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Consultant's Corner

Tax knowledge a prerequisite for global integration

Released at: 09:20, 21/07/2016 FINANCE - TAX CONSULTANCY

Tax knowledge a prerequisite for global integration

Photo: Deloitte Vietnam

Global economic integration facilitated by the signing of free trade agreements (FTAs) is not only an opportunity for Vietnamese enterprises but also for foreign enterprises seeking access to Vietnam's market. Mr. Phan Vu Hoang, Tax Partner with Deloitte Vietnam, explains how businesses can maximize the benefits from FTAs with a comprehensive knowledge of tax and customs regulations.

■ How do you view the importance of tax consulting firms in Vietnam, especially given the country’s ongoing economic integration?

When entering into FTAs, especially the TPP, Vietnam will have to reform many of its regulations and legal framework. Both Vietnamese and foreign enterprises investing in Vietnam will need to equip themselves with new knowledge of the tax and customs regulations of various countries in the supply chain. In each country the legal documents on taxes and customs, despite sharing certain common principles, contain significant differences in details. Obviously, not every enterprise will have sufficient resources to efficiently “absorb” such a significant volume of new information.

In that context, assistance from a tax consulting firm with extensive global experience and comprehensive local knowledge such as Deloitte would be particularly helpful for those enterprises. With long-term experience, global knowledge and deep insights into the legal and business environment in Vietnam, we are able to consult our clients on, firstly, meeting tax compliance requirements, and then on how to take full advantage of the benefits brought about by the FTAs.

With advice, recommendations and planning that ensure a proper balance between commercial and tax benefits and with frequent reviews and adjustments recommended by our professional tax consultants, enterprises can focus their resources on their core business activities instead of resource-consuming subordinate activities, while still achieving high tax compliance and benefiting from tax harmonization.

■ How would you assess the trend of tax reforms towards transparency and administrative simplification that are being introduced by tax authorities in many countries, including Vietnam?

Transparency and tax administration simplification are highly critical indicators of worldwide effective tax systems, and Vietnam cannot stand out of this trend. A tax system with high transparency, in which taxpayers can easily access information and specific and clear instructions from tax authorities, will help improve equity in tax treatment and thereby encourage voluntary compliance from taxpayers. Similarly, the simplification of tax administrative procedures also aims to assist taxpayers in voluntarily complying with regulations.

According to a report released in 2013 by the World Bank, its eight years of research revealed that the simplification of tax procedures is an effective way of contributing to economic development (even more efficient than reducing tax rates). We greatly appreciate the recent efforts of the tax office to streamline its administrative procedures and simplify tax declaration processes, which resulted in a reduction of 420 hours for implementing tax procedures. However, we believe that much remains to be done before Vietnam’s tax system meets the requirements of extensive and comprehensive economic integration, creating the most favorable environment for businesses and investors and contributing to the country’s economic development to fully exploit its potential.

■ What are the differences and competitive advantages of Deloitte Vietnam’s Tax Advisory Services compared with other tax consulting firms?

Deloitte’s biggest and clearest difference compared to other tax consulting firms rests in the added value that our services can bring to clients. For a service to be considered of the highest value, in our opinion, apart from an extremely high level and content of expertise it has to also offer realistic recommendations and solutions that are relevant and applicable to the characteristics and the specific situation of each customer in each case. The combination of global knowledge and the experience shared from thousands of precedents that we have handled for our clients enable us to understand the specific business, risks and problems associated with our clients in order to provide the most practical and effective advice. These create the “high value” that establishes the differential competitiveness of Deloitte’s services.

In particular, to always be able to harmonize the benefits for both taxpayers and tax and customs authorities, Deloitte has developed and maintained trusted working relationships with the Ministry of Finance and other relevant ministries and tax and customs agencies at all levels, from the central to local authorities. These relationships are built on a basis of sharing professional knowledge and support between Deloitte and authorities, thereby enhancing mutual understanding so as to handle the work in the most effective manner for clients while ensuring the goals of State agencies are reached.

■ Regarding Deloitte’s tax advisory services, one of the critical factors in professionalism and success is human resources. Can you tell us about the personnel training solutions adopted by Deloitte to help improve service quality during integration?

With many new, engaging and challenging recruitment practices, along with useful and practical training programs, for many years Deloitte has been considered the industry’s top employer, attracting talented students who wish to take up the challenge to become a “Deloitter”. After being carefully selected from the best candidates, our new tax consultants undergo various training in multiple combined forms to become specialists. The training is a well-balanced combination of official courses, on-the-job training, and self study.

The company offers different alternatives in official training courses, from courses organized by the company to courses for professional certification. After reaching a new level, top-performing consultants are sent to training courses at the international Deloitte University for in-depth training. The most important and useful form of training is on-the-job training, conducted before, within, and after each client engagement. Deloitte also has a massive database of specialized knowledge based on accumulated case studies, e-learning courses, and a website operated by Harvard Business Publishing specifically for Deloitte, offering courses on various business and leadership skills, of which our consultants have access for self-study at any time.

  • TAGS
  • FTA
  • TPP
  • tax consulting
  • advisory services

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