What are acts of using illegal invoices or evidencing documents and illegally using invoices or evidencing documents in Vietnam?

What are acts of using illegal invoices or evidencing documents and illegally using invoices or evidencing documents in Vietnam? (Internet image)

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

1. What are acts of using illegal invoices or evidencing documents in Vietnam?

According to Clause 1, Article 4 of Decree 125/2020/ND-CP, using the invoices or evidencing documents mentioned hereunder constitutes the act of using illegal invoices or evidencing documents:

- Counterfeit invoices and evidencing documents;

- Invoices and evidencing documents not yet valid or expired;

- Invoices suspended during the period of enforcement of the invoice suspension penalty, except those permitted for use according to a tax authority's notice;

- E-invoices which are not registered with any tax authority;

- E-invoices of which tax authority's codes have not yet been granted if they are subject to the regulation under which e-invoices with tax authority’s codes are required;

- Invoices for purchase of goods or services with the invoicing date specified thereon which falls within the period from the date on which a tax authority determines that the seller is not doing business at the address registered with a competent regulatory authority;

- Invoices or evidencing documents for purchase of goods or services with the invoicing date before the date on which it is determined that the invoicing party are not doing business at the address registered with a competent regulatory authorities or, though the invoicing party’s notification of the closing of their business at the address already registered with the competent regulatory authority has not been sent to the tax authority, the tax authority or the police authority or other regulatory agency establishes that they are illegal.

2. What are acts of illegally using invoices or evidencing documents in Vietnam?

According to Clause 2, Article 4 of Decree 125/2020/ND-CP, using the invoices or evidencing documents in the following cases constitutes the act of illegally using invoices or evidencing documents:

- Invoices or evidencing documents that do not contain all compulsory contents as prescribed; invoices on which information is erased or corrected in breach of regulations;

- Fraudulent invoices or evidencing documents (i.e. invoices or evidencing documents containing details about goods and services which are not partially or entirely rendered); invoices incorrectly reflecting amounts due, or invoices issued as fraudulent, false or fake ones;

- Invoices with discrepancies in amounts paid for goods or services rendered, or discrepancies in required data fields between an invoice’s copies;

- Issued invoices reused with fictitious information for the purpose of transporting goods at the circulation stage or invoices for goods or services which are used for evidencing the rendering of the other goods or services;

- Invoices or evidencing documents of other entities or persons (except if invoices are received from tax authorities and issued under trust) used for certifying the purchased goods or services or the sold goods or services;

- Invoices or evidencing documents in the case where the tax, police or other regulatory authority concludes that they are used illegally.

3. Principles of sanctioning administrative violations on taxes and invoices in Vietnam

Principles of sanctioning administrative violations on taxes and invoices in Vietnam according to Article 5 of Decree 125/2020/ND-CP (amended in Decree 102/2021/ND-CP) are as follows:

-  Imposing administrative penalties for tax or invoice-related violations must conform to laws on tax administration and handling of administrative violations.

- Entities and persons shall be subject to administrative penalties for tax or invoice-related violations only if they commit tax or invoice-related violations under the provisions of Decree 125/2020/ND-CP.

- If an entity or person commits multiple administrative violations, a penalty for each violation shall be imposed, except in the following cases:

= If a taxpayer makes incorrect declarations in one or more required data fields contained in tax files for the same tax type at a time, the act of making such incorrect declarations falling into the case of imposition of penalties for violations arising from the implementation of tax procedures shall only be subject to the penalty for the act of making incorrect declarations in tax files of which the amount is highest amongst other penalties for those acts committed as provided herein, and shall be treated as the administrative violation committed multiple times under the aggravating circumstances;

= If a taxpayer makes incorrect declarations in one or more required data fields contained in tax files for the same tax type at a time, the act of making such incorrect declarations falling into the case of imposition of penalties for violations arising from the implementation of tax procedures shall only be subject to the penalty for the act of making incorrect declarations in tax files of which the amount is highest amongst other penalties for those acts of the same class committed as provided herein, and shall be treated as the administrative violation committed multiple times under aggravating circumstances.

In case where there is any late tax return classified as an act of tax evasion, out of all late tax returns, this violation shall be separately sanctioned in the same manner as acts of tax evasion;

= If, at the same time, a taxpayer delays submitting a number of invoice-related notices and reports of the same kind, the violating taxpayer shall be fined for their act of deferred submission of invoice-related notices or reports at the amount which is highest amongst other fines for those acts of the same class committed as provided herein, and shall be treated as the administrative violation committed multiple times under aggravating circumstances;

= Any violation arising from use of illegal invoices or illegal use of invoices which is classified into those violations subject to penalties prescribed in Article 16 and 17 of Decree 125/2020/ND-CP shall not be fined under Article 28 of Decree 125/2020/ND-CP.

- In case where an administrative procedure includes a number of documents of which more than one violation is prescribed herein, the violating entity or person shall be fined for each of the violations that they have committed.

- For a tax or invoice-related administrative violation, if an entity commits such violation, they must be fined two times as much as the amount of penalty imposed on persons, except the amounts of penalty for the acts prescribed in Article 16, 17 and 18 of Decree 125/2020/ND-CP.

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