Vietnam: The time limit for imposition of tax-related administrative penalties is at most 5 years

According to Clause 2 Article 8 of the Decree No. 125/2020/NĐ-CP of Vietnam’s Government, time limits for imposition of tax-related administrative penalties are prescribed as follows:

1. 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 of Decree No. 125/2020/NĐ-CP, 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 of Decree No. 125/2020/NĐ-CP, 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.

2. Time limit for imposition of administrative penalties for the act of tax evasion committed not to the extent that a criminal action is brought, or the act of making false declarations leading to the underpaid tax amount or the increased amount of tax exemption, reduction or refund, shall be 05 years from the date of commission of any of such acts.

The date of commission of the act of making false declaration resulting in the underpaid tax amount or the increased amount of tax exemption, reduction or refund or the act of tax evasion (except the act prescribed in point a of clause 1 of Article 17 of Decree No. 125/2020/NĐ-CP) is the date following the deadline for submission of tax returns within the tax term for which violating taxpayers make declarations causing tax shortfall, tax evasion, or the date succeeding the date of a competent authority's issuance of the tax refund, exemption or reduction decision.

As for acts of failure to submit tax registration applications or failure to submit tax returns as prescribed in point a of clause 1 of Article 17 of Decree No. 125/2020/NĐ-CP, 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. As for the act of submitting tax returns after the prescribed 90-day duration prescribed in point a of clause 1 of Article 17 of Decree No. 125/2020/NĐ-CP, the date of commission of this act which is accepted as the start date of that time limit shall be the date on which taxpayers submit their tax returns.

Note: If a violating entity or person evades or militates against penalties, time limits for imposition of administrative penalties shall be reset, starting from the time of abandonment of acts of evading or militating against penalties.

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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