What are the administrative fines for using illegal invoices and records in Vietnam?

What are the administrative fines for using illegal invoices and records in Vietnam?

Under Article 7, Article 16, Article 17, and Article 28 of Decree 125/2020/ND-CP, the administrative penalties for using illegal invoices and records are as follows:

(1) A fine which equals 20% of the underpaid tax amount or the higher-than-prescribed amount of tax exemption, reduction or refund shall be imposed for using illegal invoices or records for keeping accounting records of values of purchased goods or services to reduce taxes payable or increase amounts of tax refund, reduction or refund but, after the tax authority’s discovering this act through their tax inspection and examination, the buyer succeeds in proving that this act is performed through the seller’s fault and fully keeping accounts of these values in accordance with regulations.

(2) Using illegal invoices; illegally using invoices for declaring taxes with the intention of reducing taxes payable or increasing amounts of tax refund, exemption or reduction.

+ A fine of one time the evaded tax amount for taxpayers with at least one mitigating circumstance.

+ A fine of 1.5 times the evaded tax amount for taxpayers without any aggravating or mitigating circumstances.

+ A fine of twice the evaded tax amount for taxpayers with one aggravating circumstance.

+ A fine of 2.5 times the evaded tax amount for taxpayers with two aggravating circumstances.

+ A fine of three times the evaded tax amount for taxpayers with three or more aggravating circumstances.

(3) Using illegal invoices except for the scenarios described in (1) and (2) will be fined from 20,000,000 VND to 50,000,000 VND. In addition to the fine, the violator must cancel the used invoices.

(4) Using illegal records as described in (2) to declare tax, thereby reducing the payable tax amount or increasing the refundable, exempted, reduced tax amount, but not decreasing the payable tax amount or not yet refunded tax and not increasing the refundable, exempted, reduced tax amount shall face the following administrative penalties:

A fine of 5,000,000 VND to 8,000,000 VND for organizations;

A fine of 2,500,000 VND to 4,000,000 VND for individuals, households, or household businesses.

What are the administrative fines for using illegal invoices and records in Vietnam? (Image from the Internet)

What are the seven acts of using illegal invoices and records?

The seven acts of using illegal invoices and records are those stipulated in Article 4 of Decree 125/2020/ND-CP as follows:

(1)  Counterfeit invoices and records;

(2) Invoices and records not yet valid or expired;

(3) Invoices suspended during the period of enforcement of the invoice suspension penalty, except those permitted for use according to a tax authority's notice;

(4) E-invoices which are not registered with any tax authority;

(5) E-invoices of which tax authority's codes have not yet been granted if they are subject to the regulation under which e-invoices with tax authority’s codes are required;

(6) Invoices for purchase of goods or services with the invoicing date specified thereon which falls within the period from the date on which a tax authority determines that the seller is not doing business at the address registered with a competent regulatory authority;

(7) Invoices or records for purchase of goods or services with the invoicing date before the date on which it is determined that the invoicing party are not doing business at the address registered with competent regulatory authorities or, though the invoicing party’s notification of the closing of their business at the address already registered with the competent regulatory authority has not been sent to the tax authority, the tax authority or the police authority or other regulatory agency establishes that they are illegal.

Is using illegal invoices and records in Vietnam the same as using invoices and records illegally?

Article 4 of Decree 125/2020/ND-CP stipulates that acts of using invoices and records illegally are different from acts of using illegal invoices and records, indicating that these acts are distinct.

The acts of using invoices and records illegally include but are not limited to:

- Invoices or records that do not contain all compulsory contents as prescribed; invoices on which information is erased or corrected in breach of regulations;

- Fraudulent invoices or records (i.e. invoices or records containing details about goods and services which are not partially or entirely rendered); invoices incorrectly reflecting amounts due, or invoices issued as fraudulent, false or fake ones;

- Invoices with discrepancies in amounts paid for goods or services rendered, or discrepancies in required data fields between an invoice’s copies;

- Issued invoices reused with fictitious information for the purpose of transporting goods at the circulation stage or invoices for goods or services which are used for evidencing the rendering of the other goods or services;

- Invoices or records of other entities or persons (except if invoices are received from tax authorities and issued under trust) used for certifying the purchased goods or services or the sold goods or services;

- Invoices or records in the case where the tax, police or other regulatory authority concludes that they are used illegally.