Vietnam: How will the illegal trading in value added tax invoices be penalized according to current regulations? What acts does illegal trading of value added tax invoices include?
What is value added tax invoice in Vietnam?
Value added tax invoice defined in Clause 1, Article 8 of Decree No. 123/2020/ND-CP is an invoice which may be used by organizations making VAT declaration by employing the credit-invoice method for the following activities:
- Domestic sale of goods or provision of services;
- Provision of international transport services;
- Export of goods to free trade zones and other cases considered as export of goods;
- Export of goods or provision of services in a foreign market.
Vietnam: How will the illegal trading in value added tax invoices be penalized according to current regulations? What acts does illegal trading of value added tax invoices include?
What acts does illegal trading of red invoices (value added tax invoices) include?
Pursuant to Point c, Clause 3, Article 2 of Joint Circular No. 10/2013/TTLT-BTP-BCA-TANDTC-VKSNDTC-BTC stipulating:
Illegal printing, distribution and trading of invoices and receipts of state budget remittances (Article 164a of the Criminal Code)
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3. Acts specified in Article 164a of the Criminal Code are construed as follows:
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c) Illegally trading invoices, receipts of state budget remittances includes the following acts:
c1.) Trading the invoices without content or with insufficient or incorrect content as prescribed;
c.2) Trading the invoices which are filled content, but there is no goods or service enclosed;
c.3) Trading counterfeit invoices, invoices not yet had use value, invoices expired use value, invoices of other business and service establishments to legalize the bought goods and services or to issue for clients upon selling goods, services;
c.4) Trading, using invoices with difference of value of goods, services between invoice originals.
Thus, illegally trading invoices, receipts of state budget remittances includes the following acts:
- Trading the invoices without content or with insufficient or incorrect content as prescribed;
- Trading the invoices which are filled content, but there is no goods or service enclosed;
- Trading counterfeit invoices, invoices not yet had use value, invoices expired use value, invoices of other business and service establishments to legalize the bought goods and services or to issue for clients upon selling goods, services;
- Trading, using invoices with difference of value of goods, services between invoice originals.
How will the illegal trading in red invoices (value added tax invoices) be penalized?
The act of trading red invoices constitutes the crime of illegally trading in invoices specified in Article 203 of the 2015 Criminal Code of Vietnam (amended by point k, Clause 2, Article 2 of the 2017 Law on Amendments to the Criminal Code), red invoice trading must be in one of the following cases:
- The quantity of blank invoices from 50 numbers to less than 100 numbers;
- The quantity of filled invoices and receipts from 10 numbers to less than 30 numbers;
- The illegal profit earned from VND 30 million to under VND 100 million.
Specifically, according to Article 203 of the 2015 Criminal Code of Vietnam (amended by point k, Clause 2, Article 2 of the 2017 Law on Amendments to the Criminal Code), there is a provision on criminal prosecution of individuals and organizations that commit crimes of illegally trading invoices are as follows:
* For individuals:
- Any person who prints, issues, deals in illegal blank invoices and receipts for payment of state revenues with a quantity of 50 - 100 or illegal filled invoices and receipts with a quantity of 10 - 30 or the illegal profit earned is from VND 30,000,000 to under VND 100,000,000 shall be liable to a fine of from VND 50,000,000 to VND 200,000,000, face a penalty of up to 03 years' community sentence or 06 - 36 months' imprisonment.
- A fine of between VND 200,000,000 and 500,000,000 or a penalty of 1 and 5 years' imprisonment if the crime is committed in one of the following cases:
+ The offence is committed by an organized group;
+ The offence is committed in a professional manner;
+ The offence involves the abuse of the offender's position or power;
+ The quantity of blank invoices and receipts is ≥ 100; the quantity of filled invoices and receipts is ≥ 30;
+ The illegal profit earned is ≥ VND 100,000,000;
+ The loss incurred by state budget is ≥ VND 100,000,000;
+ Dangerous recidivism.
The offender might also be liable to a fine of from VND 10,000,000 to VND 50,000,000, be prohibited from holding certain positions or doing certain works for 01 - 05 years.
* For commercial legal entities
- A fine ranging from VND 100,000,000 to VND 500,000,000 shall be imposed on commercial legal entities illegally trading invoices in billet form from 50 numbers to less than 100 numbers or invoices and vouchers with contents from 10 numbers to less than 30 numbers or gain illicit profits from VND 30,000,000 to under VND 100,000,000.
- A fine ranging from VND 500,000,000 to VND 1,000,000,000 shall be imposed if committing the crime in one of the following cases:
+ The offence is committed by an organized group;
+ The offence is committed in a professional manner;
+ The offence involves the abuse of the offender's position or power;
+ The quantity of blank invoices and receipts is ≥ 100; the quantity of filled invoices and receipts is ≥ 30;
+ The illegal profit earned is ≥ VND 100,000,000;
+ The loss incurred by state budget is ≥ VND 100,000,000;
+ Dangerous recidivism.
- Permanently suspend operations if committing crimes in the cases specified in Article 79 of the 2015 Criminal Code of Vietnam (amended in 2017).
Commercial legal entities 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 from 01 to 03 years or ban from raising capital from 01 to 03 years.
Thus, individuals and commercial legal entities are not allowed to buy and sell red invoices in any form. Violations will be handled in accordance with current law.
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