80-year-old man suddenly has director's tax identification number

Ms. NAH (HCMC) said that her father has long passed retirement age, but when she went to declare dependents to reduce personal income tax, the tax authority refused because her father is... the director of a high-income business.

80 years old suddenly has a tax code

Only H. said that she was very surprised because her father was 80 years old and no longer worked and did not know what a tax code was. Even more surprising was that H. herself had two tax codes.

"The tax authority asked me to explain why I had a tax code issued in 2009 and another tax code issued in 2014. I was very surprised because up until now I had only registered a tax code issued in 2009" - Ms. H. said.

Ms. Huyen, a teacher in Ho Chi Minh City, said she also fell into a funny situation when she went to settle her personal income tax a few years ago and suddenly discovered another source of income at a company in Ben Nghe ward, District 1, even though she had never known this business.

Mr. Truong Ngoc Hiep, Deputy Head of Binh Thanh Tax Department, confirmed that the tax authority discovered many cases of sudden income falling from the sky.

"There are cases where employees have previously been on probation at a certain company, and the company uses their tax code to declare salary payments to employees," said Mr. Hiep.

Regarding the violating company, Mr. Hiep said that when the tax authority asked for an explanation, they often gave the excuse of entering the wrong information.

The amount is usually only a few tens of millions of VND, so most tax authorities only exclude this expense and impose penalties for false declaration. If the business violates intentionally, with a purpose, the tax authority will handle the crime of false declaration and tax evasion, but few businesses are handled in this way.

Tax code misappropriation is tax evasion.

A representative of the Ho Chi Minh City Tax Department also admitted that there are cases where businesses evade increasing costs by including relatives and acquaintances who do not work in the income payment list to increase operating costs. If the individual being exploited does not work for a salary, this person admitted that it is difficult to detect.

Tax expert Nguyen Thai Son said that nowadays, applying for a tax code is very easy, just need a copy of ID card to register, so many part-time students, people who lost their ID cards... have been taken advantage of by businesses.

For example, if only 10 fake workers are added, each worker's income is 10 million VND/month, the business will have an additional expense of 100 million VND/month.

This amount only requires businesses to temporarily deduct 10% personal income tax, while if included in profits to pay corporate income tax (20%), the amount of tax payable will double.

Lawyer Tran Xoa said that cases of taking advantage of self-appropriation of tax codes to falsely declare expenses should be determined as acts of fraud and tax evasion because businesses have included completely non-existent expenses into expenses by "creating" a false number of employees.

But because the fines are so light, many businesses still use this trick year after year.

Difficult to control tax codes

Ms. Ta Thi Phuong Lan - Deputy Director of the Personal Income Tax Management Department, General Department of Taxation - confirmed that since 2010, there have been cases of businesses stealing tax codes to declare increased operating costs to reduce tax payments.

In fact, many businesses have been fined for falsely declaring expenses and committing fraud through stealing personal income tax codes.

Currently, the whole country has more than 10 million personal income tax codes. Tax authorities cannot know whether an individual has income from enterprise A or B, and how much.

Ms. Lan suggested that taxpayers should strictly manage tax codes and identity cards.

"When you discover that your tax code has been stolen or falsely declared, you should immediately report it to the tax authorities," Ms. Lan suggested.