What is a fraudulent invoice? What is the administrative penalty for using fraudulent invoices in Vietnam?
What is a fraudulent invoice?
Based on point b, clause 2, Article 4 of Decree 125/2020/ND-CP, which governs the act of using illegal invoices and documents; illegal use of invoices and documents is regulated as follows:
Acts of using illegal invoices and documents; illegal use of invoices and documents
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2. Using invoices and documents in the following cases is considered as an illegal use of invoices and documents:
a) Invoices and documents that do not record all mandatory contents as prescribed; invoices are altered, edited non-conformably;
b) fraudulent invoices and documents (invoices and documents containing data and economic content but where the sale of goods or services is partially or wholly untrue); invoices reflecting non-realized values or creating false invoices, counterfeit invoices;
c) Invoices with discrepancies in the value of goods, services, or discrepancies in mandatory criteria among invoice copies;
d) Invoices used for warehousing circulation during the transportation of goods or using invoices for one type of goods, services to prove another type of goods, services;
dd) Invoices and documents of other organizations, individuals (except for invoices of tax authorities and cases appointed to issue invoices) to legitimize purchased goods, services or sold goods, services;
e) Invoices and documents that tax authorities or police or other functional agencies have concluded are used illegally.
Thus, according to the above-stipulated regulation, a fraudulent invoice is an invoice that contains data and economic content but where the sale of goods or services is completely or partially non-existent. The act of using fraudulent invoices is considered an illegal use of invoices and documents.
What is a fraudulent invoice? What is the administrative penalty for using fraudulent invoices in Vietnam? (Image from Internet)
What are the administrative penalties for using fraudulent invoices in Vietnam?
In Article 28 of Decree 125/2020/ND-CP, it is stipulated concerning the administrative penalties for the illegal use of invoices and documents, including the action of using fraudulent invoices as follows:
- A fine ranging from 20,000,000 VND to 50,000,000 VND for acts of illegal use of invoices as stipulated in Article 4 of Decree 125/2020/ND-CP, except in the cases specified at point đ, clause 1, Article 16 and point d, clause 1, Article 17 of Decree 125/2020/ND-CP.
- Remedial measure: Mandatory cancellation of used invoices.
Note: The above fine is the imposed monetary fine applied to organizations. For the same administrative tax or invoice violation, the fine imposed on organizations is double that imposed on individuals (clause 5, Article 5 and clause 4, Article 7 of Decree 125/2020/ND-CP)
May the use of fraudulent invoices lead to criminal liability in Vietnam?
Based on Article 200 of the Criminal Code 2015 (amended by clause 47, Article 1 of the Law amending the Criminal Code 2017) as follows:
Tax Evasion Offense
1. Any person who commits one of the following acts of tax evasion with an amount ranging from 100,000,000 VND to less than 300,000,000 VND, or less than 100,000,000 VND but has been administratively sanctioned for tax evasion or has been convicted of this crime or one of the crimes specified in Articles 188, 189, 190, 191, 192, 193, 194, 195, 196, 202, 250, 251, 253, 254, 304, 305, 306, 309 and 311 of this Code, has not been erased, and continues to violate, shall be fined from 100,000,000 VND to 500,000,000 VND or imprisoned from 03 months to 01 year:
a) Failing to submit taxpayer registration documentation; failing to submit tax declaration documentation; submitting tax declaration documentation more than 90 days beyond the deadline or extension granted by law;
b) Failing to record in accounting books revenues for determining tax payable;
c) Failing to issue invoices for goods sold, services rendered, or recording invoice values lower than actual payment values of goods, services sold;
d) Using illegal invoices and documents to account for goods, raw materials input in activities incurring tax obligations, thus reducing the payable tax or increasing tax exemptions, tax reductions, tax credits, tax refunds;
dd) Using other illegal documents to incorrectly determine payable tax, tax refundable;
e) Declaring incorrectly with actual goods exported, imported without filing a supplemental tax declaration after goods clearance, if not belonging to cases stipulated in Articles 188 and 189 of this Code;
g) Intentional non-declaration or misstatement about taxes for exported, imported goods, if not within cases stipulated in Articles 188 and 189 of this Code;
h) Colluding with the sender to import goods, if not in cases prescribed in Articles 188 and 189 of this Code;
i) Using goods exempt from tax, tax-free, or tax-considered-free incorrectly, without reporting the changed usage purpose to tax authorities.
2. Committing the crime under any of these circumstances shall be fined from 500,000,000 VND to 1,500,000,000 VND or imprisoned from 01 to 03 years:
a) Having an organization;
b) Tax evasion amounting from 300,000,000 VND to less than 1,000,000,000 VND;
c) Abusing positions, powers;
d) Committing the crime twice or more;
dd) Dangerous recidivism.
3. Committing tax evasion with an amount of 1,000,000,000 VND or more, shall be fined from 1,500,000,000 VND to 4,500,000,000 VND or imprisoned from 02 to 07 years:
4. The offender can also be fined from 20,000,000 VND to 100,000,000 VND, prohibited from holding positions, banned from practicing certain professions or doing certain jobs for 01 to 05 years, or have part or all of their assets confiscated.
5. Corporate legal entities committing offenses under this Article shall be fined as follows:
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From the aforementioned regulation, it can be seen that if individuals or organizations use fraudulent invoices to evade taxes, with amounts between 100,000,000 VND and less than 300,000,000 VND, or less than 100,000,000 VND but have previously been administratively sanctioned for tax evasion or convicted of this crime, or one of the crimes in Articles 188, 189, 190, 191, 192, 193, 194, 195, 196, 202, 250, 251, 253, 254, 304, 305, 306, 309, and 311 of the Criminal Code 2015, without an erased record, and reoffend, individuals or organizations in violation will be fined from 100,000,000 VND to 500,000,000 VND or face criminal charges for tax evasion from 03 months to 01 year. Additionally, if an individual evades taxes with an amount of 1,000,000,000 VND or more, they may be fined up to 4,500,000,000 VND or imprisoned for up to 07 years.
Thus, if an organization or individual issues fraudulent invoices for the purpose of tax evasion, they may be criminally liable with imprisonment of up to 7 years.
