Policy on Taxes, Fees, and Charges Effective from August 01, 2016

1. New regulations on penalties for violations in price, fee, charge, and invoice management

The Decree 49/2016/ND-CP amending Decree 109/2013/ND-CP prescribing penalties for administrative violations in the field of price, fee, charge, and invoice management, effective from August 1, 2016, has some notable points as follows:

- Reduced fines when the seller loses, burns, or damages invoices.

Except in cases of invoices lost, burned, or damaged due to natural disasters, fires, or other unexpected or force majeure events, the seller of goods and services will be fined from VND 4 million to VND 8 million for one of the following cases of lost, burned, or damaged invoices:

- Issued invoices not yet made out;- Made-out invoices not yet received by the customer (copy handed to the customer);- Made-out invoices based on the sales invoice list of goods and services.

Therefore, the fine for the above behavior has been reduced compared to the previous regulations in Decree 109/2013/ND-CP which prescribed fines of VND 10 million - 20 million.

- The chairman of the People's Committee (UBND) will be authorized to impose administrative penalties concerning invoices.

The chairman of the People's Committee (UBND), in addition to having the authority to impose administrative penalties in the fields of price, fee, and charge management, will also have the authority to impose administrative penalties in the field of invoice management. Depending on the level of management, the chairman of the People's Committee will have varying authority to impose penalties. Specifically:

- The chairman of the commune-level People's Committee has the authority to: Issue warnings; impose fines up to VND 5 million;- The chairman of the district-level People's Committee has the authority to: Issue warnings; impose fines up to VND 25 million;- The chairman of the provincial-level People's Committee has the authority to: Issue warnings; impose fines up to VND 50 million.

- Increased fines for buyers losing, burning, or damaging invoices.

If the buyer loses, burns, or damages a made-out invoice (copy handed to the customer) used for accounting, tax declaration, or budget payment purposes, they will be fined from VND 4 million to VND 8 million.

This fine has doubled compared to previous regulations in Decree 109 (VND 2 million - 4 million). Thus, buyers must further enhance their responsibility in preserving and maintaining invoices.

- Fines up to VND 5 million for not publicly disclosing fee and charge policies.

According to Decree 49/2016/ND-CP, violating regulations on public disclosure of fee and charge policies will incur fines ranging from VND 2 million - 5 million. Violations of public disclosure regulations include:

- Not publicly disclosing fee and charge policies as prescribed;- Posting or notifying non-conforming, unclear information causing confusion for fee and charge payers.

Thus, the fine for not publicly disclosing fee and charge collection has significantly increased compared to the fine of VND 1 million - 3 million stipulated in Decree 109.

2. Tax evasion, VAT fraud will be subject to criminal handling

This is stated in Circular 99/2016/TT-BTC guiding the management of VAT refunds effective from August 13, 2016.

If tax authorities detect signs of tax evasion or fraud according to tax laws, and there are indications of a crime, the tax authority will transfer the file to the police for handling under the provisions of the Criminal Procedure Code.

3. Electronic tax payment procedures on the General Department of Taxation's Electronic Information Portal

According to Circular 84/2016/TT-BTC guiding the procedures for state budget collection for taxes and domestic revenues, the process of paying taxes via the General Department of Taxation's Electronic Information Portal is as follows:

- Taxpayers prepare tax payment vouchers according to Form No. C1-02/NS issued together with Circular 84 using an electronic tax transaction account issued by the tax authority;- The General Department of Taxation's Electronic Information Portal receives and processes the electronic tax payment voucher;- The bank where the taxpayer has an account will verify the information on the state budget payment voucher and debit the taxpayer’s account.

Circular 84/2016/TT-BTC takes effect from August 1, 2016.

4. Circular 94/2016/TT-BTC amending Decision 59/2006/QD-BTC stipulating the collection levels, policies on the collection, payment, management, and use of appraisal fees and licensing fees for exploration, exploitation, use of water resources, discharge of wastewater into water sources, and groundwater drilling; Circular 02/2014/TT-BTC guiding fees and charges under the decision-making authority of provincial and municipal People’s Councils.

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