Is incorrect declaration of exports without making supplementation after customs clearance considered a tax evasion in Vietnam?

Is incorrect declaration of exports without making supplementation after customs clearance considered a tax evasion in Vietnam?

Based on Clause 2, Article 143 of the Law on Tax Administration2019, regulations on acts of tax evasion are as follows:

Acts of tax evasion

1. Failure to submit taxpayer registration dossier; failure to submit tax declaration dossier; submitting tax declaration dossier more than 90 days after the deadline or the extended deadline for submitting the tax declaration dossier as prescribed by this Law.

2. Not recording in accounting books the revenue related to determining the tax payable.

3. Failing to issue invoices upon the sale of goods or services as prescribed by law or recording the value on the invoice lower than the actual payment value of the sold goods or services.

4. Using illegal invoices and documents, illegitimately using invoices to record inputs in business activities resulting in tax obligations, reducing the tax payable, or increasing the exempted, reduced, deductible, refundable amount of tax, or the tax not required to pay.

5. Using documents and papers that do not reflect the true nature of the transaction or the actual transaction value to incorrectly determine the tax payable, the exempted, reduced, refundable amount of tax, or the tax not required to pay.

6. Declaring inaccurately regarding the actual condition of exported, imported goods without supplementing the tax declaration dossier after the goods have been cleared.

7. Intentionally not declaring or misrepresenting taxes regarding exported, imported goods.

8. Colluding with the sender to import goods for the purpose of tax evasion.

9. Using goods that are subject to non-taxable, tax-exempt, tax-considered exemption purposes without declaring the conversion of intended use to the tax administration authority.

10. Taxpayers engaging in business activities during the period of cessation or temporary cessation of business activities without notifying the tax administration authority.

11. Taxpayers who are not penalized for tax evasion acts but are penalized according to the provisions of Clause 1, Article 141 of this Law in the following cases:

a) Failure to submit taxpayer registration dossier, failure to submit tax declaration dossier, submitting tax declaration dossier more than 90 days but no tax payable arises;

b) Submitting tax declaration dossier more than 90 days with tax payable arising and taxpayer has paid full tax, late payment fee into the state budget before the tax authority announces the tax inspection decision or before the tax authority records the act of late tax declaration submission.

In reference to these regulations, declaring inaccurately in relation to exported, imported goods without submitting supplementary tax declaration after goods clearance is considered a tax evasion act.

Thus, referencing the above regulation, declaring inaccurately regarding the actual condition of exported goods without submitting a supplementary tax declaration dossier is a tax evasion act.

Is incorrect declaration of exports without making supplementation after customs clearance considered a tax evasion in Vietnam? (Image from the Internet)

How many times shall the penalty be imposed for tax evasion by incorrect declaration of exports without making supplementation after customs clearance in Vietnam?

According to Article 17 of Decree 125/2020/ND-CP, the penalties for tax evasion acts are currently prescribed as follows:

- A penalty equal to one time the evaded tax amount applies to taxpayers with one or more mitigating circumstances when committing the following violations:

+ Failure to submit taxpayer registration dossiers; failure to submit tax declaration dossiers or submitting tax declaration dossiers more than 90 days from the due date, excluding cases specified at points b, c, Clause 4, and Clause 5, Article 13 of Decree 125/2020/ND-CP;

+ Not recording revenue related to determining the payable tax in the accounting books, misdeclaring, or leading to a shortfall in payable tax or an increase in refundable, exempted, or reduced tax, excluding behaviors stipulated in Article 16 of Decree 125/2020/ND-CP;

+ Failing to issue invoices for goods or services sold, except where taxpayers have declared tax for the value of goods or services sold and supplied in the corresponding tax period; issuing invoices with incorrect quantity, value to underdeclare tax that is discovered after the tax declaration deadline;

+ Using illegal invoices; illicitly using invoices to declare tax resulting in reduced tax payable or increased refundable, exempted, reduced tax amounts;

+ Using illegal documents; illicitly using documents; using documents not reflecting the actual transaction nature or value to incorrectly determine tax payable, exempted, reduced, refundable amounts; falsifying documents to cancel inventory inaccurately reducing tax payable or increasing refundable, exempted, reduced tax amounts;

+ Using goods not subject to tax, tax-exempt, or considered exemption purposes without declaring the conversion of use, declaring tax to the tax authority;

+ Taxpayers engaging in business during requested cessation or temporary cessation without notifying the tax authority, except for cases specified at point b, Clause 4, Article 10 Decree 125/2020/ND-CP.

- A penalty equal to 1.5 times the evaded tax amount applies to taxpayers who commit acts specified in Clause 1 of this Article without aggravating or mitigating circumstances.

- A penalty equal to 2 times the evaded tax amount is applied where there is one aggravating circumstance.

- A penalty equal to 2.5 times the evaded tax amount if there are two aggravating circumstances.

- A penalty equal to 3 times the evaded tax amount for three or more aggravating circumstances.

- Remedial measures:

+ Mandatory payment of the evaded tax amount to the state budget for violations specified in Clauses 1, 2, 3, 4, 5 of this Article.

In the event that the tax evasion act according to Clauses 1, 2, 3, 4, 5 of this Article is beyond the time limits for imposition of penalties, the taxpayer is not penalized for tax evasion but must pay the full evaded tax amount and the late payment fee to the state budget as per the deadline stipulated in Clause 6, Article 8 of Decree 125/2020/ND-CP.

+ Compulsory adjustment of losses and deductible input value-added tax on tax records (if any) for acts specified in Clauses 1, 2, 3, 4, 5 of this Article.

- Violations specified at points b, d, e, Clause 1 of this Article, when discovered after the tax declaration deadline, but do not reduce payable tax or where tax rebates have not been refunded, do not increase exempted, reduced tax amounts, are subject to administrative sanctions according to Clause 3, Article 12 of Decree 125/2020/ND-CP.

Thus, for the act of tax evasion by inaccurately declaring the actual condition of exported goods without submitting a supplementary tax declaration, a penalty equal to one time the evaded tax amount will apply if there is at least one mitigating circumstance.

What are the time limits for imposition of tax evasion in Vietnam?

Based on Clause 2, Article 8 of Decree 125/2020/ND-CP regarding the statute of limitations for administrative violations on tax, accordingly:

Time limits for imposition of administrative violations on taxes, invoices; duration considered not penalized; retroactive tax recovery period

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2. Time limits for imposition of administrative violations on tax

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b) The statute of limitations for acts of tax evasion that do not warrant criminal liability, or acts of misreporting leading to an insufficient tax payable or increased exempted, reduced, refunded tax amount is 05 years from the date of the violation.

The day the act of incorrectly reporting leads to insufficient tax payment, or increased exempted, reduced, refunded amount or the act of tax evasion (except for actions in point a, Clause 1, Article 17 of this Decree) takes place is the day following the last date of the tax declaration submission deadline for the tax period when the taxpayer declared insufficient tax, evaded tax, or the day following the decision by authority on tax refund, exemption, reduction.

For actions of failing to submit taxpayer registration dossiers, failing to submit tax declaration dossiers at point a, Clause 1, Article 17 of this Decree, the violation date for statute limitation is the date the official executing duty discovers the violation. For actions of submitting tax declaration dossiers after 90 days specified at point a, Clause 1, Article 17 of this Decree, the violation date for statute limitation is when the taxpayer submits the tax declaration dossiers.

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Thus, the time limit for imposition of tax evasion not reaching criminal liability is 05 years from the date of the violation.