Time limit for execution of tax or invoice-related administrative penalty charge decisions in Vietnam

Time limit for execution of tax or invoice-related administrative penalty charge decisions in Vietnam (Internet image)

1. What is tax and invoice-related administrative violation?

* According to Clause 1, Article 2 of Decree 125/2020/ND-CP, tax-related administrative violation means an act performed through an entity or person’s fault in breach of the provisions of the laws on tax administration, taxes and other collections, which is not a crime and is bound by laws to be subject to administrative penalties.

In which, other collections include:

+ Land levies;

+ Land rents, water surface rents;

+ Fees for grant of mineral rights;

+ Fees for grant of water abstraction rights;

+ After-tax profits remaining after setting aside a part of them to set up funds of enterprises whose 100% charter capital is held by the state;

+ Distributable dividends and profits on the state investments in joint-stock companies or multiple-member limited liability companies)

* According to Clause 2, Article 2 of Decree 125/2020/ND-CP, invoice-related administrative violation means an act performed through an entity or person’s fault in breach of the provisions of legislation on invoices, which is not a crime and is bound by laws to be subject to administrative penalties.

2. Time limit for execution of tax or invoice-related administrative penalty charge decisions in Vietnam

Time limit for execution of tax or invoice-related administrative penalty charge decisions in Vietnam according to Article 40 of Decree 125/2020/ND-CP is as follows:

- Time limit for execution of tax or invoice-related administrative penalty charge decisions shall be 01 year from the decision-issuing date.

Upon expiry of the aforesaid execution time limit, if the tax authority has not yet transmitted or sent the administrative penalty charge decision to the violating entity or person under the provisions of Article 39 of Decree 125/2020/ND-CP, that decision shall become inactive.

If the administrative penalty charge decision requires the enforcement of any remedy, such remedy shall be enforced as usual.

- If the sanctioned entity or person deliberately evades or defers execution of the decision, the time limit for execution of the penalty charge decision shall start from the date of termination of the act of evasion or deferment.

- If the tax authority has transmitted or sent the administrative penalty charge decision to the violating entity or person as provided in Article 39 of Decree 125/2020/ND-CP, but the sanctioned entity or person has not yet paid or has not fully paid fines, back taxes or deferred amounts:

The tax authorities must track amounts not yet paid on tax administration systems and apply measures to enforce recovery of outstanding taxes under regulations in order to fully collect amounts payable into the state budget.

3. Execution of tax or invoice-related administrative penalty charge decisions in cases where sanctioned persons are dead or missing; sanctioned entities are dissolved or bankrupt in Vietnam

Execution of tax or invoice-related administrative penalty charge decisions in cases where sanctioned persons are dead or missing; sanctioned entities are dissolved or bankrupt according to Article 41 of Decree 125/2020/ND-CP is as follows:

- In case where the sanctioned person is dead or missing; the sanctioned entity is dissolved or bankrupt, fine amounts specified in penalty charge decisions shall be invalidated while remedies specified in penalty charge decisions remain in force.

The person issuing the penalty charge decision must issue the decision on execution of part of that decision within 60 days after receipt of the notice stating that the sanctioned person is dead or missing; the sanctioned entity is dissolved or bankrupt.

If the penalty charge decision does not include any remedy, the person accorded the sanctioning authority shall issue the decision on suspension of execution of the penalty charge decision.

- Bases for determining whether a person has died, gone missing; an entity has been dissolved or bankrupt:

+ The death certificate or the notice of death or other substitutes of notice of death under laws on civil status, or the court’s decision stating a person is dead or missing (original or duplicate copy required by laws) with respect to the case of a dead or missing person;

+ The notice of dissolution of an enterprise or cooperative issued by the business registration authority or the cooperative registration authority with respect to the case of dissolution of an enterprise or cooperative;

The notice of termination of TIN of the tax agency with respect to the case in which the dissolved entity is not an enterprise or cooperative (original or duplicate copy required by laws);

+ The bankruptcy declaration decision with respect to the bankrupt enterprise or cooperative (original or duplicate copy required by laws).

- The decision on execution of a part of the penalty charge decision must include the followings:

Revocation of the fine and reasons for such revocation; contents of the penalty charge decision that continue to be executed, name of the entity or person responsible for the continued execution of the penalty charge decision; execution time limit.

- The succession of obligations to execute the remedy from the dead, missing person or the dissolved or bankrupt entity

+ The successor shall be responsible for executing the remaining part of the penalty charge decision regarding the remedy within the scope of the decedent's estate.

If the estate has not yet been divided, the remaining part of the penalty charge decision regarding the remedy that is bequeathed by the decedent shall be executed by the custodian of such estate.

If the estate has already been divided, each successor shall execute the remaining part of the penalty charge decision regarding the remedy that is bequeathed by the decedent, respectively, provided that such part does not exceed the value of estate that he/she inherits, unless otherwise agreed.

In case where the State or any entity receives the estate under will, they shall be responsible for executing the remaining part of the penalty charge decision regarding the remedy that is bequeathed by the decedent in the same way as in the case of the successor who is a person.

If there is none of the testate successor or the successor by operation of law, or there is the successor who disclaim the estate, regulations laid down in civil legislation shall be implemented.

+ The court-appointed guardian or custodian of the property owned by the person declared missing shall be responsible for executing the remaining part of the penalty charge decision (the remedy) within the scope of the property that he/she manages on behalf of the missing person.

+ If the dissolved entity is a subordinate entity or a business location of an enterprise; the entity is dissolved due to the reorganization of an enterprise, cooperative or other entity; the branch or representative office of a foreign trader or the management office of a foreign contractor in Vietnam is dissolved, the dissolved entity shall not be exempted from executing any fine prescribed in a penalty charge decision.

Quoc Dat

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