Doing business activities during the temporary suspension of business without notifying the tax authority is considered tax evasion in Vietnam?

Main Content

• Is it fine to conduct business activities during the temporary suspension of business but do not notify the tax authority and generate revenue?
• What circumstances are considered aggravating and mitigating circumstances in handling tax and invoice administrative violations?
• Tax evasion in Vietnam can be jailed from 3 months to 1 year?

Is it fine to conduct business activities during the temporary suspension of business but do not notify the tax authority and generate revenue?

Pursuant to Article 17 of Decree 125/2020/ND-CP stipulates as follows:

“Article 17. Sanctions for tax evasion

1. A fine of 1 times the evaded tax amount for taxpayers with one or more extenuating circumstances when committing one of the following violations:

a) Failing to submit tax registration dossiers; failing to submit a tax return or submit a tax return after 90 days from the date of expiration of the time limit for submitting the tax return or from the date of expiration of the extension of time limit for submitting tax returns, except for the case specified at point b. , c Clauses 4 and 5, Article 13 of this Decree;

b) Failing to record in the accounting books the revenues related to the determination of the payable tax amount, failing to declare or declare incorrectly, leading to a lack of payable tax amount or an increase in the tax refunded, exempted or reduced. , except for the acts specified in Article 16 of this Decree;

c) Failing to issue invoices when selling goods or services, unless the taxpayer has declared tax on the value of sold and supplied goods and services in the corresponding tax period; issue invoices for sale of goods or services that are incorrect in terms of quantity and value of goods and services for tax declaration, which are lower than the actual amount and are discovered after the deadline for submitting tax declaration dossiers;

d) Illegal use of invoices; Illegally using invoices for tax declaration reduces the payable tax amount or increases the tax refunded, exempted or reduced tax amounts;

d) Illegal use of vouchers; illegal use of vouchers; using vouchers and documents that do not reflect the true nature of the transaction or the actual transaction value to incorrectly determine the payable tax amount, the exempted or reduced tax amount, or the refunded tax amount; make procedures and dossiers for destruction of supplies and goods which are not true, which reduces the payable tax amount or increases the tax refunded, exempted or reduced;

e) Using goods that are not subject to tax, tax exemption, or consideration for tax exemption for improper purposes without declaring the change of use purpose or declaring tax to the tax authority;

g) Taxpayers have business activities during the period of application for suspension or suspension of business activities but fail to notify the tax authorities, except for the case specified at Point b, Clause 4, Article 10 of this Decree.

2. A fine of 1.5 times the evaded tax amount shall be imposed on the taxpayer who commits one of the acts specified in Clause 1 of this Article without aggravating or mitigating circumstances.

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6. Remedial measures:

a) Forcible payment of the full amount of tax evaded into the state budget, for violations specified in Clauses 1, 2, 3, 4, 5 of this Article.

If the act of tax evasion prescribed in Clauses 1, 2, 3, 4, 5 of this Article has passed the statute of limitations for sanctioning, the taxpayer will not be sanctioned for tax evasion but the taxpayer must pay the full amount. evaded tax and late payment interest shall be calculated on the amount of tax evaded into the state budget within the time limit specified in Clause 6, Article 8 of this Decree.

b) Forcible adjustment of losses, deductible input value-added tax amounts on tax records (if any) for the acts specified in Clauses 1, 2, 3, 4, 5 of this Article.

7. Violations specified at Points b, dd, and e, Clause 1 of this Article are discovered after the deadline for submitting tax declaration dossiers, but do not reduce the payable tax amount or have not been refunded or increase the tax amount. Taxes that are exempt or reduced will be administratively sanctioned according to the provisions of Clause 3, Article 12 of this Decree.”

Accordingly, the act of conducting business activities during the temporary suspension of business without notifying the tax authority and generating revenue will be considered an act of tax evasion and based on aggravating and mitigating circumstances. of the taxpayer to determine the administrative penalty for this act of tax evasion.

In addition, taxpayers are also required to take remedial measures according to the above provisions.

Doing business activities during the temporary suspension of business without notifying the tax authority is considered tax evasion in Vietnam?

What circumstances are considered aggravating and mitigating circumstances in handling tax and invoice administrative violations?

Pursuant to Article 6 of Decree 125/2020/ND-CP stipulates as follows:

“Article 6. Extenuating circumstances and aggravating circumstances in the field of taxes and invoices

1. Aggravating circumstances, extenuating circumstances in accordance with the law on handling of administrative violations.

