How much is the penalty for deferred submission of value added tax returns in Vietnam? How late can I declare tax before being fined for tax evasion in Vietnam?
How much is the penalty for deferred submission of value added tax returns in Vietnam?
According to Article 13 of Decree No. 125/2020/ND-CP stipulating penalties for violations against regulations on time limits for submission of tax returns as follows:
Penalties for violations against regulations on time limits for submission of tax returns
1. Penalties imposed in form of cautions shall be imposed for violations arising from filing tax returns from 01 to 05 days after expiration of the prescribed time limits under mitigating circumstances.
2. Fines ranging from VND 2,000,000 to VND 5,000,000 shall be imposed for the act of submitting tax returns from 01 to 30 days after expiration of the prescribed time limits, except the cases specified in clause 1 of this Article.
3. Fines ranging from VND 5,000,000 to VND 8,000,000 shall be imposed for the act of submitting tax returns from 31 to 60 days after expiration of the prescribed time limits.
4. Fines ranging from VND 8,000,000 to VND 15,000,000 shall be imposed for one of the following violations:
a) Filing tax returns from 61 to 90 days after expiration of the prescribed time limits;
b) Filing tax returns at least 91 days after expiration of the prescribed time limits if none of additional taxes is incurred;
c) Failing to submit tax returns if none of additional taxes is incurred;
d) Failing to submit annexes under regulations regarding tax administration by enterprises having related-party transactions, enclosing CIT finalization dossiers.
5. Fines ranging from VND 15,000,000 to VND 25,000,000 shall be imposed for the act of filing tax returns more than 90 days after the prescribed deadline if such act results in additional taxes to be paid, and the taxpayer has fully paid taxes, deferred amounts into the state budget before the time of the tax authority’s announcement of the decision on tax inspection and examination, or before the time of the tax authority’s issuance of the report on the deferred submission of tax returns under the provisions of clause 11 of Article 143 in the Law on Tax Administration.
In case where the fine amount prescribed in this clause is greater than the tax amount additionally incurred in the tax return, the maximum amount of fine for this act shall be equal to the tax amount payable specified in the tax return and shall not be less than the average of fine amounts in the range prescribed in clause 4 of this Article.
6. Remedies:
a) Compelling the full payment of deferred tax amounts into the state budget with respect to the commission of the acts prescribed in clause 1, 2, 3, 4 and 5 of this Article if the taxpayer delays filing their tax return, leading to the late payment of taxes;
b) Compelling the submission of tax returns, enclosing annexes, in case of committing the acts specified in point c and d of clause 4 of this Article.
Clause 4, Article 7 of Decree No. 125/2020/ND-CP stipulates the principles of determination of fine amounts, specifically as follows:
- The fine amounts specified in Article 10, 11, 12, 13, 14 and 15; clause 1 and 2 of Article 19; and Chapter III herein, shall be those applied to violating entities.
Taxpayers that are family households or sole proprietorship households shall be fined the same as violating persons.
Thus, when enterprises are late to pay value added tax, depending on the delay time, there will be penalties such as warning or fine up to VND 25,000,000.
How much is the penalty for deferred submission of value added tax returns in Vietnam? How late can I declare tax before being fined for tax evasion in Vietnam?
If I submit tax returns before the time of the tax authority’s issuance of the report on sanctioning tax evasion, will I still be fined?
According to the provisions of Clause 5, Article 13 of Decree No. 125/2020/ND-CP on this content as follows:
- Fines ranging from VND 15,000,000 to VND 25,000,000 shall be imposed for the act of filing tax returns more than 90 days after the prescribed deadline if such act results in additional taxes to be paid, and the taxpayer has fully paid taxes, deferred amounts into the state budget before the time of the tax authority’s announcement of the decision on tax inspection and examination, or before the time of the tax authority’s issuance of the report on the deferred submission of tax returns under the provisions of clause 11 of Article 143 in the Law on Tax Administration.
In case where the fine amount prescribed in this clause is greater than the tax amount additionally incurred in the tax return, the maximum amount of fine for this act shall be equal to the tax amount payable specified in the tax return and shall not be less than the average of fine amounts in the range prescribed in clause 4 of this Article.
Thus, the act of filing tax returns more than 90 days after the prescribed deadline if such act results in additional taxes to be paid, and the taxpayer has fully paid taxes, deferred amounts into the state budget before the time of the tax authority’s announcement of the decision on tax inspection and examination, or before the time of the tax authority’s issuance of the report on the deferred submission of tax returns shall be face a fine of between VND 15,000,000 and VND 25,000,000.
How late can I declare tax before being fined for tax evasion in Vietnam?
According to the provisions at Point a, Clause 1, Article 17 of Decree No. 125/2020/ND-CP:
Penalties for the act of tax evasion
1. The fine which equals the amount of evaded tax shall be imposed on the taxpayer committing any of the following violations under at least a mitigating circumstance:
a) Failing to submit tax registration applications; failing to file tax returns or filing tax returns 90 days after the deadline or the extended deadline for submission of tax returns, except the cases prescribed in point b and c of clause 4 and 5 of Article 13 herein;
b) Failing to keep accounting entries of amounts collected from the determination of taxes payable, any deficiency in taxes amounts due to non-declaration or false declaration or any increase in amounts of tax refund, exemption or reduction, except the acts prescribed in Article 16 herein;
c) Failing to issue invoices for sale of goods or provision of services, except the cases where the taxpayer has recorded taxes on sold goods or supplied services in the corresponding tax term; issuing invoices for sale of goods or provision of services in which the invoiced items and amounts based on which tax declaration is made are less than those that actually exist if this act is discovered after the deadline for submission of tax returns;
d) Using illegal invoices; illegally using invoices for declaring taxes with the intention of reducing taxes payable or increasing amounts of tax refund, exemption or reduction;
dd) Using illegal evidencing documents; illegally using evidencing documents; using evidencing documents or records that do not correctly reflect the nature of transactions or actual values of these transactions for the purpose of falsely determining taxes payable, amounts of tax exemption, reduction or refund; preparing documents or records on destruction of supplies or goods which are not real, resulting in any reduction in taxes payable or any increase in amounts of tax refund, exemption or reduction;
e) Using goods not subject to taxes, or those qualified for tax exemption or consideration of tax exemption, to frustrate the prescribed purposes without informing tax authorities about the conversion of these purposes or registering tax declarations with tax authorities;
g) The violating taxpayer performs business activities during the period of business closure or temporary suspension without informing tax authorities, except the cases prescribed in point b of clause 4 of Article 10 herein.
Thus, in case the taxpayer fails to submit tax registration applications; fails to file tax returns or files tax returns 90 days after the deadline or the extended deadline for submission of tax returns, he/she will be fined for the act of tax evasion.
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