Is using fraudulent invoices or evidencing documents an act of illegally using invoices and records in Vietnam?

What are invoices and records?

(1) Invoice

According to Clauses 1, 2, 3 Article 3 Decree 123/2020/ND-CP, an invoice is an accounting record created by organizations or individuals selling goods or providing services, to record information on the sale of goods or providing services. Invoices are presented in one of two forms:

- Electronic invoice is an invoice with or without a tax authority code represented in electronic data form, created by organizations or individuals selling goods, providing services by electronic means to record information on the sale of goods, providing services according to regulations on accounting and tax laws, including cases where invoices are generated from cash registers connected to electronic data transfer with tax authorities.

- Invoices printed by tax authorities are paper-form invoices printed by the tax authority to be sold to eligible organizations or individuals in circumstances stipulated in Article 23 of Decree 123/2020/ND-CP for use when selling goods or providing services.

(2) Record

According to Clauses 4, 5, 6 Article 3 Decree 123/2020/ND-CP, a record is a record used to capture information on deductible tax amounts, tax collection, fees, and charges belonging to the state budget according to tax management law. records under this Decree include personal income tax deduction records, tax receipts, fees, and charges represented in electronic form or self-printed.

- Electronic records include types of records, receipts as per Clause 4 Article 3 Decree 123/2020/ND-CP represented in electronic data, issued by organizations or individuals responsible for tax deduction to the taxpayer or by tax, fees, and charges collection organizations to the taxpayer by electronic means under laws on fees, charges, and taxes.

- Self-printed records include types of records, receipts as per Clause 4 Article 3 Decree 123/2020/ND-CP represented in paper form, printed by the tax authority or tax, fees, and charges collection organizations as per the template for use or self-printed using computing devices, cash registers, or other devices when deducting tax, collecting tax, fees, charges as per laws on fees, charges, and taxes.

Is using fraudulent invoices or evidencing documents an act of illegally using invoices and records in Vietnam?

According to Clause 2 Article 4 Decree 125/2020/ND-CP, acts of illegally using invoices and records are as follows:

Acts of illegally using invoices and records; illegally using invoices and records

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2. The use of invoices and records in the following cases is deemed as an act of illegal use of invoices and records:

a) Invoice, record not fully recording mandatory contents as stipulated; erased, corrected invoices are non-conformable;

b) Fraudulent invoices or evidencing documents (invoices and records recording economic content items which are false in part or whole); invoices reflecting inaccurate transactions or creating false, fraudulent invoices;

c) Invoices with discrepancies on goods, services values, or errors on mandatory fields between invoice copies;

d) Invoices used in rotation during goods transport in circulation or using invoices of one type of goods, services to justify others;

đ) invoices and records of other organizations, individuals (excluding tax authority invoices and delegated invoice creation) to legalize purchased or sold goods, services;

e) invoices and records that tax authorities, police, or other functional agencies have concluded to be illegal use.

Using fraudulent invoices or evidencing documents is not just an illegal use of invoices and records but is an act of illegal use of invoices and records.

Is using fraudulent invoices or evidencing documents an act of illegally using invoices and records in Vietnam? (Image from Internet)

Is using fraudulent invoices or evidencing documents considered tax evasion in Vietnam?

According to Article 17 Decree 125/2020/ND-CP:

Penalties for acts of tax evasion

1. A fine equal to the amount of evaded tax shall be imposed on taxpayers with one or more mitigating circumstances who commit one of the following violations:

a) Failure to submit taxpayer registration records; failure to submit tax declaration records or submitting tax declaration records 90 days past the due date or extension date as stipulated, except in cases specified in Points b, c Clause 4 and Clause 5 of Article 13 of this Decree;

b) Failure to record in the accounting books income relating to the calculation of taxable amounts, non-declaration, false declaration leading to reduced payable tax or increased refundable, exemptible, or reducible tax amounts, except for acts stipulated in Article 16 of this Decree;

c) Failure to issue invoices upon the sale of goods, services except where taxpayers have declared taxes for the value of sold goods, provided services in the corresponding tax period; issuing invoices incorrectly on quantity, value of goods, services to declare lower taxes than actual and discovered after the tax return submission deadline;

d) Using illegal invoices; illegal use of invoices to declare tax leading to reduced tax payable or increased refundable, exemptible, or reducible tax amounts;

dd) Using illegal records; illegal use of records; using records, records not reflecting the true nature of transactions or actual transaction values to incorrectly determine the payable tax amounts, refundable, exemptible, reducible tax amounts; creating false, fake records for material, goods disposal to reduce payable tax or increase refundable, exemptible, reducible tax amounts;

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Using fraudulent invoices or evidencing documents is considered tax evasion when those invoices or records are used to declare taxes leading to reduced payable tax or increased refundable, exemptible, reducible tax amounts; or issuing invoices incorrectly on quantity, value of goods, services to declare lower taxes than actual and discovered after the tax return submission deadline.