2. Administrative violations with tax amount (under tax amount, evaded tax amount or higher amount of tax exemption, reduction or refund) of VND 100,000,000 or more or the value of goods and services from 500,000 .000 VND or more is determined to be a large-scale tax administrative violation under the provisions of Point l, Clause 1, Article 10 of the Law on Handling of Administrative Violations. An administrative violation with 10 or more invoice numbers shall be determined as an administrative violation on large-scale invoices as prescribed at Point l, Clause 1, Article 10 of the Law on Handling of Administrative Violations.”

Thus, aggravating circumstances and extenuating circumstances in the handling of administrative violations of tax and invoices will be determined according to the above provisions.

Tax evasion in Vietnam can be jailed from 3 months to 1 year?

In addition to the provisions on administrative sanctions for tax evasion mentioned above, Vietnamese law also provides for criminal prosecution for tax evasion. Specifically, this provision is implemented according to Article 200 of the Penal Code 2015 and points a and b, clause 47, Article 1 of the Law amending the Penal Code 2017) as follows:

“Article 200. Tax evasion

1. Those who commit one of the following acts of tax evasion with an amount of between VND 100,000,000 and under VND 300,000,000 or under VND 100,000,000 but have been administratively sanctioned for tax evasion or has been convicted of this crime or of one of the offenses specified in articles 188, 189, 190, 191, 192, 193, 194, 195, 196, 202, 250, 251, 253, 254, 304, 305, 306, 309 and 311 of this Code, who have not yet had their criminal records cleared but continue to commit them, shall be subject to a fine of between VND 100,000,000 and 500,000,000 or a prison term of between 3 months and 1 year:

a) Failing to submit tax registration dossiers; failure to file tax returns; submit a tax return 90 days after the deadline for filing a tax return or the expiration of the time limit for filing a tax return as prescribed by law;

b) Failing to record in the accounting books the revenues related to the determination of payable tax amounts;

c) Failing to issue invoices when selling goods or services or recording the value on the sale invoice lower than the actual payment value of the sold goods or services;

d) Using illegal invoices and vouchers to account for goods and input materials in activities generating tax obligations reduces the payable tax amount or increases the exempted or exempted tax amounts. decrease or increase the amount of tax withheld, tax refund;

dd) Using other illegal vouchers and documents to wrongly determine the payable tax amount or refunded tax amount;

e) Making false declarations of imported or exported goods without making additional declarations after the goods have been cleared from customs, if they do not fall into the cases specified in Articles 188 and 189 of this Code;

g) Intentionally failing to declare or falsely declare tax on exported or imported goods, if they do not fall into the cases specified in Articles 188 and 189 of this Code;

h) Collaborating with the consignor to import goods, if not falling into the cases specified in Articles 188 and 189 of this Code;

i) Using goods that are not subject to tax, tax exemption or consideration for tax exemption for improper purposes without declaring the change of use purpose to the tax administration agency.

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5. A commercial legal entity that commits an offense specified in this Article shall be fined as follows:

a) Committing one of the acts specified in Clause 1 of this Article to evade tax with an amount from VND 200,000,000 to under VND 300,000,000 or from VND 100,000,000 to under VND 200,000,000 but have been fined for the following violations: administrative violations of tax evasion or have been convicted for this crime or for one of the offenses specified in articles 188, 189, 190, 191, 192, 193, 194, 195 and 196 of this Code, not yet if they have their criminal records remitted but continue to commit their violations, they shall be subject to a fine of between VND 300,000,000 and 1,000,000,000;

b) Committing the crime in one of the circumstances specified at Points a, b, d and dd, Clause 2 of this Article, the offenders shall be subject to a fine of between VND 1,000,000,000 and VND 3,000,000,000;

c) Committing the crime in the cases specified in Clause 3 of this Article, the offenders shall be subject to a fine of between VND 3,000,000,000 and VND 10,000,000,000 or have their operation suspended for a term of between 06 months and 03 years;

d) Committing the crime in the cases specified in Article 79 of this Code, the operation shall be permanently suspended;

dd) The commercial legal entity may also be subject to a fine of from VND 50,000,000 to VND 200,000,000, a ban from doing business, from operating in certain fields or from raising capital for one to three years.”

Thus, the act of tax evasion can be prosecuted for penal liability according to the above provisions.