;

Tax authorities shall base on the assessment results to issue inspection, examination and supervision decisions; Develop a plan to improve compliance with each risk group.

When is the tax authority allowed to check the bank account?

Bank account checking is not done widely but must have a clear professional basis.

When taxpayers are classified as high-risk, have signs of reporting lack of revenue, tax evasion, or have unusual transactions, the tax authority can access bank account information through coordination with credit institutions.

In special cases, such as real estate transfer, receiving rent, online sales, if there is a difference between the actual transaction amount and the tax declaration number, the bank account can be checked to verify the source of income and the basis for tax calculation.

What if the risk system is faulty or does not meet the conditions for automatic classification?

In case the automatic assessment system has a problem or does not meet the requirements, risk management will be done manually. Specifically, tax officials will prepare a proposal document and submit it to the competent authority for approval to apply professional measures according to regulations.

If the information about the taxpayer changes and affects the classification results, the update of the new risk level will be done manually, with approval before updating to the system.

How is risk management information stored and processed?

All results of risk classification and corresponding professional measures will be fully updated in the tax management support application systems of the tax authority. This is the basis for re-evaluation in the following periods, ensuring transparency, objectivity and inheritance of data.

Households and individuals doing business should pay attention to correctly declaring revenue and tax obligations, avoiding fraud or low declarations, and keeping full invoices and documents for revenue and expenditure.

See more articles on taxes for households and individuals doing business HERE.

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