Vietnam: False declaration to reduce tax payable will be severely fined

According to Clause 1 Article 16 of the Decree No. 125/2020/NĐ-CP of Vietnam’s Government:

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:

- 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;

- 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;

- 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;

- 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;

- 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.

View more details at the Decree No. 125/2020/NĐ-CP of Vietnam’s Government, effective from December 05, 2020.

Thuy Tram

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