Vietnam: From December 05, the fine for tax evasion no longer follows the number of committing

Vietnam: From December 05, the fine for tax evasion no longer follows the number of committing (Illustration image)

According to the provisions of Article 17 of Decree 125/2020/ND-CP (effective from December 05, 2020), the fine for individuals committing tax evasion in Vietnam will follow the amount of tax evaded and mitigating and aggravating circumstances:

1. The fine which equals the amount of evaded tax shall be imposed on the taxpayer committing any of the following violations under at least a mitigating circumstance:

a) Failing to submit tax registration applications; failing to file tax returns or filing tax returns 90 days after the deadline or the extended deadline for submission of tax returns, except the cases prescribed in point b and c of clause 4 and 5 of Article 13 herein;

b) Failing to keep accounting entries of amounts collected from the determination of taxes payable, any deficiency in taxes amounts due to non-declaration or false declaration or any increase in amounts of tax refund, exemption or reduction, except the acts prescribed in Article 16 herein;

c) Failing to issue invoices for sale of goods or provision of services, except the cases where the taxpayer has recorded taxes on sold goods or supplied services in the corresponding tax term; issuing invoices for sale of goods or provision of services in which the invoiced items and amounts based on which tax declaration is made are less than those that actually exist if this act is discovered after the deadline for submission of tax returns;

d) Using illegal invoices; illegally using invoices for declaring taxes with the intention of reducing taxes payable or increasing amounts of tax refund, exemption or reduction;

dd) Using illegal evidencing documents; illegally using evidencing documents; using evidencing documents or records that do not correctly reflect the nature of transactions or actual values of these transactions for the purpose of falsely determining taxes payable, amounts of tax exemption, reduction or refund; preparing documents or records on destruction of supplies or goods which are not real, resulting in any reduction in taxes payable or any increase in amounts of tax refund, exemption or reduction;

e) Using goods not subject to taxes, or those qualified for tax exemption or consideration of tax exemption, to frustrate the prescribed purposes without informing tax authorities about the conversion of these purposes or registering tax declarations with tax authorities;

g) The violating taxpayer performs business activities during the period of business closure or temporary suspension without informing tax authorities, except the cases prescribed in point b of clause 4 of Article 10 herein.

2. The fine which is 1.5 times as much as the amount of evaded tax shall be imposed on any taxpayer committing one of the violations prescribed in clause 1 of this Article under neither aggravating nor mitigating circumstances (as stipulated in Circular 166/2013/TT-BTC: Imposing a fine which is 1.5 times the evaded tax for taxpayers with one of the acts mentioned for first violations under aggravating circumstances or second violations under one mitigating circumstance.

3. The fine which is 2 times as much as the amount of evaded tax shall be imposed on any taxpayer committing one of the violations prescribed in clause 1 of this Article under an aggravating circumstance (as stipulated in Circular 166/2013/TT-BTC: Imposing a fine which is twice the evaded tax amount for taxpayers with one of the acts mentioned in cases of second violations without mitigating circumstances or third violations under one mitigating circumstance).

4. The fine which is 2.5 times as much as the amount of evaded tax shall be imposed on any taxpayer committing one of the violations prescribed in clause 1 of this Article under two aggravating circumstances (as stipulated in Circular 166/2013/TT-BTC: Imposing a fine which is 2.5 times the evaded tax amount for taxpayers with one of the acts mentioned in cases of second violations under one aggravating circumstance or third violations without mitigating circumstances).

5. The fine which is 3 times as much as the amount of evaded tax shall be imposed on any taxpayer committing one of the violations prescribed in clause 1 of this Article under at least three aggravating circumstances (as stipulated in Circular 166/2013/TT-BTC: Imposing a fine which is three times the evaded tax amount for taxpayers with one of the acts mentioned in cases of second violations under two or more aggravating circumstances, third violations with aggravating circumstances, or fourth and subsequent violations).

Note: The above fines apply to organizations under Clause 1 of Article 5 of Decree 125/2020/ND-CP.

Thus, compared to before (Circular 166/2013/TT-BTC), in Decree 125/2020/ND-CP, the fine for tax evasion no longer follows the number of committing/the amount of evaded tax. Instead, taxpayers committing one of the nine acts above will face a fine following the number of committing/the amount of evaded tax and the number of mitigating or aggravating circumstances.

Ty Na

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