When shall a fine which is 2 times as much as the amount of evaded tax be imposed for the act of tax evasion in Vietnam?

When shall a fine which is 2 times as much as the amount of evaded tax be imposed for the act of tax evasion in Vietnam?

Based on Clause 5, Article 17 of Decree 125/2020/ND-CP which stipulates the penalty for tax evasion as follows:

Penalty for tax evasion

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5. A fine three times the amount of the evaded tax is imposed on taxpayers who commit one of the actions specified in Clause 1 of this Article with three or more aggravating factors.

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Additionally, according to Clause 1, Article 17 of Decree 125/2020/ND-CP, tax evasion by taxpayers with one or more mitigating factors is regulated.

Therefore, tax evasion can be subject to a fine three times the amount of the evaded tax in cases where the taxpayer commits one of the following actions and has three or more aggravating factors:

- Failing to submit taxpayer registration files; failing to submit tax declaration files or submitting tax declaration files more than 90 days past the deadline or the extended deadline for submission, except as specified in points b, c, Clause 4 and Clause 5, Article 13 of Decree 125/2020/ND-CP;

- Not recording in the accounting books any receipts related to determining the payable tax amount, under-reporting, or incorrect reporting leading to a shortfall in the tax payable or an increase in tax refunds, exemptions, or reductions, except as stipulated in Article 16 of Decree 125/2020/ND-CP;

- Failing to issue invoices when selling goods or providing services, except when the taxpayer has declared taxes for the value of goods and services sold; issuing invoices incorrectly in terms of quantity, value of goods and services to declare taxes lower than reality and discovered after the tax declaration deadline;

- Using illegal invoices; illegally using invoices to declare taxes that reduce the amount payable or increase the amount refundable, exempt, or reduced;

- Using illegal documentation; illegal use of documents; using documents that do not accurately reflect the nature or actual value of transactions to wrongly determine the amount of tax payable, exempt, reduced, refundable; wrongly completing procedures and records to cancel materials or goods that reduce the amount of payable tax or increase the amount of refundable, exempt, reduced tax;

- Using goods under tax exemption, tax-free, or tax relief for purposes other than those declared without reporting the repurpose to the tax authorities;

- Conducting business activities during the declared temporary cessation or suspension without notifying the tax authorities, except as prescribed in point b, Clause 4, Article 10 of Decree 125/2020/ND-CP.

When shall a fine which is 2 times as much as the amount of evaded tax be imposed for the act of tax evasion in Vietnam? (Image from the Internet)

What are regulations on authority to impose administrative penalties for tax evasion in Vietnam?

Based on Article 32 of Decree 125/2020/ND-CP, which regulates the authority of tax agencies to impose administrative penalties regarding tax and invoicing violations, as follows:

Authority to impose administrative penalties on tax and invoice violations by tax agencies

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3. The Head of the District Tax Office within their jurisdiction has the authority to:

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c) Impose fines for actions specified in Articles 16, 17, and 18 of this Decree;

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4. The Director of the Tax Department within their jurisdiction has the authority to:

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c) Impose fines for actions specified in Articles 16, 17, and 18 of this Decree;

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5. The Director General of the General Department of Taxation has the authority:

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c) Impose fines for actions specified in Articles 16, 17, and 18 of this Decree;

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Moreover, according to Clause 2, Article 139 of the Law on Tax Administration 2019 which regulates the authority to impose administrative penalties concerning tax administration as follows:

Authority to impose administrative penalties concerning tax administration

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2. Heads of tax administration agencies, Directors of the Anti-Smuggling Investigation Department under the General Department of Customs have the authority to issue decisions on administrative penalties for actions specified in Articles 142, 143, 144, and 145 of this Law.

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Thus, the authority to impose administrative penalties for tax evasion belongs to:

- The Head of the District Tax Office

- The Director of the Tax Department

- The Director General of the General Department of Taxation

- The Director of the Anti-Smuggling Investigation Department under the General Department of Customs

What is the time limits for imposition of administrative penalties for tax evasion in Vietnam?

According to Clause 2, Article 137 of the Law on Tax Administration 2019, which regulates the time limits for imposition of administrative penalties concerning tax administration as follows:

Time limits for imposition of administrative penalties concerning tax administration

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2. For actions of tax evasion that do not amount to criminal prosecution, actions of incorrect declaration leading to tax shortfall or increase in tax exemptions or refunds, the statute of limitations for penalty is 05 years from the date of the violation.

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Thus, the time limits for imposition of administrative penalties for tax evasion that does not amount to criminal prosecution is 05 years from the date of the violation.

Note: Beyond the time limits for imposition of administrative penalties for tax administration, the taxpayer will not be penalized but must pay the full amount of the underpaid tax or evaded tax to the state budget within 10 years retrospectively from the date the violation is discovered.