Ho Chi Minh City, 8 Septemner 2026
On 1 July 2026, the Ministry of Finance issued Circular No. 94/2026/TT-BTC (“Circular 94”) on compliance management and risk management in tax administration, replacing Circular No. 31/2021/TT-BTC and taking effect from the date of issuance. Issued in alignment with Decree No. 252/2026/ND-CP, which provides detailed regulations and measures for the implementation of the Law on Tax Administration, Circular 94 marks an important shift in tax administration from an approach primarily focused on risk management to a combination of risk and compliance management, with several notable changes: a shift from risk management to a combination of compliance management and risk management; an expansion of the criteria for classifying taxpayers’ levels of compliance and risk; incentive mechanisms for taxpayers with good compliance; and greater application of digital technology in tax administration.
Shift from risk management to a combination of compliance management and risk management
Previously, regulations on compliance management mainly served to classify risks and select taxpayers for tax inspections, audits, tax refunds, etc. Circular 94 maintains this mechanism while elevating compliance management to an important component of tax administration. In general, the framework rests on two related concepts.
-
Level of tax law compliance refers to the tax authority’s assessment and classification of how fully, accurately and timely a taxpayer fulfils its obligations under tax laws throughout the processes of tax registration, tax declaration, tax payment, tax reporting and provision of information to the tax authority, and comprises four levels: good compliance, moderate compliance, low compliance and non-compliance.
-
Level of risk is a measure reflecting the likelihood and potential impact of a taxpayer’s non-compliance with tax laws on the fulfilment of tax obligations and the tax administration activities of the tax authority, and comprises three levels: high risk, medium risk and low risk.
Taxpayers’ levels of tax law compliance and risk in relation to specific tax administration activities will be classified based on sets of criteria indicators issued by the Director General of the Tax Department to meet tax administration requirements for each period, reviewed annually or as required by tax administration needs to revise and supplement the criteria indicators to ensure they remain up-to-date and suited to practical conditions.
Accordingly, while the level of compliance reflects how a taxpayer is fulfilling its tax obligations, the level of risk helps the tax authority determine the likelihood and extent to which control measures need to be applied. This enables the tax authority to focus its resources on high-risk taxpayers rather than conducting broad-based inspections as was previously the case. For example, under Article 10.3(a) of Circular 94, taxpayers classified as non-compliant will be subject to targeted control and supervision measures, as well as measures to enhance tax compliance.
Expanded criteria for classifying taxpayers’ levels of compliance and risk
For the purpose of strengthening risk and compliance management, Circular 94 significantly expands the criteria for assessing taxpayers’ levels of compliance and risk. For example, the criteria for classifying the compliance level now comprise 28 criteria, expanding the categories to cover information concerning the taxpayer’s legal representative; the taxpayers’ compliance with their tax obligations to the state budget; taxpayers’ voluntary registration for tax law compliance; enterprises engaging in related-party transactions or suspicious transactions; and other groups of criteria. The expanded criteria enable tax authorities to assess taxpayers more comprehensively and accurately, thereby facilitating appropriate classification of compliance levels, identification of risks, and application of management measures tailored to each taxpayer, thereby enhancing the effectiveness of state management while reducing compliance costs for taxpayers.
Incentive mechanisms for taxpayers with good compliance
Taxpayers with good compliance records and low risk may not only be considered for commendation and rewards but may also benefit from preferential treatment in tax administration, such as automation of procedures, shorter processing times for applications, and priority in inspection, supervision and support methods. To qualify for preferential treatment, taxpayers must maintain a good compliance rating and a low-risk rating for at least two consecutive years, while also meeting requirements relating to tax data connectivity and sharing; electronic data management and storage; internal controls and tax risk management; and compliance with accounting and financial reporting regulations.
This incentive mechanism provides businesses with a greater incentive to proactively comply, as proper compliance with tax laws can bring tangible benefits, such as reduced administrative procedures, shorter tax refund processing times, and priority in the processing of tax applications.
Greater application of digital technology in tax administration
Circular 94 provides for the development of a tax compliance and risk management module, applying big data, machine learning and artificial intelligence to support the analysis, issuance of alerts, scoring and classification of taxpayers and to assist tax authorities in selecting appropriate management measures rather than relying primarily on experience and manual assessment. However, under Circular 94, the analytical results generated by the system are for support purposes only and do not replace the decision-making responsibility of tax authorities or tax officials.
Conclusion
Tax administration is shifting from an approach primarily focused on risk control toward a more proactive model that places enhanced compliance as the objective, risk management as the tool, and taxpayers at the centre. For businesses, it is important to proactively review their compliance history and the consistency of accounting, invoicing, tax and records; keep up to date with changes in applicable regulations; and strengthen internal controls to promptly identify and rectify errors. Maintaining a good level of compliance not only helps minimise tax risks and compliance costs but also facilitates the completion of tax procedures.
—
See the previous part here: Part 1| Part 2| Part 3
—
If your business wants to strengthen tax compliance and proactively manage tax risks, contact our team for tailored guidance.
📧 info@indochinecounsel.com
☎️ (+84) 28 3823 9640
