TAX FINAL SEASON IS COMING, HERE ARE SOME TAX INSIGHTS FOR FOUNDERS

 

According to Mr. Phung Le Lam Hai – Founder and General Director of Equitix Investing Company, founders should: 

1 book gone only. 

2 books are always very insecure. 

Mr. Hai feels the trend is to purify the market so that you guys can do it properly, do it really… big. 

To move, founders want to do it in not 1 or 2 days. 

This information and insights are the working information of the companies that Equitix discussed and shared with you guys. 

Try to comply with standards and fundamentals for sustainability!

Current status of Enterprises:

1. When tax authorities suppress, Enterprises only process books and have no plan to work directly with Tax authorities, the amount of tax arrears can multiply many times revenue. 

Basis: Compare the tax reporting cost structure of enterprises in the same industry, in the same business geography and product line recorded in the tax agency document library. 

2. Self-finalize taxes and collect them yourself at the risk of being assessed more tax than you have to pay. Assignment means that the tax authority sets a specific tax amount to be paid instead of letting you proactively declare and pay taxes according to regulations. 

3. Full contract for the service. If we make a mistake, our legal representative must bear the responsibility. 

4. Tax is a risk that can suddenly strike, so this job belongs to the risk management group and we founders should have a tax strategy, so that when working with tax authorities, this job should be transformed into a proactive work group for businesses.

5. For submitting tax reports late, founders are estimated to be fined 250 – 300 million. 

6. Money goes through accounts that cannot prove the origin of the transaction. 

7. The risk of doing tax services because we are not familiar with accounting, have poor tax reporting, and improper accounting, we will have to bear the full burden. 

8. Represent trading accounts close to each other in the relative profile. 

… 

Insights according to Mr. Hai are what he knows and be shared:

1. Tax has a machine to measure and classify financial reports for tax risks. 

Scan once: 

a) Stick in red, founders are about to get priority settlement 

b) Stick in yellow, founders are about to fall into the observation round 

c) Green, maybe they haven’t looked for us for many years, but no means never find. 

2. Taxes organize work according to topics. Founders have not settled yet. It doesn’t mean it’s okay, it just means it’s not their turn yet. It will come eventually. 

Some days it’s medical, some days it’s food; Some days it’s motorbikes, some days it’s… other industries. 

3. When entering the tax Blacklist, Tax through the citizen identification card, from the CIC (bank credit history) of the individual who determines the tax.

4. Many bank accounts have transactions that are on the Blacklist but it is not clear until they borrow from the bank that they cannot borrow because they are in the observation stage. 

5. Issue an invoice from one of your companies to another company with the address and name of the business owner, and you will learn how tax operates and the relationship between the two companies. 

6. The tax is being implemented to strengthen companies that show signs of transfer pricing, invoices issued to one company are transferred to another company, causing a difference in cost structure, different from the cost structure of businesses in the same industry. 

7. If you make tax reports with consecutive losses for many years, the tax will ask, where is your money to keep your business running?

…

Normally, Equitix members will proactively do a few things: 

1. Proactively create tax strategies + the optimal legal tax plan to pay. 

Go from the business plan to the amount of taxes that need to be paid. 

2. Proactively take measures + plan and manage taxes monthly, quarterly, and yearly. 

Go into details of tax and legal processing operations. 

As the founders already know, studying law and practicing law in Vietnam are two very different states. 

If the legal practitioner gives us too much knowledge but lacks the perspective of an owner, we will always be in a state of needing more advice than what a lawyer/accountant needs, but not knowing whether we should. Would you like to share your feelings more deeply from the perspective of a founder? 

3. Prepare books and submit reports on schedule. Proactively have a detailed accounting adjustment plan before tax finalization. It’s coming soon. 

4. Explain tax data when faced with arising issues before the tax authority. 

There should be someone to coordinate internally and adjust detailed accounts with general accounting, to serve tax work, store tax documents and books + directly settle taxes. 

Recruiting is also a lot of work, Equitix only has a good enough team due to luck for a long time ☺️ 

5. Company structure and company legality to suit tax reporting: Input and output VAT; Personal income tax, corporate income tax. 

Doing business in Vietnam is very difficult, right? So founders in Vietnam are very brave and talented.