What are the fines for incorrect declaration leading to insufficient tax payments in Vietnam? What are judgments related to this violation?

1. What are the fines for incorrect declaration leading to insufficient tax payments in Vietnam?

The penalty for the act of incorrect tax declaration leading to insufficient tax payments or an increase in tax exempted, reduced, or refunded is guided by Article 16 of Decree 125/2020/ND-CP as follows:

- Penalty of 20% of the underdeclared tax amount or the excessive tax amount exempted, reduced, or refunded applies to one of the following acts:

+ Incorrect declaration of the tax calculation base or deductible tax amount or incorrect determination of the case entitled to tax exemption, reduction, refund leading to a shortage of tax payable or an increase in tax exempted, reduced, refunded, but all economic transactions have been fully reflected in the accounting system, invoices, and legal documents;

+ Incorrect declaration leading to a decrease in tax payable or an increase in tax refund, exempted, reduced amount not falling under the aforementioned case, but the taxpayer voluntarily filed a supplementary declaration and paid the full amount of tax shortage into the state budget before the tax authority concludes the tax inspection or audit at the taxpayer’s office;

+ Incorrect declaration leading to a decrease in tax payable or an increase in tax refund, reduced, exempted tax audited, inspected by the competent authority, administrative violation records identified as tax evasion but the taxpayer violates the administrative for the first time regarding the act of tax evasion, has filed supplementary declaration and paid the full amount of tax into the state budget before the competent authority issues a penalty decision, and the tax authority has recorded the act as incorrect declaration leading to tax shortage;

+ Incorrect declaration leading to a shortage of tax payable or increase in tax exempted, reduced, refunded related to affiliated transactions but the taxpayer has prepared market price determination dossiers or prepared and submitted to the tax authority appendices per regulations on tax management for enterprises with affiliated transactions;

+ Use of illegal invoices, documents to account for the value of goods, services purchased leading to a decrease in tax payable or increase in tax refund, exempted, reduced amount but when tax inspection reveals, the buyer proves that the illegal use of invoices, documents was the seller’s fault and the buyer has fully accounted as per regulations.

- Remedial measures:

- To force the full payment of the shortage tax amount, over-claimed refund, exemption or reduction, and late payment interest into the state budget for the acts prescribed in Clause 1, Article 16 of Decree 125/2020/ND-CP.

In cases where the statute of limitations for penalties has expired, the taxpayer will not be penalized as prescribed in Clause 1 of this Article, but must pay the full amount of tax shortage, excess refund, exemption or reduction, and late payment interest into the state budget by the deadline prescribed in Clause 6, Article 8 of Decree 125/2020/ND-CP;

- To enforce the adjustment of the losses, and the deductible input value-added tax amount transferred to the next period (if any) for the acts prescribed in Clause 1, Article 16 of Decree 125/2020/ND-CP.

- In cases where the taxpayer makes incorrect declarations as prescribed in points a, b, d of Clause 1 of this Article, but does not lead to a shortage of tax payable or an increase in the tax exempted, reduced or not yet refunded, no penalty will be imposed according to Article 16 of Decree 125/2020/ND-CP but will be penalized according to Clause 3, Article 12 of Decree 125/2020/ND-CP.

2. What are judgments related to the act of incorrect declaration leading to insufficient tax payments?

Below is a compilation of some judgments related to incorrect declaration leading to insufficient tax payments:

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