What are rules for imposition of penalties for tax administrative offences in Vietnam?

Rules for imposition of penalties for tax administrative offences in Vietnam

According to Article 136 Law on Tax Administration 2019, the rules for imposition of penalties for tax administrative offences are as follows:

- Administrative penalties for tax management violations are carried out in accordance with the provisions of the law on tax management and the law on handling administrative violations.

- Administrative violations in the use of illegal invoices, the illegal use of invoices, or the use of non-compliant invoices leading to tax deficiencies or tax evasion will not be sanctioned as invoice violations but will be sanctioned as tax management violations.

- The maximum fine for the act of misreporting leading to a deficiency in the payable tax amount, or increasing the exempted, reduced, refunded, non-collected tax amount, or for tax evasion, shall be implemented according to the provisions of the Law on Tax Administration 2019.

- For the same act of administrative violation in tax management, the fine for an organization is twice the amount of the fine for an individual, except for the fine for the act of misreporting leading to a deficiency in the payable tax amount, or increasing the exempted, reduced, refunded, non-collected tax amount, or for tax evasion.

- In cases where taxpayers are subject to tax determination according to the provisions of Articles 50 and 52 of the Law on Tax Administration 2019, depending on the nature and extent of the violation, they may be subject to administrative penalties for tax management violations according to the provisions of the Law on Tax Administration 2019.

- Authorized personnel discovering tax administrative offences during duty execution must document the administrative violation as prescribed.

In cases where taxpayers register, file tax returns, and settle taxes electronically, if the electronic notification receipt specifies a clear act of administrative violation in tax management, this notification serves as the basis for issuing the decision on the sanction.

- In cases where the violation of tax management laws amounts to a criminal offense, the provisions of criminal law shall apply.

Rules for imposition of penalties for tax administrative offences in Vietnam (Image from the Internet)

Time limits for imposition of penalties for tax administrative offences in Vietnam

According to Article 137 Law on Tax Administration 2019, the Time limits for imposition of penalties for tax administrative offences is as follows:

- For violations of tax procedures, the limitation period for penalties is 2 years from the date of the violation.

- For acts of tax evasion not at the level of criminal prosecution, or misreporting leading to a deficiency in the payable tax amount, or increasing the exempted, reduced, refunded, non-collected tax amount, the limitation period for penalties is 5 years from the date of the violation.

• After the expiration of the Time limits for imposition of penalties for tax administrative offences, taxpayers will not be sanctioned but must still pay the deficiency in tax, evaded tax, erroneously exempted, reduced, refunded, non-collected tax amounts, along with late payment interest to the state budget for up to 10 years from the date of detecting the violation.

In cases where taxpayers do not register, they must pay the deficiency in tax, evaded tax, along with late payment interest for the entire period from the date of detecting the violation.

Forms of penalties, fines and remedial measures for tax administrative offences in Vietnam

According to Article 138 Law on Tax Administration 2019, the forms of penalties, fines and remedial measures for tax administrative offences are as follows:

• Forms of administrative penalties for tax management violations include:

- Warning;

- Fine.

• The fine levels for administrative penalties in tax management are prescribed as follows:

- The maximum fine for acts as prescribed in Article 141 of the Law on Tax Administration 2019 is implemented according to the provisions of the law on handling administrative violations;

- A fine of 10% calculated on the amount of tax under-reported or the increased tax amount in case of exemption, reduction, refund, non-collection of tax for acts as specified in point a clause 2 Article 142 of the Law on Tax Administration 2019;

- A fine of 20% calculated on the amount of tax under-reported or the increased tax amount in case of exemption, reduction, refund, non-collection of tax for acts as specified in clause 1 and points b, c clause 2 Article 142 of the Law on Tax Administration 2019;

- A fine ranging from 1 to 3 times the evaded tax amount for acts as specified in Article 143 of the Law on Tax Administration 2019.

• Remedial measures for administrative penalties in tax management include:

- To compel the full payment of evaded, deficient tax amounts;

- To compel the full payment of wrongly exempted, reduced, refunded, non-collected tax amounts.