Is the act of incorrect declaration of the actual quantity of products for the purpose of tax evasion subject to criminal prosecution in Vietnam?
What is the customs document?
According to the provisions of Clause 1, Article 24 of the 2014 Law on Customs in Vietnam, a customs document includes:
Customs document
1. A customs document comprises:
a/ A customs declaration or documentary evidence in substitution;
b/ Relevant documentary evidence.
As the cases maybe, a customs declarant shall submit sale contract, commercial invoice, bill of lading, certificate of origin of goods, import or export permit, notice of specialized inspection results or exemption from specialized inspection, and documentary evidence related to goods as prescribed by corresponding regulations of law.
Thus, documentary evidence in customs document are paper or electronic documentary evidence. Electronic documentary evidence must ensure the integrity and format in accordance with the law on electronic transactions.
Is the act of incorrect declaration of the actual quantity of products for the purpose of tax evasion subject to criminal prosecution in Vietnam?
How will the act of providing incorrect information about the actual quantity of products be administratively sanctioned?
According to the provisions of Article 8 of Decree No. 128/2020/ND-CP, when there is an act of providing incorrect information about the quantity of products, the administrative violation will be imposed as follows:
Offences against regulations on customs declaration
1. A fine ranging from 1,000,000 to 2,000,000 shall be imposed for any of the following offences:
a) Providing incorrect information about the quantity (the exhibit is worth more than VND 10,000,000), names, categories and origins of goods being humanitarian aid or grant aid approved by competent authorities;
b) Providing incorrect information about the quantity (the exhibit is worth more than VND 10,000,000), names, categories, quality, customs values, origins and codes of taxable imports without affecting the tax payable; except for the cases specified in Point a Clause 1, and Clause 2 of this Article;
c) Failure to specify the special relationship between the buyer and the seller in the customs declaration in accordance with regulations of law on customs without affecting the customs values.
2. A fine ranging from VND 2,000,000 to VND 4,000,000 shall be imposed for failure to declare or to provide correct information about the names, categories, quality, customs values and origins of goods that are:
a) Goods in transit, transshipped or involved in the merchanting trade transactions;
b) Goods used or destroyed within a free trade zone.
3. A fine ranging from VND 3,000,000 to VND 5,000,000 shall be imposed for providing incorrect information about the quantity (the exhibit is worth more than VND 10,000,000), names, categories, quality, customs values and origins of exports or imports that are exempt from tax or tax-free as prescribed by law; except for the cases specified in Point a Clause 1 and Point d Clause 4 of this Article.
4. A fine ranging from VND 5,000,000 to VND 10,000,000 shall be imposed for any of the following offences:
a) Incorrectly specifying the number of master and house bills of lading in the goods manifest included in the dossier on the vehicle entering and leaving Vietnam or the vehicle in transit;
b) Incorrectly specifying the number of passengers in the passenger list included in the dossier on the vehicle entering and leaving Vietnam or the vehicle in transit;
c) Incorrectly specifying the number of pieces of baggage in the baggage declaration included in the dossier on the vehicle entering and leaving Vietnam or the vehicle in transit;
d) Providing incorrect information about the quantity (the exhibit is worth more than VND 10,000,000), names, categories and origins of goods sent to a bonded warehouse or tax-suspension warehouse; goods sent abroad from a bonded warehouse or tax-suspension warehouse.
Thus, providing incorrect information about the quantity of products may result in an administrative fine of up to VND 10,000,000.
Is the act of incorrect declaration of the actual quantity of products for the purpose of tax evasion subject to criminal prosecution in Vietnam?
For acts of incorrectly declaring the actual quantity of products for the purpose of tax evasion, the administrative penalty will be imposed according to the provisions of Article 14 of Decree No. 128/2020/ND-CP as follows:
Penalties for tax evasion
1. Acts of tax evasion include:
…
dd) Overstatement of the quantity or categories of processed products; domestic exports; exports of an export processing enterprise; re-exported goods;
h) Incorrectly declaring quantity, names, categories, quality, value or origins of goods imported from a free trade zone into the domestic market;
…
2. The taxpayer that commits any of the offences specified in Clause 1 of this Article which is not liable to criminal prosecution shall also incur a fine as follows:
a) A fine equal to the amount of evaded tax if no aggravating circumstances are found;
b) Every aggravating circumstance that is found will cause the fine to increase by 20% but not exceeding 03 times the evaded tax.
Pursuant to the provisions of Article 200 of the 2015 Criminal Code of Vietnam (amended by point a, Clause 47, Article 1 of the 2017 Law on amendments to the Criminal Code of Vietnam), penal liability for tax evasion is as follows:
Tax evasion
1. Any person who commits any of the following acts of tax evasion with an amount of evaded tax from VND 100,000,000 to under VND 300,000,000 or under VND 100,000,000 while having incurred an administrative penalty for tax evasion or having an unspent conviction for any of the offences specified in Article 188, 189, 190, 191, 192, 193, 194, 195, 196, 202, 250, 251, 253, 254, 304, 305, 306, 309 and 311 hereof shall be liable to a fine of from VND 100,000,000 to VND 500,000,000 or face a penalty of 03 - 12 months' imprisonment:
…
e) Making incorrect declaration of exported or imported goods without making an additional declaration after customs clearance are granted, except in the circumstances specified in Article 188 and Article 189 hereof;
2. This offence committed in any of the following circumstances carries a fine of from VND 500,000,000 to VND 1,500,000,000 or a penalty of 01 - 03 years' imprisonment:
a) The offence is committed by an organized group;
b) The amount of tax evaded is from VND 300,000,000 to under VND 1,000,000,000;
c) The offence involves the abuse of the offender's position or power;
d) The offence has been committed more than once;
dd) Dangerous recidivism.
3. If the evaded tax is ≥ VND 1,000,000,000, the offender shall be liable to a fine of from VND 1,500,000,000 to VND 4,500,000,000 or face a penalty of 02 - 07 years' imprisonment.
4. The offender might also be liable to a fine of from VND 20,000,000 to VND 100,000,000 , be prohibited from holding certain positions or doing certain works for 01 - 05 years or have all or part of his/her property confiscated.
5. Punishments incurred by a corporate legal entity that commits any of the offences specified in this Article:
a) Any corporate legal entity that commits any of the acts of tax evasion specified in Clause 1 of this Article with an amount of from VND 200,000,000 to under VND 300,000,000 or from VND 100,000,000 to under VND 200,000,000 while having incurred an administrative penalty for tax evasion or having an unspent conviction for any of the offences specified in Article 188, 189, 190, 191, 192, 193, 194, 195 and 196 hereof shall be liable to a fine of from VND 300,000,000 to VND 1,000,000,000;
b) A corporate legal entity that commits this offence in any of the circumstances specified in Points a, b, d and dd Clause 2 of this Article shall be liable to fine of from VND 1,000,000,000 to VND 3,000,000,000;
c) A corporate legal entity that commits this offence in any of the circumstances specified in Clause 3 of this Article shall be liable to a fine of from VND 3,000,000,000 to VND 10,000,000,000 or has its operation suspended for 06 - 36 months;
d) A corporate legal entity that commits this offence in the circumstance specified in Article 79 hereof shall be permanently shut down;
dd) The violating corporate legal entity might also be liable to a fine of from VND 50,000,000 to VND 200,000,000, be banned from operating in certain fields or raising capital for 01 - 03 years.
Thus, individuals and organizations that commit acts of making incorrect declarations of actual quantities of products and goods for the purpose of tax evasion may be prosecuted for penal liability up to 07 years in prison, corresponding to the seriousness of the crime.
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