Cases of exceptions to tax or invoice-related administrative penalty charge decisions in Vietnam

Cases of exceptions to tax or invoice-related administrative penalty charge decisions in Vietnam (Internet image) 

Regarding this issue, LawNet would like to answer as follows:

1. Cases of exceptions to tax or invoice-related administrative penalty charge decisions in Vietnam

Cases of exceptions to tax or invoice-related administrative penalty charge decisions in Vietnam are not issued according to Article 38 of Decree 125/2020/ND-CP are as follows:

- The following cases shall be exempted from penalty charge decisions:

+ Cases are stipulated in Article 9 of Decree 125/2020/ND-CP on exceptions to tax or invoice-related administrative penalties:

++ Exceptions to administrative penalties prescribed in laws on handling of administrative violations shall be treated as the exceptions to tax or invoice-related administrative penalties.

Taxpayers’ delay in carrying out electronic tax or invoice-related procedures due to technical problems of information technology systems that are informed on tax authorities’ web portals shall constitute the act of violation caused by force majeure events under the provisions of clause 4 of Article 11 in the Law on Handling of Administrative Violations.

++. Taxpayers’ commission of tax-related administrative violations due to the execution of instructional documents, decisions to respond to such violations of competent tax authorities or state regulatory agencies related to the tasks of determining taxpayer’s tax obligations (including those issued before the effective date of this Decree) shall be treated as exceptions to administrative penalties for tax-related violations or fines for late payment of taxes, except if taxpayers’ tax-related administrative violations are discovered after receipt of conclusions of tax inspections and examinations carried out at the taxpayer’s offices that none of the taxpayer’s defects arising from the declaration and calculation of taxes payable or tax exemptions, reductions or refunds have been discovered yet.

++ If, after making the false declaration, the taxpayer has supplemented tax returns and, of their own accord, has paid taxes before the time of the tax authority’s announcement of their decisions to conduct tax inspections or examinations at the taxpayer’s offices, or before the time of the tax authority’s discovery thereof without needing to carry out these inspections or examinations, or before the time of other competent authorities’ discovery thereof, the act of false declaration committed in this situation shall be exempted from any tax-related administrative penalties.

++ None of administrative penalties for tax-related violations shall be imposed upon persons directly carrying out personal income tax finalization procedures if they delay filing personal income tax finalization applications to claim their tax refunds; upon sole proprietorship households and sole proprietors subject to taxation or fixing of the constant tax rates as provided in Article 51 of the Law on Tax Administration.

++ During the extension of the time limit for tax return submission, taxpayers shall be exempted from any administrative penalties for violations related to the time limit for submission of tax returns.

+ Subject matters of tax or invoice-related administrative violations are not identified;

+ The time limit for the imposition of an administrative penalty prescribed in Article 8 herein, or the time limit for the issuance of a penalty charge decision provided in the law on handling of administrative violations, has expired;

+ The violating person has died or gone missing; the violating entity has dissolved or been bankrupt during the period of consideration of a penalty charge decision, except the case prescribed in point c of clause 4 of Article 41 of Decree 125/2020/ND-CP.

Bases for determining whether a person has died, gone missing; an entity has dissolved or been bankrupt, are subject to clause 2 of Article 41 of Decree 125/2020/ND-CP;

+ The file of a violation having a criminal sign has been referred for the criminal prosecution process.

- With respect to exceptions to penalty charge decisions prescribed in point a, b, c and d of clause 1 of Article 38 of Decree 125/2020/ND-CP, the person accorded the sanctioning authority shall not issue the penalty charge decision, but shall apply the prescribed remedy (if any).

The decision on enforcement of the remedy must clearly state reasons for exception to the administrative penalty charge decision; the applicable remedy, responsibilities and time limit for execution thereof.

2. Regulations on transmission and delivery of tax or invoice-related administrative penalty charge decisions in Vietnam

Regulations on transmission and delivery of tax or invoice-related administrative penalty charge decisions according to Article 39 of Decree 125/2020/ND-CP are as follows:

- Within the duration of 02 working days from the date of grant of an administrative penalty charge decision, the person having the authority to issue such decision must send or transmit the decision to the violating person or entity, the authority in charge of collecting fines and other relevant authorities (if any) for the purpose of execution of the decision.

- The administrative penalty charge decision must be electronically sent to the taxpayer’s mailing address registered with the supervisory tax authority if the sanctioned entity or person meets eligibility requirements for electronic tax transactions. Unless they meet such requirements, the penalty charge decision must be transmitted directly or sent in the form of registered mails by post as per clause 3 and 4 of Article 39 of Decree 125/2020/ND-CP.

- In case where the administrative penalty charge decision is transmitted directly, the officer transmitting such decision must make a report on transmission of that administrative penalty charge decision. In case where the penalty charge decision is transmitted directly but the violating entity or person deliberately ignore it, the competent person shall make a report on refusal to receive the decision attested by the local authority and, to such extent, the decision shall be deemed as sent and received.

- With respect to the decision which is sent by post in the form of the registered mail, if the violating entity or person deliberately ignore it after 10 days from the date on which the administrative penalty charge decision is sent by post till the third time and returned; if the administrative penalty charge decision has been posted at the residence of the violating person, the office of the violating entity, or it is established that the violating person evades receiving the administrative penalty charge decision, the decision shall be deemed sent and received.

In case where the tax authority sends the administrative penalty charge by post, the delivery note of the postal agency (confirming the successful delivery of the administrative penalty charge decision to the violating entity or person) must be filed in the archives of sanctioning documents and records.

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