When shall tax and invoice explanations be sent to tax authorities in Vietnam?

When shall tax and invoice explanations be sent to tax authorities in Vietnam?

Based on Clause 1, Article 37 of Decree 125/2020/ND-CP, business entities are required to submit written explanations for administrative offenses concerning taxes and invoices in the following instances:

- Administrative violations on taxes and invoices detected during tax inspections, audits, or cases recorded in electronic administrative violation records;

- Administrative violations stipulated in Articles 16, 17, 18; Clause 3 Article 20; Clause 7 Article 21; Articles 22 and 28 of Decree 125/2020/ND-CP, specifically including:

+ Incorrect declarations leading to tax underpayments or increasing the tax amount exempted, reduced, or refunded;

+ Tax evasion;

+ Administrative tax violations related to commercial banks, and guarantors of tax payment;

+ Printing or ordering invoices according to the invoice template already issued by other organizations or individuals or ordering duplicate numbers of the same invoice symbol.

+ Giving or selling invoices;

+ Unauthorized use of invoices or illegal usage of invoices.

When shall tax and invoice explanations be sent to tax authorities in Vietnam? (Image from the Internet)

What are regulations on the preservation and storage of Invoices, records in Vietnam?

Based on Article 6 of Decree 123/2020/ND-CP concerning the preservation and storage of invoices and records:

(1) Invoices and records must be preserved and stored ensuring:

- Safety, security, integrity, completeness, and free from alteration throughout the storage period;

- Properly and fully stored for the period specified by accounting laws.

(2) Electronic invoices and records are preserved and stored by electronic means. Agencies, organizations, and individuals may choose and apply methods fitting for preserving and storing electronic invoices and records according to their operational characteristics and technology capabilities. Electronic invoices and records must be readily printable or retrievable upon request.

(3) Invoices issued by the tax authority, records printed on demand or self-printed must be preserved and stored in accordance with the following requirements:

- Unissued invoices, records are stored and preserved in the warehouse according to policies for storing and preserving valuable records.

- Issued invoices, records in accounting units are stored according to the storage and preservation regulations for accounting records.

- Issued invoices, records in organizations, households, or individuals not being accounting units are stored and preserved as personal assets of those organizations, households, or individuals.

What are cases where no administrative penalty is imposed for tax or invoice-related violations in Vietnam?

According to the provisions of Article 9 of Decree 125/2020/ND-CP, there are 05 instances where no administrative penalty is imposed for tax or invoice-related violations:

- No administrative penalty on taxes and invoices in cases not subject to administrative penalties according to administrative violation handling laws.

Taxpayers who delay tax or invoice procedures electronically due to information technology system failures reported on the tax authority's electronic portal fall under acts of force majeure stipulated in Clause 4, Article 11 of the Law on Handling of Administrative Violations 2012.

- No administrative penalty for tax violations and no late payment interest for taxpayers violating tax obligations in accordance with guidance records, resolution decisions of tax agencies, or authorized state agencies concerning taxpayer's tax obligations (including guiding records, and resolution decisions issued before December 5, 2020), except cases where tax inspection or audit did not detect taxpayer faults in tax declaration, assessment at the taxpayer's office but subsequent administrative tax violations were identified.

- No administrative penalty for erroneous declarations if the taxpayer has supplemented the tax return and voluntarily paid the full due tax amount prior to tax authority's announcement of tax examination or audit decision at the taxpayer's office or before the tax authority discovered without inspection or audit at the taxpayer's office or before another authority detected it.

- No penalty for procedural violations concerning tax for individuals directly settling personal income tax returns late with a refundable tax amount; business household, individual business taxed according to Article 51 Tax Administration Law 2019.

- No penalty for overdue tax return submissions during the period the taxpayer is granted an extension for that tax return submission.