What are regulations on emphasized supervision of taxpayers showing signs of violations against tax laws in Vietnam?
What are regulations on emphasized supervision of taxpayers showing signs of violations against tax laws in Vietnam?
Based on Article 22 of Circular 31/2021/TT-BTC, provisions on emphasized supervision for taxpayers showing signs of violations against tax laws are as follows:
(1) Taxpayers subject to key tax supervision are those exhibiting any of the following signs:
- Taxpayers conducting transactions through banks that have suspicious signs as per anti-money laundering laws related to tax evasion or fraud.
- Taxpayers or their legal representatives are prosecuted for violations related to tax, invoices, or documentation.
- Taxpayers with high tax risk indicators in key sectors, or identified through tax authority management processes as requiring tax management supervision.
- Taxpayers selected from the list of non-compliant taxpayers stipulated in Article 10, or from the list of very high-risk or high-risk taxpayers as per section 1 Article 11 of Circular 31/2021/TT-BTC. This also includes taxpayers failing to explain, supplement information, or providing incomplete explanations/supplementation as required and within the timeline specified in written notices from tax authorities.
(2) Tax authorities at all levels are responsible for monitoring and supervising, applying suitable tax management measures for each case in (1).
(3) The General Department of Taxation specifies the collection, analysis of information, defining key supervision points, and suitable supervision measures in accordance with legal requirements for each period.
What are regulations on emphasized supervision of taxpayers showing signs of violations against tax laws in Vietnam? (Image from the Internet)
What actions are taken if tax evasion with criminal signs is detected during a tax audit in Vietnam?
According to Article 108 of the Law on Tax Administration 2019 provisions are as follows:
Handling tax inspection and audit results
- Based on the tax inspection and audit results, the head of the tax administration authority issues a decision on tax handling, retrieving the illegally refunded tax amount, and administratively fining tax management violations within their authority, or proposes another authorized person to issue a penalty decision. If administrative violations are clearly identified in the tax audit report, it shall be deemed an administrative violation record.
2. If tax evasion with criminal signs is detected during a tax inspection or audit, the tax authority transfers the dossier to the competent investigative agency for investigation in accordance with the law; the tax authority is responsible for cooperating with the prosecutorial agency in investigation, prosecution, and adjudication activities under legal regulations.
Thus, if tax evasion with criminal signs is detected during a tax inspection, the tax authority transfers the dossier to the competent investigative agency for investigation as per the law.
Note: The tax authority has the responsibility to cooperate with the prosecutorial agency in investigation, prosecution, and adjudication activities as per legal requirements.
What is the administrative penalty for tax evasion in Vietnam?
Based on Article 17 of Decree 125/2020/ND-CP, the penalties for tax evasion are stipulated as follows:
(1) A fine equivalent to the evaded tax amount is imposed on taxpayers with at least one mitigating circumstance when committing one of the following violations:
- Failure to submit taxpayer registration files; failure to submit tax declaration files or submission after 90 days from the deadline for submission or deadline for tax file extension, except as stipulated in point b, c clause 4 and clause 5 Article 13 of Decree 125/2020/ND-CP;
- Not recording in accounting books revenue related to determining tax payable, not declaring or declaring incorrectly leading to insufficient tax payable or excess tax rebates, exemptions, or reductions, except for violations stipulated in Article 16 of Decree 125/2020/ND-CP;
- Failure to issue invoices upon sale of goods or services, except where taxpayers have declared taxes on goods and services sold in the applicable tax period; issuing invoices with incorrect quantity or value to understate tax and discovered after the tax filing deadline;
- Using illegal invoices; unlawfully using invoices to declare tax to reduce payable tax or increase rebates or tax exemptions;
- Using illegal documents; unlawfully using documents or records not reflecting the true nature or value of transactions to incorrectly determine payable tax, rebates, or exemptions; drafting fictitious material or goods destruction records to reduce payable tax or increase rebates or exemptions;
- Using tax-exempt goods for improper purposes without declaring the conversion for usage or reporting taxes to the tax authority;
- Taxpayers conducting business during requested suspension periods without notifying the tax authority, except as stipulated in point b clause 4 Article 10 of Decree 125/2020/ND-CP.
(2) A fine of 1.5 times the evaded tax amount for violations in (1) without any aggravating or mitigating circumstances.
(3) A fine of twice the evaded tax for violations in (1) with one aggravating circumstance.
(4) A fine of 2.5 times the evaded tax amount for violations in (1) with two aggravating circumstances.
(5) A fine of three times the evaded tax amount for violations in (1) with three or more aggravating circumstances.
(6) Remedial measures:
- Mandatory payment of the evaded tax amount into the state budget for violations in (1), (2), (3), (4), and (5).
Should tax evasion as per (1), (2), (3), (4), and (5) exceed the time limit for penalties, the taxpayer will not be fined, but must pay the evaded tax and late payment interest per legal deadlines in clause 6 Article 8 of Decree 125/2020/ND-CP.
- Required adjustments to losses, deductible VAT credits on tax files (if any) for violations in (1), (2), (3), (4), and (5).
(7) Violations listed at point b, d, e clause 1 Article 17 of Decree 125/2020/ND-CP discovered after the tax filing deadline but do not reduce payable tax or affect rebate eligibility will be subject to administrative penalties per clause 3 Article 12 of Decree 125/2020/ND-CP.
Note: The tax evasion penalty rates mentioned above apply to individual taxpayers according to clause 4 Article 7 of Decree 125/2020/ND-CP.
Additionally, according to clause 5 Article 5 of Decree 125/2020/ND-CP:
Principles for administrative sanctions on tax and invoice violations
...
- For the same tax or invoice administrative violation, the monetary penalty for an organization is twice the penalty for an individual, except penalties for violations stipulated in Articles 16, 17, and 18 of this Decree.
As such, the administrative penalty for tax evasion committed by both individuals and organizations remains equivalent.
