The Vietnam Tax Authority has issued a statement emphasizing that risk alerts concerning tax refunds should not be interpreted as conclusive evidence of violations. This clarification comes as part of an effort to standardize procedures for processing value-added tax (VAT) refunds across provinces and cities.

According to the Tax Authority, sellers who directly issue invoices to taxpayers requesting refunds are classified as F1. Risk information related to F2, F3, and subsequent levels in the supply chain serves merely as data for assessing and managing risks, rather than grounds for concluding that transactions are non-existent or invoices are illegal.

The Tax Authority has directed provincial tax offices to uniformly apply principles and methods in handling VAT refunds. It stated that if F2, F3, or other subsequent levels present risk alerts, tax officials should not rely solely on these alerts to determine whether the corresponding input VAT is subject to pre-refund checks or is ineligible for refund.

Furthermore, the authority noted that information regarding sellers or entities in the supply chain that exhibit risk, such as ceasing operations or undergoing tax code cancellation, is intended for risk management purposes only. Such information does not justify conclusions about the legitimacy of transactions or the validity of invoices.

Nguyen Van Thuc, Chairman of the Board of Directors at BCTC Tax Agency, commented that this approach enhances risk management and fraud prevention in tax refunds while ensuring that businesses' rights are protected. He stressed that businesses should take responsibility for their transactions but cannot be expected to control all levels of the supply chain.

Thuc also highlighted the importance of companies proactively establishing tax management systems and maintaining thorough records to demonstrate the authenticity of transactions when required by tax authorities. Ensuring consistency among contracts, invoices, payments, deliveries, and accounting records is crucial.

In related news, many businesses continue to face challenges in obtaining VAT refunds. On August 25, the Ho Chi Minh City Tax Department held a candid dialogue with hundreds of businesses regarding issues related to VAT refund documentation.