Section Code: 0088
Power of Assessment Official
Assessment official shall have the power to assess value added tax, fine and surcharge under this part in the case where:
- it appears to an assessment official that person liable to tax does not file tax return, tax remittance return or an entry within the prescribed time;
- an assessment official having an evidence that a person liable to tax files tax return, tax remittance return or an entry by under declaring the amount of tax due;
- person liable to tax fails to comply with a summons issued by an assessment official or to answer the assessment official’s questions without reasonable causes;
- business person fails to issue tax invoice for the purpose of input tax or copy of tax invoice for the purpose of output tax as well as other evidence for the purpose of tax calculation or tax credit;
- business person fails to keep copy of tax invoice for the purpose of output tax and other evidence supporting report making as prescribed by law; or
- it appears to an assessment official that the business person liable to value added tax registration in accordance with Section 85/1 does not register for value added tax.
Assessment official shall have the power to assess value added tax charge, fine and surcharge under this Chapter in the case where any person issues tax invoice, debit note or credit note without an authorization under Section 86/13 for the amount shown in such tax invoice, debit note or credit note.
For the purpose of Section 88 and Section 88/1, assessment official shall have the power to:
- make tax return, tax remittance return or an entry base on reliable evidence where the person liable to tax does not file tax return, tax remittance return or an entry;
- correct tax return, tax remittance return or an entry;
- assess tax where there is an evidence on underpaid tax by business person or undervalued tax base;
- determine appropriate value by considering wealth or behavior of business person or his trade statistics or trade statistics of business person carrying on similar business, or by considering other factors which reflects appropriate value;
- correct value of goods purchased or service received, as the case may be, where there arises events under Section 88 (3), (4) or (5);
- assess tax as seen or considered correct where there arises events under Section 88 (3), (4), or (5) without the need to follow (1) – (4).
In exercising the power of assessment official where the events under Section 88 (6) arises, a business person required to make application for value added tax registration under Section 85/1 but did not do so shall be deemed liable to tax as if he was a VAT registrant.
Assessment official shall have the power to enter into a place of business of a business person whether or not he is a VAT registrant, or into other relevant places, from the sunrise to sunset or during working hours of business person, and investigate whether the business person duly comply with the provisions in this chapter; in doing so an assessment official shall have the power to order the business person or persons in that place to act as necessary for the purpose of investigating relevant document, and to seize such document.
In proceeding with paragraph 1, assessment official shall show his identification card and other document to relevant person upon entering for investigation.
In proceeding with this part, an assessment official shall have the power to issue summons to person liable to tax, person acting in a representative capacity or witness and to order such person to provide accounts, documents or other evidence in relation to such matter in order to investigate, or order a witness to reply to the questions in writing, but he shall provide the time for at least 7 days as from the date of receiving a summons or order.
When an assessment official has assessed value added tax in accordance with Section 88 and 88/1, he shall notify such assessment in writing to the person liable to tax or person under Section 88/1; and in this case the person liable to tax or person under Section 88/1 shall have the right to appeal in accordance with the provisions in Part 2, Chapter 2, Title 2, except in the case where an assessment official make an assessment as a result of causes in Section 88 (3) in which an appeal is prohibited.
An assessment by assessment official shall be made within a period of time as follows:
- in respect to a business person;
- 2 years as from the last day of the period for tax return filing or of the period extended by the Minister or the Director-General whichever is the later date, however, only applicable to cases where person liable to tax files the tax return within such period;
- 2 years as from the date of filing the tax return by person liable to tax, however, only applicable to cases where person liable to tax files the tax return after the last day of the period specified in (a) but not exceeding 10 years as from the last day of tax return filing period;
- 10 years as from the last day of tax return filing period in the case where person liable to tax return filing fails to file the tax return or files tax return with the declared tax base lower than the value received or receivable by the business person by more than 25 percent of the tax base declared in the tax return;
- in respect to an importer not being a business person, 2 years as from entering; except in the case where an importer files an objection under customs law or a court action, 2 years as from the date of receiving the ruling in writing or from the date of delivering final judgment, as the case may be;
- in respect to person liable to remit value added tax under Section 83/5, 83/6, or 83/7, 2 years as from the last day of filing tax remittance return.
In the case where there is a reasonable cause to believe that a business person, importer or person liable to remit value added tax declares incorrect or incomplete tax return, entry, or tax remittance return, an assessment official shall, with the Director-General approval, assess tax within 5 years as from the prescribed time under (1) (a), (2) or (3), as the case may be.