Is a company exempted from fines for tax-related administrative violations also exempted from the late payment interest in Vietnam?
Is a company exempted from fines for tax-related administrative violations also exempted from the late payment interest in Vietnam?
Pursuant to Clause 4, Article 43 of Decree 125/2020/ND-CP amended by Clause 6, Article 1 of Decree 102/2021/ND-CP which stipulates as follows:
Exemption, reduction of fines for tax-related administrative violations and invoices
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- The maximum exemption or reduction of penalties is equivalent to the penalty stipulated in the penalty decision and not exceeding the value of the damaged assets, goods, after deducting the value covered by insurance or compensation (if any).
Taxpayers who suffer damages in force majeure cases stipulated in the Law on Tax Administration must provide documents proving the value of the damaged assets, goods, and the value covered by insurance, compensation as follows:
a) A record of inventory and determination of material damages' value made by the taxpayer or their legal representative;
b) A record of determination of material damage's value by an organization authorized to evaluate according to the provisions of the law (original or certified copy), except when a compensation record is available as prescribed in point c of this clause;
c) Documentation for material damage compensation accepted by the insurance company under the provisions of the law (original or certified copy) (if any);
d) Documentation on the compensation liability of the organization or individual to be compensated according to the provisions of the law (original or certified copy) (if any).
- No exemption or reduction of fines for tax-related administrative violations and invoices for cases where the penalty decision has been completed.
4. In cases where penalties are exempted or reduced, the late payment interest are also exempted or reduced.
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According to the above regulation, if a company is exempted from fines for tax-related administrative violations, the late payment interest are also exempted.
Is a company exempted from fines for tax-related administrative violations also exempted from the late payment interest in Vietnam? (Image from Internet)
What are the forms of penalty for tax-related administrative violations in Vietnam?
Pursuant to clauses 1 and 2, Article 7 of Decree 125/2020/ND-CP which stipulates forms of fines for tax-related administrative violations as follows:
(1) Main forms of penalty: warning and fines:
- Warning
A warning is applied to acts of less serious tax, invoice procedure violations that contain mitigating circumstances and fall under the cases where a warning form is applied according to this Decree.
- Fines
+ A maximum fine of not more than VND 100,000,000 for organizations that commit administrative violations on invoices. A maximum fine of not more than VND 50,000,000 for individuals that commit administrative violations on invoices.
+ A maximum fine of not more than VND 200,000,000 for taxpayers being organizations committing procedural tax violations. A maximum fine of not more than VND 100,000,000 for taxpayers being individuals committing procedural tax violations.
+ A fine of 20% of the under-declared tax amount or the excessive tax exempted, reduced, refunded for false declaration acts leading to insufficient tax payable or increasing the amount of tax exempted, reduced, refunded.
+ A fine from 1 to 3 times the evaded tax amount for acts of tax evasion.
+ A fine equivalent to the amount not deducted into the state budget account for violations as prescribed in Clause 1, Article 18 of Decree 125/2020/ND-CP.
(2) Supplementary forms of penalty: temporary suspension of invoice printing activities.
What Is the principle of applying fines for tax-related administrative violations in Vietnam?
Pursuant to Clause 4 of Article of Decree 125/2020/ND-CP which stipulates the principles for applying fines for tax-related administrative violations as follows:
- The fine levels specified in Articles 10, 11, 12, 13, 14, 15, Clauses 1, 2, Article 19, and Chapter III of Decree 125/2020/ND-CP are the fine levels applied to organizations.
For taxpayers as households or business households, the fine level is applied as for individuals.
- When determining the fine level for a taxpayer violating with both aggravating and mitigating circumstances, the aggravating circumstance is reduced according to the principle that one mitigating circumstance reduces one aggravating circumstance.
- The mitigating or aggravating circumstances already used to determine the fine range framework are not used when determining the specific fine according to point d, Clause 4 of Decree 125/2020/ND-CP.
- When fining, the specific fine level for a tax, invoice procedure violation and the act under Article 19 of Decree 125/2020/ND-CP is the average level of the fine framework regulated for that act. If there are mitigating circumstances, each circumstance reduces the fine level by 10% of the average fine level but the fine level for that act is not reduced beyond the minimum of the fine framework; if there are aggravating circumstances, each aggravating circumstance is calculated to increase the fine by 10% of the average fine level but the fine level for that act does not exceed the maximum of the fine framework.
