What are the penalties for the act of making a false declaration that causes any deficiency in taxes payable or any increase in amounts of tax exemption, reduction or refund in Vietnam?
- What are the responsibilities of taxpayers in tax-related activities in Vietnam?
- What are the penalties for the act of making a false declaration that causes any deficiency in taxes payable or any increase in amounts of tax exemption, reduction or refund in Vietnam?
- What are the time limits for imposition of tax-related administrative penalties for the act of making a false declaration that causes any deficiency in taxes payable in Vietnam?
What are the responsibilities of taxpayers in tax-related activities in Vietnam?
Pursuant to Article 17 of the Law on Tax Administration 2019, the responsibilities of taxpayers are as follows:
"Article 17. Responsibilities of taxpayers
1. Apply for taxpayer registration and use TINs as prescribed by law.
2. Declare tax accurately, honestly and adequately and submit tax dossiers on time; take legal responsibility for the accuracy, honesty and adequacy of tax dossiers.
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13. Taxpayers who have entered into related-party transactions have the responsibility to create, retain, declare and provide documents on taxpayers and their related parties, including information on related parties residing in foreign countries or territories according to the Government's regulations.”
Accordingly, the accurate, truthful and complete tax declaration is the responsibility of the taxpayer. Taxpayers will be responsible before the law for the information they have declared.
What are the penalties for the act of making a false declaration that causes any deficiency in taxes payable or any increase in amounts of tax exemption, reduction or refund in Vietnam?
What are the penalties for the act of making a false declaration that causes any deficiency in taxes payable or any increase in amounts of tax exemption, reduction or refund in Vietnam?
Pursuant to Article 16 of Decree 125/2020/ND-CP stipulates as follows:
“Article 16. Penalties for act of making false declaration that causes any deficiency in taxes payable or any increase in amounts of tax exemption, reduction or refund
1. A fine which equals 20% of the underpaid tax amount or the higher-than-prescribed amount of tax exemption, reduction or refund shall be imposed for any of the following violations:
a) Making false declaration of tax bases or deductible tax amounts or incorrectly determining cases of tax exemption, reduction or refund, resulting in any deficiency in tax amounts payable or any increase in amounts of tax exemption, reduction or refund though economic activities have already been fully recorded in legitimate accounting books, invoices and evidencing documents;
b) Making false declaration causing any reduction in payable tax amounts or any increase in amounts of tax exemption, reduction or refund, which does not fall into the case specified at point a of this clause though the violating taxpayer has voluntarily made a supplementary declaration and fully paid unpaid back taxes or tax arrears to the state budget prior to the deadline for the tax authority’s tax inspection and examination at taxpayers' offices or premises;
c) Making false declarations leading to any reduction in payable tax amounts or any increase in amounts of tax exemption, reduction or refund which have been determined by competent agencies’ tax inspection and examination or administrative violation records as an act of tax evasion if the violating taxpayer commits the first administrative violation regarding tax evasion, has made additional declarations and fully paid tax amounts owed to the state budget before the time of the competent agency’s issuance of the sanctioning decision, and the tax authority has made a written record stating that this act is an act of false declaration leading to any deficiency or underpayment of taxes payable;
d) Making false declarations leading to any deficiency or underpayment of taxes payable or any increase in amounts of tax exemption reduction or refund in case of related-party transactions though the taxpayer has made market price determination dossiers, or has made and sent annexes to tax authorities as per regulations on tax administration applicable to enterprises with related-party transactions;
dd) Using illegal invoices or evidencing documents for keeping accounting records of values of purchased goods or services to reduce taxes payable or increase amounts of tax refund, reduction or refund but, after the tax authority’s discovering this act through their tax inspection and examination, the buyer succeeds in proving that this act is performed through the seller’s fault and fully keeping accounts of these values in accordance with regulations.
2. Remedies:
a) Compelling the full payment of underpaid or deficient taxes or higher-than-prescribed amounts of tax refund, exemption or reduction, or deferred taxes, into the state budget with respect to the acts prescribed in clause 1 of this Article.
If the sanctioning time limit expires, the taxpayer that is not sanctioned under the provisions of clause 1 of this Article must fully pay underpaid or deficient taxes or higher-than-prescribed amounts of tax refund, exemption or reduction, or deferred taxes, into the state budget within the time limits prescribed in clause 6 of Article 8 herein;
b) Compelling the re-adjustment of losses, the carried-forward amounts of input VAT deductions (if any) in case of commission of the acts prescribed in clause 1 of this Article.
3. In case where the taxpayer makes false declarations as provided in point a, b and d of clause 1 of this Article which do not lead to any deficiency or underpayment of taxes payable or any increase in amounts of tax exemption, reduction or refund, they shall not be sanctioned according to this Article, but shall be sanctioned according to clause 3 of Article 12 herein.”
Accordingly, the administrative sanction for the act of making false declarations leading to underpayment of the payable tax amount will be calculated at the rate of 20% of the underpaid amount. In addition, taxpayers are also required to remedial measures.
Note: the above administrative sanction only applies to individuals. In case of violations by organizations, the administrative sanction will be 2 times that of individuals.
What are the time limits for imposition of tax-related administrative penalties for the act of making a false declaration that causes any deficiency in taxes payable in Vietnam?
Pursuant to Point a, Clause 2, Article 8 of Decree 125/2020/ND-CP stipulates as follows:
“Article 8. Time limits for imposition of tax and invoice-related administrative violations; duration for considering none of penalties is imposed; reversal period of back taxes
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2. Time limits for imposition of tax-related administrative penalties
a) Time limit for imposition of penalties for administrative violations against regulations on tax-related procedures shall be 02 years from the date of commission of these violations.
The date of commission of an administrative violation against regulations on tax procedures shall be the date succeeding the statutory deadline for completion of regulatory tax-related procedures under laws on tax administration, except the following cases:
As for acts prescribed in clause 1, point a and b of clause 2, clause 3 and point a of clause 4 of Article 10; clause 1, 2, 3, 4 and point a of clause 5 of Article 11; clause 1, 2, 3 and point a, b of clause 4, clause 5 of Article 13 herein, the date of commission of any of these acts which is accepted as the start date of that time limit shall be the date on which taxpayers apply for tax registrations or notify tax authorities or file tax returns.
As for acts prescribed in point c of clause 2, point b of clause 4 of Article 10; point b of clause 5 of Article 11; point c and d of clause 4 of Article 13 herein, the date of commission of these acts which is accepted as the start date of that time limit shall be the date on which competent law enforcement officers detect these acts.”
Accordingly, the time limits for imposition of tax-related administrative penalties for the act of making a false declaration that causes any deficiency in taxes payable in Vietnam is within 2 years from the date of acts.
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