Is a taxpayer subject to tax liability imposition also subject to fines in Vietnam?

Is a taxpayer subject to tax liability imposition also subject to fines in Vietnam?

Pursuant to Point c, Clause 2, Article 16 of Decree 126/2020/ND-CP, the regulations are as follows:

Authority, Procedures, and Decision on tax liability imposition

1. Authority to Assess Tax

The Director-General of the General Department of Taxation; the Director of the Department of Taxation; the Head of the Sub-Department of Taxation has the authority to assess tax.

2. Procedures for tax liability imposition

a) When assessing tax, the tax authority shall notify the taxpayer in writing about the tax liability imposition and issue a tax liability imposition decision. The tax liability imposition decision must clearly state the reason for the tax liability imposition, the basis for the tax liability imposition, the assessed tax amount, and the deadline for tax payment.

b) In case the tax authority performs a tax liability imposition through tax inspection or tax audit, the reason for the tax liability imposition, the basis for the tax liability imposition, the assessed tax amount, and the deadline for tax payment must be recorded in the tax inspection, tax audit minutes, and tax handling decision of the tax authority.

c) In cases where the taxpayer is subject to tax liability imposition as per regulations, the tax authority shall impose fines and calculate the late payment interest as per the law.

3. Decision on tax liability imposition

a) When assessing tax, the tax authority must issue a tax liability imposition decision according to Form No. 01/ADT in Appendix III enclosed with this Decree and send it to the taxpayer within 03 working days from the date of signing the tax liability imposition decision;

In cases where the taxpayer is liable to pay tax as notified by the tax authority, the tax authority is not required to issue a tax liability imposition decision as prescribed in this clause.

b) The taxpayer must pay the assessed tax amount according to the tax handling decision of the tax management authority. If the taxpayer disagrees with the tax assessed by the tax authority, the taxpayer must still pay the tax and has the right to request a tax authority explanation or file a complaint, or initiate a lawsuit regarding the tax liability imposition.

In cases where the taxpayer is subject to tax liability imposition as per regulations, the tax authority shall impose fines and calculate the late payment interest as per the law.

Therefore, a taxpayer subject to tax liability imposition will face fines.

Is a taxpayer subject to tax liability imposition also subject to fines in Vietnam? (Image from the Internet)

Which form is used for tax liability imposition decision by tax authority in Vietnam?

Pursuant to Clause 3, Article 16 of Decree 126/2020/ND-CP regarding the tax liability imposition decision of the tax authority as follows:

Authority, Procedures, and Decision on tax liability imposition

...

3. Decision on tax liability imposition

a) When assessing tax, the tax authority must issue a tax liability imposition decision according to Form No. 01/ADT in Appendix III enclosed with this Decree and send it to the taxpayer within 03 working days from the date of signing the tax liability imposition decision;

In cases where the taxpayer is liable to pay tax as notified by the tax authority, the tax authority is not required to issue a tax liability imposition decision as prescribed in this clause.

b) The taxpayer must pay the assessed tax amount according to the tax handling decision of the tax management authority. If the taxpayer disagrees with the tax assessed by the tax authority, the taxpayer must still pay the tax and has the right to request a tax authority explanation or file a complaint, or initiate a lawsuit regarding the tax liability imposition.

The tax liability imposition decision of the tax authority is executed according to Form No. 01/ADT in Appendix 3 attached to Decree 126/2020/ND-CP.

Download the tax liability imposition decision form of the tax authority.

What are cases of tax liability imposition in Vietnam?

According to Article 14 of Decree 126/2020/ND-CP, taxpayers are subject to tax liability imposition by the tax authority in the following cases:

- No taxpayer registration in accordance with Article 33 of Tax Administration Law 2019.

- Failure to declare taxes or knowingly insufficient, dishonest, and inaccurate tax declaration as prescribed in Article 42 of Tax Administration Law 2019.

- Failure to submit additional tax files upon request of the tax management authority or submission of additional tax files but not completely, honestly, and accurately providing the tax calculation bases to determine the tax payable.

- Failure to record or inaccurately and dishonestly record figures in the accounting books to determine tax liability.

- Failure to present accounting books, invoices, vouchers, and necessary documents related to determining the factors as tax calculation bases; determining the tax payable within the prescribed period or after the tax inspection, tax audit period has expired at the taxpayer's office.

- Failure to comply with the tax inspection decision within 10 working days from the date of signing the decision, except the case of delay of inspection period according to regulations.

- Failure to comply with the tax audit decision within 15 days from the date of signing the decision, except the case of delay of audit period according to regulations.

- Buying, selling, exchanging, and accounting for the value of goods, services not based on ordinary market transaction value.

- Purchasing, exchanging goods, services using unlawful invoices, using invoices unlawfully where the goods, services genuinely exist as determined by investigative, inspection, or audit authorities and have been declared for revenue, expenditure for tax calculation.

- Exhibiting signs of escape or dispersal of assets to evade tax obligations.

- Conducting transactions that do not match the economic substance, do not reflect the actual occurrences to reduce taxpayer's tax liability.

- Non-compliance with the declaration obligation, determination of linked transaction prices, or non-provision of information as per regulations on tax management for enterprises with linked transactions.