Summary of acts considered as tax evasion in Vietnam (Internet image)

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

1. Summary of acts considered as tax evasion in Vietnam

Summary of acts considered as tax evasion in Vietnam under Article 143 of the Law on Tax Administration 2019 are as follows:

- Failure to submit the application for taxpayer registration; failure to submit the tax declaration dossier or to submit the tax declaration within 90 days from the deadline or extended deadline for submission specified in the Law on Tax Administration 2019.

- Failure to record the revenues relevant to calculation of tax payable in the accounting books.

- Failure to issue invoices when selling goods/services as prescribed by law; write lower prices on the sale invoices than the actual prices.

- Use of illegal invoices or illegal use of invoices for purchases in order to decrease the tax payable or increase the tax eligible for remission, deduction, refund or cancellation.

- Use of documents that do not truthfully reflect the nature of the transactions or their values which leads to decrease in the tax payable or increase in the tax eligible for remission, refund or cancellation.

- Incorrect declaration of exports or imports without making supplementation after customs clearance is granted.

- Deliberate omission or incorrect declaration of export or import duty.

- Collaboration with the consignor in evading import duty.

- Repurposing of tax-free goods without informing the tax authority.

- Carrying on business operation during the suspension period without informing the tax authority.

- In the following cases, the penalties mentioned in Clause 1 Article 141 of the Law on Tax Administration 2019 shall be imposed instead of penalties for tax evasion:

+ The taxpayer fails to submit the application for taxpayer registration; fails to submit the tax declaration dossier or submits the tax declaration after 90 days without incurring tax;

+ The taxpayer fails to submit the tax declaration dossier within 90 days after tax is incurred but has fully paid the tax, late payment interest before the tax authority announces the tax audit or tax inspection decision, or before the tax authority issues the record on late submission of the tax declaration dossier.

2. Understatement of tax payable or overstatement of tax eligible for refund, remission or cancellation in Vietnam

According to Clause 1, Article 142 of the Law on Tax Administration 2019, understatement of tax payable and overstatement of tax eligible for refund, remission or cancellation include:

- The taxpayer incorrectly declares the basis for tax calculation or the deductible tax; the eligibility for tax remission or refund. However the transactions are fully recorded in legal accounting books, invoices and other documents;

- The figures in the taxpayer’s market value determination documents or the declaration of related-party transactions are found incorrect by tax inspectors or tax auditors in a manner that results in Understatement of tax payable or overstatement of tax eligible for remission or refund;

- The taxpayer uses illegal invoices/documents or illegally uses invoices that lead to decrease in tax payable or increase in tax eligible for remission or refund but the buyer of goods/services under the illegal invoices is able to prove that the seller is at fault.

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