When is a taxpayer exempt from administrative fines for violations against tax procedures in Vietnam?
When is a taxpayer exempt from administrative fines for violations against tax procedures in Vietnam?
Based on Clause 1, Article 140 of the Law on Tax Administration 2019 as stipulated below:
Exemption from administrative fines for violations against tax procedures
- Taxpayers who are fined for administrative violations related to tax management but suffer damage in force majeure circumstances as stipulated in Clause 27, Article 3 of this Law are exempt from fines. The total exempted fine amount shall not exceed the value of the damaged assets or goods.
- No exemption from administrative fines for violations against tax procedures is granted in cases where the administrative violation penalty decision regarding tax management by the tax administration authority or authorized state authority has been fully executed.
- The Government of Vietnam shall detail this Article.
According to the above regulations, a taxpayer is exempt from fines if they suffer damage in force majeure circumstances, but the total exempted fine amount shall not exceed the value of the damaged assets or goods.
Force majeure circumstances include:
- Taxpayers suffering material damage due to natural disasters, calamities, epidemics, fires, unexpected accidents;
- Other force majeure cases as prescribed by the Government of Vietnam.
What are the fines in handling administrative violations against tax procedures in Vietnam?
Based on Clause 2, Article 138 of the Law on Tax Administration 2019 regulated as follows:
penaltiess, fines, and remedial measures
2. Fines in handling administrative violations against tax procedures are regulated as follows:
a) The maximum fine for acts specified in Article 141 of this Law is applied according to regulations on handling administrative violations;
b) A fine of 10% of the under-declared tax amount or the increased tax amount in cases of exemption, reduction, refund, or non-collection for acts specified at Point a, Clause 2, Article 142 of this Law;
c) A fine of 20% of the under-declared tax amount or the increased tax amount in cases of exemption, reduction, refund, or non-collection for acts specified at Clause 1 and Points b, c, Clause 2, Article 142 of this Law;
d) Fines ranging from 1 to 3 times the evaded tax amount for acts specified in Article 143 of this Law.
- Remedial measures in handling administrative violations against tax procedures include:
a) Obligation to pay the full amount of evaded, underpaid tax;
b) Obligation to fully repay the tax amounts that were wrongly exempted, reduced, refunded, or not collected.
Thus, the fines in handling administrative violations against tax procedures are specified as follows:
- The maximum fine for acts specified in Article 141 of the Law on Tax Administration 2019 is applied according to regulations on handling administrative violations;
- A fine of 10% of the under-declared tax amount or the increased tax amount in cases of exemption, reduction, refund, or non-collection for acts specified at Point a, Clause 2, Article 142 of the Law on Tax Administration 2019;
- A fine of 20% of the under-declared tax amount or the increased tax amount in cases of exemption, reduction, refund, or non-collection for acts specified at Clause 1 and Points b, c, Clause 2, Article 142 of the Law on Tax Administration 2019;
- Fines ranging from 1 to 3 times the evaded tax amount for acts specified in Article 143 of the Law on Tax Administration 2019.
What is the time limit for handling administrative violations related to tax management in Vietnam?
Based on Article 137 of the Law on Tax Administration 2019, the time limit for handling administrative violations related to tax management is specified as follows:
- For tax procedure violations, the time limit for handling is 2 years from the date the violation was committed.
- For tax evasion actions not subject to criminal prosecution, incorrect declaration actions leading to tax deficits or increased amounts in cases of exemption, reduction, refund, or non-collection, the time limit is 5 years from the date the violation was committed.
Beyond the time limit for handling administrative violations related to tax management, the taxpayer is not subject to penalties but shall still pay the full amount of underpaid tax, evaded tax, misallocated tax exemptions, reductions, refunds, or exemptions, and late payment interest into the state budget within 10 years preceding the discovery of the violation. In cases where the taxpayer is not registered, they must pay the full amount for the entire period before the violation was discovered.
What are the penalties for administrative violations related to tax management in Vietnam?
Based on Clauses 1 and 2, Article 7 of Decree 125/2020/ND-CP stipulating the penalties for administrative violations related to tax management as follows:
(1) Main penalties: warnings and fines:
- Warning
Warnings are applied to non-serious tax procedure violations, invoice violations with mitigating circumstances, where the warning form is prescribed in Decree 125/2020/ND-CP.
- Fine
+ The maximum fine does not exceed VND 100,000,000 for organizations conducting administrative violations related to invoices. The maximum fine does not exceed VND 50,000,000 for individuals conducting administrative violations related to invoices.
+ The maximum fine does not exceed VND 200,000,000 for taxpayers as organizations conducting tax procedure violations. The maximum fine does not exceed VND 100,000,000 for taxpayers as individuals conducting tax procedure violations.
+ A fine of 20% of the under-declared tax amount or the over-granted tax exemption, reduction, refund, amount as specified for incorrect declarations leading to tax deficits or increases in the exempted, reduced, refunded tax amounts.
+ Fines from 1 to 3 times the evaded tax amount for tax evasion actions.
+ Fines equivalent to the non-appropriated amount into the state budget for violations as prescribed in Clause 1, Article 18 of Decree 125/2020/ND-CP.
(2) Additional form of sanction: suspension of invoice printing activity for a definite time.
Thus, there are two penalties for administrative violations related to tax management, including the main form of sanction and the additional form of sanction.
