What is the illegal use of invoices in Vietnam? How much is the penalty for illegal invoice use in Vietnam?
What is the illegal use of invoices in Vietnam?
Based on Clause 9, Article 3 of Decree 123/2020/ND-CP, the illegal use of invoices is defined as using invoices in the following cases:
(1) Using counterfeit invoices;
(2) Using invoices that have no value or have expired;
(3) Using invoices that have been suspended during the enforcement period by means of invoice usage suspension, except for the case of permissible use as notified by the tax authority;
(4) Using electronic invoices not registered for use with the tax authority;
(5) Using electronic invoices without the tax authority's code in cases where such a code is required;
(6) Using invoices for goods or services with an issue date after the tax authority has determined that the seller is not operating at the registered business address with the competent state authority;
(7) Using invoices for goods or services with an issue date before the determination that the invoice issuer is not operating at the registered business address with the competent state authority, or before a tax authority notification about the issuer's inactivity at the registered business address, but a conclusion has been reached by the tax authority, police, or other competent authorities that the invoice is illegal.
What is the illegal use of invoices in Vietnam? How much is the penalty for illegal invoice use in Vietnam? (Image from the Internet)
How much is the fine for illegal invoice use in Vietnam?
According to Article 28 of Decree 125/2020/ND-CP, the penalty for illegal invoice use is as follows:
Penalty for using illegal invoices and illegally using invoices
- A fine ranging from VND 20,000,000 to VND 50,000,000 for acts of illegal invoice use, as specified in Article 4 of this Decree, except for cases specified at Point đ, Clause 1, Article 16, and Point d, Clause 1, Article 17 of this Decree.
- Measures to remediate consequences: Compulsory cancellation of used invoices.
Additionally, as stated in Clause 4, Article 7 of Decree 125/2020/ND-CP, the principles for applying fines are regulated as follows:
Form of penalties, remedial measures, and principles for applying fines for administrative violations regarding taxes and invoices
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- Principles for applying fines
a) The fine levels specified in Articles 10, 11, 12, 13, 14, 15, Clauses 1 and 2, Article 19, and Chapter III of this Decree are fines applicable to organizations.
For taxpayers being households or business households, the fine level is applied as it is for individuals.
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Moreover, Clause 5, Article 5 of Decree 125/2020/ND-CP stipulates the principles for punishing administrative violations related to tax:
Principles of sanctioning administrative violations regarding tax and invoices
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- For the same administrative violation concerning tax and invoices, the fine for organizations is twice the fine for individuals, except for fines for violations specified in Articles 16, 17, and 18 of this Decree.
Thus, through the regulations above, it can be observed that organizations engaged in illegal invoice use can face administrative fines ranging from VND 20,000,000 to VND 50,000,000. Additionally, they are also subject to remedial measures requiring the cancellation of used invoices.
If the violating subjects are individuals, they may be subject to administrative fines ranging from VND 10,000,000 to VND 25,000,000.
Note: The administrative penalty for the act of using illegal invoices mentioned above does not apply in the following cases:
- Using illegal invoices to record the purchase value of goods and services to reduce the payable tax amount or increase the refunded tax amount, exempted or reduced tax amount; however, when inspected by the tax authority, the buyer can prove that the violation of illegal invoice use is the seller's fault, and the buyer has accounted properly according to regulations.
- Using illegal invoices to declare tax, thereby reducing the tax payable or increasing the tax amount refunded, exempted, or reduced.
What is the time limit for imposion of administrative violations involving invoices in Vietnam?
According to Clause 1, Article 8 of Decree 125/2020/ND-CP, amended by Clause 1, Article 1 of Decree 102/2021/ND-CP, the time limit for imposion of administrative violations in tax and invoices is regulated; the duration within which one is considered not yet penalized; and the duration for tax recovery is outlined as follows:
Time limit for imposion of administrative violations regarding tax and invoices; duration considered not yet penalized; duration for tax recovery
- time limit for imposion of administrative violations concerning invoices
a) The time limit for imposion of administrative violations in terms of invoices is 02 years.
b) The start date for the time limit for imposion of administrative violations regarding invoices is stipulated as follows:
For administrative violations currently being conducted as specified in Point c of this clause, the statute of limitations is calculated from the date the authorized official discovers the violation.
For completed administrative violations as specified in Point d of this clause, the statute of limitations is calculated from the date the violation ends.
c) Ongoing administrative violations regarding invoices are those regulated in Clause 4, Article 21; Point b, Clause 2, and Clause 3, Article 23; Clauses 2 and 5, Article 24; Point b, Clause 3, Article 25; Point b, Clause 2, and Points b, c, d, Clause 3, Article 27; Point b, Clause 5, Article 29; Point b, Clause 3, Article 30 of this Decree.
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The time limit for imposion of administrative violations regarding invoices is 02 years. The point in time from which this limitation is counted is specifically regulated as follows:
- For ongoing violations: The statute of limitations is counted from the date the competent authority discovers the violation.
- For concluded violations: The statute of limitations is counted from the date the violation ends.
