What are the exceptions to tax or invoice-related administrative penalties in Vietnam?

What are the exceptions to tax or invoice-related administrative penalties in Vietnam?

Under Article 9 of Decree 125/2020/ND-CP, the exceptions to tax or invoice-related administrative penalties in Vietnam include:

- Exceptions to administrative penalties prescribed in laws on handling of administrative violations shall be treated as the exceptions to tax or invoice-related administrative penalties.

Taxpayers’ delay in carrying out electronic tax or invoice-related procedures due to technical problems of information technology systems that are informed on tax authorities’ web portals shall constitute the act of violation caused by force majeure events under the provisions of clause 4 of Article 11 in the Law on Handling Administrative Violations 2012.

- Taxpayers’ commission of tax-related administrative violations due to the execution of instructional documents, decisions to respond to such violations of competent tax authorities or state regulatory agencies related to the tasks of determining taxpayer’s tax obligations (including those issued before the effective date of Decree 125/2020/ND-CP shall be treated as exceptions to administrative penalties for tax-related violations or fines for late payment of taxes, except if taxpayers’ tax-related administrative violations are discovered after receipt of conclusions of tax inspections and examinations carried out at the taxpayer’s offices that none of the taxpayer’s defects arising from the declaration and calculation of taxes payable or tax exemptions, reductions or refunds have been discovered yet.

- If, after making the false declaration, the taxpayer has supplemented tax returns and, of their own accord, has paid taxes before the time of the tax authority’s announcement of their decisions to conduct tax inspections or examinations at the taxpayer’s offices, or before the time of the tax authority’s discovery thereof without needing to carry out these inspections or examinations, or before the time of other competent authorities’ discovery thereof, the act of false declaration committed in this situation shall be exempted from any tax-related administrative penalties.

- None of administrative penalties for tax-related violations shall be imposed upon persons directly carrying out personal income tax finalization procedures if they delay filing personal income tax finalization applications to claim their tax refunds; upon sole proprietorship households and sole proprietors subject to taxation or fixing of the constant tax rates as provided in Article 51 of the Law on Tax Administration 2019.

- During the extension of the time limit for tax return submission, taxpayers shall be exempted from any administrative penalties for violations related to the time limit for submission of tax returns.

What are the exceptions to tax or invoice-related administrative penalties in Vietnam? (Image from the Internet)

What are the two main sanctioning forms for tax or invoice-related administrative violations in Vietnam?

Under Clause 1, Article 7 Decree 125/2020/ND-CP, the two main sanctioning forms for tax or invoice-related administrative violations include Cautions and fines:

(1) Cautions

Cautions shall apply to violations arising from implementation of tax or invoice-related procedures which are not serious, are committed under mitigating circumstances and are classified as those subject to cautions under this Decree.

(2) Fines

Fines not greater than VND 100,000,000 shall be imposed on entities committing invoice-related violations. Fines not greater than VND 50.000.000 shall be imposed on entities committing invoice-related violations.

Fines not greater than VND 200,000,000 shall be imposed on taxpayers that are entities committing tax-related violations. Fines not greater than VND 100,000,000 shall be imposed on taxpayers that are persons committing tax-related violations.

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 any violation arising from the act of false declaration leading to the underpayment of tax amount or the increase in the amount of tax exemption, reduction or refund.

A fine which is 1 or 3 times as much as the evaded tax amount shall be imposed for any tax evasion act.

Fines equaling the amounts of tax, the deferred amounts of tax or the fines not paid into the state budget (minus minimum balances of demand accounts subject to regulations of commercial banks providing fiduciary payment services for taxpayers) shall be imposed upon commercial banks defaulting on liabilities to withdraw money from taxpayer's accounts to pay into the state budget’s accounts upon tax authority’s request, except when taxpayer’s accounts opened at these commercial banks have zero balance, or all balance has been left zero due to the remittance of all money left in taxpayer’s accounts to the state budget's accounts if such remittance is not sufficient to pay off all taxes owed by the taxpayer.

What are the remedial measures for tax or invoice-related administrative violations in Vietnam?

Under Clause 3, Article 7 of Decree 125/2020/ND-CP, remedial measures for invoice-related administrative violations in Vietnam include:

(1) Compelling the full payment into the state budget in case of the underpayment of tax amounts, the higher-than-prescribed enjoyment of tax exemption, reduction or refund.

(2) Compelling the re-adjustment of losses, the carried-forward amounts of input VAT deductions.

(3) Compelling the submission of the application for changes in tax registration information; the re-submission and supplementary submission of documents included in tax returns; the submission of tax returns and appendices; the provision of information.

(4) Compelling the implementation of regulatory procedures for the release of invoices.

(5) Compelling the issuance of invoices as required by laws.

(6) Compelling the cancellation or destruction of invoices and related printouts.

(7) Compelling the issuance and submission of invoice-related notices or reports.

(8) Compelling the transfer of electronic invoice data.

(9) Compelling the disgorgement of illegal gains from commission of administrative violations.