Is submitting the tax declaration after 90 days without incurring tax considered tax evasion in Vietnam?

Is submitting the tax declaration after 90 days without incurring tax considered tax evasion in Vietnam?

Pursuant to Article 143 of the Law on Tax Administration 2019, acts of tax evasion include:

- Failure to submit taxpayer registration documents; failure to submit tax declarations; submitting tax declarations more than 90 days after the due date for submission of tax declarations or the expiry date of extension for submission of tax declarations.

- Not recording in accounting books the revenues related to determining the tax liabilities.

- Not issuing invoices when selling goods or services as per legal regulations or recording invoice values that are less than the actual payment value of sold goods or services.

- Using illegal invoices or documentation, or using legal invoices improperly for accounting input goods or raw materials in tax obligation activities to reduce tax liabilities or increase tax exemptions, reductions, or credits, or total refundable tax, or total tax not to be paid.

- Using documents or materials that do not accurately reflect the true nature of the transaction or the actual value of the transaction to inaccurately determine tax liabilities, or tax exemptions, reductions, or credits.

- Incorrect declaration regarding the actual condition of exported or imported goods without amending tax declaration after goods clearance.

- Intentionally failing to declare or wrongfully declaring tax for exported or imported goods.

- Collaborating with consignors to import goods for tax evasion.

- Utilizing tax-exempt goods for non-compliant purposes without declaring the change of use with the tax authority.

- Conducting business activities during the suspension or temporary suspension of business operations without notifying the tax authority.

- Taxpayers who are not penalized for tax evasion but are fined according to clause 1 Article 141 of the Law on Tax Administration 2019 in the following cases:

+ Failing to submit taxpayer registration documents, failing to submit tax declarations, or submitting tax declarations after 90 days without incurring tax liabilities;

+ submitting tax declarations after 90 days with tax liabilities, and the taxpayer has fully paid the tax due, including late payment interest, into the state budget before the tax authority announces the tax audit decision or before the tax authority issues an administrative record for late submitting of tax declarations.

Thus, submitting tax declarations after 90 days without incurring tax liabilities is not considered an act of tax evasion.

Is submitting the tax declaration after 90 days without incurring tax considered tax evasion in Vietnam? (Image from Internet)

What are the administrative penalties for tax evasion in Vietnam?

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

+ A fine equal to the amount of tax evaded is imposed on taxpayers with at least one mitigating factor when committing one of the following violations:

- Failing to submit taxpayer registration documents; failing to submit tax declarations or submitting them more than 90 days after the due date, except as specified in points b, c clause 4 and clause 5 Article 13 of Decree 125/2020/ND-CP;

- Not recording in accounting books the revenues related to tax determination, incorrect declarations leading to insufficient tax payments, or increasing the tax refund amount, or exemptions or reductions;

- Not issuing invoices when selling goods or services, except when the taxpayer has submitted taxes for the value of goods and services sold and provided in the corresponding tax period; issuing incorrect invoices leading to lower tax declarations and detected after the tax submitting deadline;

- Using illegal invoices; misusing invoices to report taxes, reducing payable taxes, or increasing refund, exemption, or reduction amounts;

- Using illegal documents; misusing documents; using documents or materials that do not reflect the true nature of transactions or actual transaction values causing incorrect tax determinations or increasing fraudulently the refund, exemption, reduction amounts;

- Using tax-exempt goods for non-regulated purposes without declaring the change of use purpose with the tax authority;

- Taxpayers conducting business during the period of requested suspension without notifying the tax authority, except specified in point b clause 4 Article 10 of Decree 125/2020/ND-CP.

+ A fine equal to 1.5 times the amount of tax evaded is imposed on taxpayers committing one of the violations stipulated in clause 1 Article 17 of Decree 125/2020/ND-CP without aggravating or mitigating circumstances.

+ A fine equal to 2 times the amount of tax evaded is imposed on taxpayers with an aggravating circumstance.

+ A fine equal to 2.5 times the amount of tax evaded is imposed on taxpayers with two aggravating circumstances.

+ A fine equal to 3 times the amount of tax evaded is imposed on taxpayers with three or more aggravating circumstances.

+ Remedial measures:

- Mandatory payment of the evaded tax amount to the state budget for violations prescribed in clauses 1, 2, 3, 4, 5 of Article 17 of Decree 125/2020/ND-CP.

If the tax evasion conduct according to clauses 1, 2, 3, 4, 5 of Article 17 of Decree 125/2020/ND-CP has surpassed the time limit for penalty, the taxpayer is not penalized for tax evasion but must pay the full amount of evaded tax, including late payment interest, into the state budget according to the time limit prescribed in clause 6 Article 8 of Decree 125/2020/ND-CP.

- Adjusting the loss, input VAT credit amount on tax records (if any) for violations stipulated in clauses 1, 2, 3, 4, 5 of Article 17 of Decree 125/2020/ND-CP.

- Violations specified at points b, d, e clause 1 Article 17 Decree 125/2020/ND-CP discovered after the tax submitting deadline but do not decrease taxable amounts or have not been refunded, or do not increase exempt or reduced amounts, are penalized as administrative violations under clause 3 Article 12 of Decree 125/2020/ND-CP.

What cases of extensions for submitting tax declarations in Vietnam?

Pursuant to clause 1 Article 46 of the Law on Tax Administration 2019 which provides regulations on cases eligible for extensions on submitting tax declarations:

(1) Taxpayers unable to submit tax declarations on time due to natural disasters, catastrophes, epidemics, fires, or unexpected accidents may be granted an extension by the head of the directly managing tax authority.

(2) The extension period shall not exceed 30 days for submitting monthly, quarterly, yearly tax declarations, or taxes based on each tax obligation occurrence; 60 days for submitting tax finalization returns from the end of the tax submitting deadline.

(3) Taxpayers must submit a written request for an extension of the tax declaration submitting deadline to the tax authority before the tax submitting deadline expires, detailing reasons for the extension with verification by the commune-level People's Committee or the police department where the situation arises as stipulated in clause 1 Article 46 Law on Tax Administration 2019.

(4) Within 3 working days of receiving the request for a tax declaration submitting extension, the tax authority must provide a written response to the taxpayer regarding the approval or rejection of the extension request.