How much is fine for making false tax declaration in Vietnam?

How much is fine for making false tax declaration in Vietnam?

In Article 16 of Decree 125/2020/ND-CP stipulating 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, as follow:

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.

According to this Article, because you incorrectly declare the payable tax amount of 180 million VND, you will be fined 36,000,000 VND and forced to pay 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 in Vietnam.

Can false tax declaration will be liable for criminal prosecution for tax evasion in Vietnam?

Pursuant to Clause 1, Clause 4, Article 200 of the 2015 Penal Code as amended by Point a, Clause 47, Article 1 of the 2017 Penal Code Amendment Law on tax evasion, as follows:

1. Any person who commits any of the following acts of tax evasion with an amount of evaded tax from VND 100,000,000 to under VND 300,000,000 or under VND 100,000,000 while having incurred an administrative penalty for tax evasion or having an unspent conviction for any of the offences specified in Article 188, 189, 190, 191, 192, 193, 194, 195, 196, 202, 250, 251, 253, 254, 304, 305, 306, 309 and 311 hereof shall be liable to a fine of from VND 100,000,000 to VND 500,000,000 or face a penalty of 03 - 12 months' imprisonment:

a) Failure to submit the application for tax registration; failure to submit the tax declaration; submitting a tax declaration after 90 days from the deadline for submitting the tax declaration or after the extended deadline for submitting the tax declaration as prescribed by law;

b) Failure to record revenues related to the determination of tax payables in accounting books;

c) Failure to issue invoices after selling goods/services or write lower values on invoices than actual values of goods/services sold;

d) Use illegal invoices or vouchers to record purchased goods and raw materials that results in reduction of tax payable or increase exempt, reduced, deductible or refundable tax;

dd) Use of other illegal documents to falsify the amount of tax payable or increase exempt, reduced, deductible or refundable tax;

e) Making incorrect declaration of exported or imported goods without making an additional declaration after customs clearance are granted, except in the circumstances specified in Article 188 and Article 189 hereof;

g) Failure to declare or to correctly declare taxes on exported or imported goods, except in the circumstances specified in Article 188 and Article 189 hereof;

h) Collaborating with the consignor to illegally import goods, except in the circumstances specified in Article 188 and Article 189 hereof;

i) Using tax-free goods, goods eligible for tax exemption or conditional tax exemption for improper purposes without notifying the change of purposes to the tax authority.

4. The offender might also be liable to a fine of from VND 20,000,000 to VND 100,000,000 , be prohibited from holding certain positions or doing certain works for 01 - 05 years or have all or part of his/her property confiscated.

Thus, when you declare the false tax number, you may be fined from VND 100,000,000 to VND 500,000,000 or imprisoned from 3 months to 1 year. In addition, the offenders are also prohibited from holding certain positions or doing certain works for 01 - 05 years, or having part or all of their property confiscated in Vietnam.

Best Regards!