Are bankrupt enterprises subject to tax-related administrative violations in Vietnam?

Are bankrupt enterprises subject to tax-related administrative violations in Vietnam?

According to Article 41 of Decree 125/2020/ND-CP, regulations on the enforcement of decisions on tax-related administrative violations in the case of dissolved or bankrupt organizations are as follows:

Enforcement of decisions on tax or invoice-related administrative violations in cases where the penalized person has died, gone missing; the penalized organization is dissolved or bankrupt

1. In cases where the person penalized has died, gone missing; the penalized organization is dissolved or bankrupt, the financial penalty stipulated in the penalty decision is not enforced; however, measures to remedy the consequences recorded in the decision are still applied.

The person who issued the penalty decision must issue a decision to partially enforce the administrative penalty decision within 60 days from the date of receiving the notification that the penalized person has died, gone missing; the penalized organization is dissolved or bankrupt.

In cases where the penalty decision does not include measures to remedy the consequences, the person with authority to impose penalties issues a decision to suspend the enforcement of the penalty decision.

2. Basis for determining individuals who died or went missing; organizations that are dissolved or bankrupt:

a) Death certificate or death notice or documents substituting the death notice as prescribed by civil status law, or a court decision declaring a person as deceased or missing (original or copy as prescribed) for individuals who have died, gone missing;

b) Notice of dissolution of enterprises, cooperatives by the business registration agency, cooperative registration agency in the case where enterprises, cooperatives are dissolved; notice of termination of the tax code by the tax authority in the case where the dissolved organization is not an enterprise or cooperative (original or copy as prescribed);

c) Bankruptcy declaration for enterprises, cooperatives that are bankrupt (original or copy as prescribed).

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According to the above regulations, bankrupt enterprises will not face enforcement of financial penalties in administrative penalty decisions for tax violations but will still be subject to measures to remedy the consequences specified in the decision.

Are bankrupt enterprises subject to tax-related administrative violations in Vietnam? (Image from the Internet)

Which entity is subject to tax or invoice-related administrative violations in Vietnam?

Pursuant to Article 3 of Decree 125/2020/ND-CP, those subject to tax or invoice-related administrative violations are as follows:

(1) Entities subject to tax or invoice-related administrative violations include:

- Taxpayers committing administrative violations regarding taxes and invoices.

+ In cases where taxpayers authorize other organizations or individuals to fulfill tax obligations that tax law and tax management regulations designate as the responsibility of the authorized, and if the authorized commit administrative violations, the authorized organizations or individuals are penalized under Decree 125/2020/ND-CP.

+ In cases where, according to tax law and tax management regulations, organizations or individuals have the responsibility to register taxpayers, declare, and pay taxes on behalf of taxpayers, and the organizations or individuals undertaking these responsibilities commit administrative violations, they are subject to tax-related administrative violations as stipulated in Decree 125/2020/ND-CP.

- Organizations and individuals related to administrative violations regarding taxes and invoices.

(2) Taxpayers as organizations subject to tax or invoice-related administrative violations include:

- Enterprises established and operating under the Law on Enterprises, Law on Investment, Law on Credit Institutions, Law on Insurance Business, Law on Securities, Law on Petroleum, Commercial Law, and other legal documents; dependent units of enterprises, business locations directly declaring, paying taxes, using invoices;

- Public non-business units and non-public non-business units;

- Organizations established and operating under the Law on Cooperatives;

- Foreign organizations and enterprises, branches, representative offices of foreign traders, foreign contractors’ liaison offices in Vietnam doing business or generating income in Vietnam;

- State agencies committing administrative violations regarding taxes and invoices that do not fall within the assigned state management duties;

- Cooperative groups and other organizations established according to legal provisions.

What are the remedies in administrative penalties in Vietnam?

According to Clause 3, Article 7 of Decree 125/2020/ND-CP, the remedies in administrative penalties include:

- Compelling the payment of the full amount of deficient tax, tax amount exempted, reduced, or refunded exceeding the regulations, evaded tax, late tax payment to the state budget.

- Compelling the adjustment of loss, input value-added tax deductible transferred to the following term.

- Compelling the submission of documents for changes in taxpayer registration; re-declaration and submission of additional tax-related documents; submission of tax declaration files, appendices accompanying tax declaration files; provision of information.

- Compelling the procedures for invoice issuance.

- Compelling the issuance of invoices according to regulations.

- Compelling the destruction or cancellation of invoices and printed products.

- Compelling the creation and sending of notifications and reports on invoices.

- Compelling the transfer of electronic invoice data.

- Compelling the remission of illicit gains obtained through administrative violations.