What are the acts of illegal use of invoices and documents in Vietnam?

What are the acts of illegal use of invoices and documents in Vietnam?

Pursuant to Clause 2, Article 4 of Decree 125/2020/ND-CP, the acts of illegal use of invoices and documents include:

- Invoices and documents that do not fully record mandatory contents as prescribed; invoices that are erased or altered improperly;

- False invoices or documents (invoices or documents that record economic transaction details, but the sale of goods or services is partially or entirely non-existent); invoices that do not reflect the actual value incurred or issued under false pretenses;

- Invoices with discrepancies in the value of goods and services or discrepancies in mandatory details between invoice copies;

- Invoices used repeatedly during the transportation stage or using invoices of certain goods and services to validate other goods and services;

- Invoices and documents of other organizations or individuals (except for invoices from tax authorities and cases authorized to issue invoices) used to validate purchased or sold goods and services;

- Invoices and documents that tax authorities, police, or other competent agencies have concluded are used illegally.

What are the acts of illegal use of invoices and documents in Vietnam? (Image from the Internet)

Is the illegal use of invoices considered tax evasion in Vietnam?

Pursuant to Article 17 of Decree 125/2020/ND-CP, it is stipulated as follows:

Penalties for tax evasion acts

1. A fine of one time the amount of tax evaded applies to taxpayers with one or more extenuating circumstances when committing one of the following violations:

a) Failure to submit taxpayer registration dossiers; failure to submit tax declaration dossiers or submission of tax declaration dossiers more than 90 days after the deadline, except as prescribed at points b, c Clause 4, and Clause 5 Article 13 of this Decree;

b) Not recording in accounting books the revenues related to determining the payable tax amount, incorrect declarations leading to a reduced payable tax amount or an increased refundable, exempted, or reduced tax amount, except for acts prescribed in Article 16 of this Decree;

c) Not issuing invoices when selling goods or services unless the taxpayer has declared tax on the value of goods and services sold, provided in the corresponding tax period; issuing invoices with incorrect quantities or values of goods or services to declare tax lower than actuality and being discovered after the tax declaration deadline;

d) Using illegal invoices; using unlawfully issued invoices to declare tax resulting in a reduced payable tax amount or an increased refundable, exempted, reduced tax amount;

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The use of illegal invoices is considered tax evasion when using those invoices for tax declarations to reduce the payable tax amount or increase the refundable, exempted, reduced tax amount.

Who is subject to administrative penalties for invoice violations in Vietnam?

Pursuant to Article 3 of Decree 125/2020/ND-CP, the subjects liable for administrative penalties for invoice violations include:

(1). Subjects liable for administrative penalties for invoice violations include:

- Taxpayers committing administrative violations of invoices.

In cases where taxpayers authorize other organizations or individuals to perform tax obligations as prescribed by tax and tax management laws, if the authorized party commits administrative violations specified in this Decree, the authorized organization or individual will be penalized under this Decree.

In cases where organizations or individuals, as per tax and tax management laws, are required to taxpayer registration, declare, and pay tax on behalf of taxpayers, and they commit administrative violations prescribed in this Decree, the organization or individual registering, declaring, and paying tax on behalf of the taxpayer will be subject to administrative penalties for tax violations as specified in this Decree.

- Organizations or individuals related to administrative invoice violations.

(2). Taxpayers who are organizations subject to administrative penalties for invoice violations include:

- Enterprises established and operating under the Law on Enterprises 2020, Law on Investment 2020, Law on Credit Institutions 2024, Law on Insurance Business 2022, Law on Securities 2019, Law on Petroleum 2022, Law on Commerce 2005, and other relevant legal documents; dependent units of enterprises, business locations directly declaring, paying tax, and using invoices;

- Public and non-public service units;

- Organizations established and operating under the Law on Cooperatives;

- Foreign organizations and enterprises, branches, representative offices of foreign merchants, operating offices of foreign contractors in Vietnam conducting business or generating income in Vietnam;

- State agencies committing administrative invoice violations where the violations do not fall under assigned state management duties;

- Cooperative groups and other organizations established according to legal regulations.