What are penalties for tax evasion in the field of customs in Vietnam?

What acts are considered tax evasion in the field of customs in Vietnam?

Pursuant to Clause 1, Article 14 of Decree 128/2020/ND-CP, acts of tax evasion in the field of customs include the following acts:

(1) Using illegal documents, papers that do not correspond to the actual transaction to declare tax; arbitrarily erasing, modifying documents, resulting in a shortage of tax payable or an increase in tax exempted, reduced, refunded, non-collected;

(2) Incorrectly declaring commodity codes, tax rates, tax levels for goods that have been guided by the Ministry of Finance, customs authorities on commodity codes, tax rates, tax levels as per regulations;

(3) Violating the provisions at Points b, c, d Clause 3 Article 9 of Decree 128/2020/ND-CP where individuals or organizations do not pay the full amount of tax payable as prescribed before the establishment of the violation record;

(4) Performing export procedures but not exporting processed products; products manufactured for export; products exported overseas by export processing enterprises;

(5) Incorrectly declaring the quantity, type, processed products; products manufactured for export; products exported overseas by export processing enterprises; goods re-exported;

(6) Not declaring domestic purchased materials, supplies subject to export tax that constitute the exported processed product; incorrectly declaring the value of materials, supplies, components for export constituting processed products resulting in an increase in the amount of tax exempt for processed products upon re-importation into Vietnam;

(7) Using goods subject to non-taxable, tax-exempt, tax-exemption considered status, goods managed by a tariff quota not for declared purposes without declaring the conversion of use purpose to customs authorities;

(8) Incorrectly declaring the quantity, product name, type, quality, value, origin of imported goods from the non-tariff zone into the domestic area;

(9) Not recording in the accounting books regarding the revenue and expenditure related to determining the tax payable amount;

(10) Selling duty-free goods to improper subjects, quantities, or conditions as prescribed by law;

(11) Colluding with consignors to import goods for the purpose of tax evasion.

What are penalties for tax evasion in the field of customs in Vietnam? (Image from Internet)

What are penalties for tax evasion in the field of customs in Vietnam?

Pursuant to Clause 2, Article 14 of Decree 128/2020/ND-CP regulating administrative sanctions for acts of tax evasion in the field of customs as follows:

Sanctions for Tax Evasion Acts

2. Taxpayers committing violations under Clause 1 of this Article without being subject to criminal prosecution shall be fined as follows:

a) A fine equal to the amount of evaded tax in cases without aggravating circumstances;

b) In cases of aggravating circumstances, each aggravating circumstance increases the penalty by 0.2 times but does not exceed 3 times the amount of evaded tax.

If a taxpayer commits the tax evasion acts mentioned above in the customs field without being subject to criminal prosecution, they will be administratively fined the following amount:

- A fine equal to the amount of evaded tax in cases without aggravating circumstances;

- In cases with aggravating circumstances, each such circumstance increases the penalty by 0.2 times but does not exceed 3 times the amount of evaded tax.

In addition, taxpayers are required to remedy the consequences by paying the full amount of evaded tax for the violation.

If there are tax evasion acts according to (3), (8) without documents to declare additionally, the following fines apply:

- A fine ranging from 5,000,000 VND to 10,000,000 VND if the violation holds a value of less than 30,000,000 VND;

- A fine ranging from 10,000,000 VND to 20,000,000 VND if the violation holds a value from 30,000,000 VND to under 50,000,000 VND;

- A fine ranging from 20,000,000 VND to 40,000,000 VND if the violation holds a value from 50,000,000 VND to under 70,000,000 VND;

- A fine ranging from 40,000,000 VND to 60,000,000 VND if the violation holds a value from 70,000,000 VND to under 100,000,000 VND;

- A fine ranging from 60,000,000 VND to 80,000,000 VND if the violation holds a value of 100,000,000 VND or more without being subject to criminal prosecution.

Note: According to Point c, Clause 3, Article 5 of Decree 128/2020/ND-CP, the monetary fine for acts of tax evasion in the customs field is applicable to both individuals, business households, and organizations.

What is the time limit for imposing penalties for acts of tax evasion in the field of customs in Vietnam?

Based on Clause 1, Article 4 of Decree 128/2020/ND-CP regulating the time limit for administratively sanctioning tax management as follows:

Time limit for Administrative Sanctions in the Field of Customs

1. Time limit for administratively sanctioning tax management:

a) For administrative violations which are acts of tax evasion not subject to criminal prosecution, acts of incorrect declaration leading to insufficient tax payment or increased tax exemption, reduction, refund, non-collection, the time limit is 5 years from the date the violation is committed;

b) When the time limit for administrative sanctions on tax management has expired, taxpayers are not sanctioned but still must pay the full amount of insufficient tax, taxes exempted, reduced, refunded, non-collected incorrectly, or evaded, late payment into the state budget within ten years before the date of discovery of the administrative violation in tax management.

Thus, the time limit for administrative sanctions against acts of tax evasion in the customs field is 5 years from the date the violation is committed.

If more than 5 years have passed, taxpayers are not sanctioned but still must pay the full amount of evaded tax into the state budget within ten years before the date of discovering the violation.