Notable prohibited acts regarding tax and invoices to avoid being sanctioned in Vietnam

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1. Notable prohibited acts regarding tax and invoices to avoid being sanctioned

According to Notice 7592/TB-CTTPHCM dated April 25, 2023, of the Tax Department of Ho Chi Minh City on the warning of violations when using invoices according to the provisions of Decree 123/2020/ND-CP and Circular 78/2021/TT-BTC, to avoid tax and invoice penalties, businesses should note the following prohibited acts:

In the tax field, businesses need to avoid the following acts:

- Collusion, connection, cover-up between taxpayers and tax administration officials, tax administration agencies transferring prices, tax evasion.

- Deliberately failing to declare or declaring incompletely, timely, and accurately tax amounts to be paid.

- Using other taxpayers' tax identification numbers to commit illegal acts or allowing others to use their tax identification numbers in contravention of the law.

- Selling goods or providing services without issuing invoices as prescribed by law, using illegal invoices, and using illegal invoices.

- Falsifying, misusing, allowing unauthorized access, and destroying the taxpayer information system.

In the field of invoices and vouchers, enterprises should avoid the following acts:

- Obstruction causing damage to the health and dignity of tax officials while inspecting and checking invoices and documents

- Illegally accessing, falsifying, or destroying the information system of invoices and documents

- Giving bribes or performing other acts related to invoices and documents in order to gain illicit benefits.

- Acts of using illegal invoices, including:

+ Using fake invoices and vouchers

+ Using invoices and vouchers that have not been used or have expired

+ Using invoices that are discontinued during the period of being coerced by the measure of stopping using invoices (except for cases where the use of invoices is allowed under the notice of tax authorities).

+ Using e-invoices without registration with tax authorities

+ Using e-invoices without the tax authority's code (in the case of using an e-invoice with the tax authority's code)

+ Using invoices for the purchase of goods and services with a date on the invoice from the date the tax authority determines that the seller is not operating at the business address registered with the competent state agency.

+ Using invoices and vouchers for purchase of goods or services with a date made on the invoice or voucher prior to the date of identification of the invoicer, vouchers do not operate at the business address registered with the competent state agency or have not yet been notified by the tax authority that the invoice maker, vouchers do not operate at the business address registered with the competent authority, but the tax agency, the police agency, or other competent authorities have concluded that the invoice or voucher is not legal.

- Acts of illegal use of invoices, including:

+ Using invoices and vouchers that do not contain all mandatory contents as prescribed; invoices for erasure or repair not in accordance with regulations;

+ Using fake invoices and vouchers (invoices and vouchers with economic operation criteria and contents recorded but the purchase and sale of goods and services are partly or completely unreal); invoices that do not reflect the actual value incurred or make false invoices or make fake invoices;

+ Using invoices with differences in value of goods or services or deviations from mandatory criteria between copies of invoices;

+ Using invoices for rotation when transporting goods in circulation or using invoices of these goods and services to prove other goods and services;

+ Using invoices and vouchers of other organizations and individuals (except for invoices of tax authorities and cases authorized to make invoices) to legalize purchased goods or services or sold goods and services;

+ Using invoices or vouchers that tax authorities, police, or other functional agencies have concluded is illegal use of invoices and vouchers.

For making invoices when selling goods and services, enterprises should avoid the following acts:

+ Invoices are not made at the prescribed time.

+ Making invoices not in order from small number to large number as prescribed.

+ Not issuing invoices for goods and services used for promotion, advertising, or samples; goods and services used for giving, giving, giving, exchanging, or paying wages for employees (except for goods circulated internally, consumed internally to continue the production process).

+ Making the wrong type of invoice according to regulations delivered to the buyer or declaring tax.

+ Making e-invoices without the approval notice of the tax authority or before the date the tax authority accepts the use of e-invoices with or without the tax authority's code.

+ Making invoices for the sale of goods and services during the temporary suspension of business operations, except for the case of issuing invoices to customers for the performance of contracts signed before the date of notice of business suspension.

+ Making electronic invoices from cash registers without a connection means transferring data electronically to tax authorities.

For the act of transferring data from electronic invoices, enterprises need to avoid the following acts:

+ Sending e-invoice data to tax authorities past the prescribed time limit.

+ Transfering the summary table of electronic invoice data with an incomplete number of invoices made in the period.r

+ Failing to transfer e-invoice data to tax authorities within the prescribed time limit.

2. Penalties for tax-related and invoice-related administrative violations in Vietnam

Pursuant to the provisions of Article 7 of Decree 125/2020/ND-CP, fines not greater than VND 100,000,000 shall be imposed on entities committing invoice-related violations. Fines not greater than VND 200,000,000 shall be imposed on taxpayers that are entities committing tax-related violations.

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 violation arising from the act of false declaration leading to the underpayment of tax amount or the increase in the amount of tax exemption, reduction or refund.

A fine which is 1 or 3 times as much as the evaded tax amount shall be imposed for any tax evasion act.

A fine corresponding to the amount which has not yet paid into the state budget account shall be imposed for any act of violation stipulated in Clause 1, Article 18 of Decree 125/2020/ND-CP.

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