Time limits for imposition of penalties for tax administrative offences in Vietnam

Time limits for imposition of penalties for tax administrative offences in Vietnam (Internet image)

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

1. Rules for imposition of penalties for tax administrative offences in Vietnam

Rules for imposition of penalties for tax administrative offences in Vietnam according to Article 136 of the Law on Tax Administration 2019 are as follows:

- Penalties for tax administrative offences shall be imposed in accordance with regulations of law on tax administration and administrative penalties.

- Use of illegal invoices, illegal use of invoices, improper use of invoice that lead to underpayment of tax or tax evasion shall incur penalties for tax administrative offences instead of administrative penalties for invoice-related offences.

- The maximum fines for understatement of tax payable or overstatement of tax eligible for refund, remission, cancellation, and tax evasion shall be imposed in accordance with this Law.

- The fine for a tax offence committed by an organization is twice the fine for the same offence committed by an individual, except for understatement of tax payable and overstatement of tax eligible for refund, remission, cancellation, and tax evasion.

- In case of tax liability imposition specified in Article 50 and Article 52 of the Law on Tax Administration 2019, the offence, depending on its nature and seriousness, may incur the penalties for tax administrative offences specified in this Law.

- The on-duty competent person that discovers the tax offence shall issue a record as prescribed by law.

In case the taxpayer declares tax electronically, the electronic tax notice that specifies the tax offence shall be the basis for penalty imposition.

- Criminal laws shall apply if the tax offence is liable to criminal prosecution.

2. Time limits for imposition of penalties for tax administrative offences in Vietnam

Time limits for imposition of penalties for tax administrative offences according to Article 137 of the Law on Tax Administration 2019 is as follows:

- The time limit for imposition of penalties for an offence against tax procedures is 02 years from the day on which the offence is committed.

- The time limit for imposition of tax evasion that is not liable to criminal prosecution, understatement of tax payable or overstatement of tax eligible for refund, remission or cancellation is 05 years from the day on which the offence is committed.

- After the aforementioned time limits expire, the taxpayer will not incur penalties but still has to fully pay the outstanding tax, the evaded tax, the incorrectly reduced, exempted or refunded tax plus (+) late payment interest that have accrued over the last 10 years before the day on which the offence is discovered.

In case the taxpayer is not registered, the outstanding tax plus (+) late payment interest that has accrued before the offence is discovered.

3. Penalties, fines and remedial measures on tax administration in Vietnam

Penalties, fine levels and remedial measures on tax administration according to Article 138 of the Law on Tax Administration 2019 are as follows:

- Penalties for tax administrative offences include:

+ Warning;

+ Fine.

- Fines for tax offences

+ The maximum fines for the offences specified in Article 141 of the Law on Tax Administration 2019 shall comply with regulations of law on administrative penalties;

+ The fine for understatement of tax payable or overstatement of tax eligible for refund, remission or cancellation in the cases specified in Point a Clause 2 Article 142 of the Law on Tax Administration 2019 shall be 10% of the difference;

+ The fine for understatement of tax payable or overstatement of tax eligible for refund, remission or cancellation in the cases specified in Clause 1, Point b and Point c Clause 2 Article 142 of the Law on Tax Administration 2019 shall be 20% of the difference;

+ The fine for tax evasion specified in Article 143 of the Law on Tax Administration 2019 shall be 01 – 03 times the tax evaded.

- Remedial measures include:

+ Full payment of outstanding tax;

+ Payment of tax incorrectly exempted, reduced, refunded or cancelled.

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