Tax evasion in Vietnam is one of the serious violations of the law. Individuals and organizations that commit acts of tax evasion will be punished according to Vietnam Tax laws and related documents.
According to the provisions of Article 17 of Decree 125/2020/ND-CP sanctioning administrative violations of invoice tax (“Decree 125”), the act of tax evasion depends on the seriousness, extenuating circumstances, number of repeat offenders, will be fined from 1 time to 3 times the evaded tax amount. Specifically:
Penalty for evading tax amount
Clause 1, Article 17 of Decree 125 stipulates that the acts of being sanctioned 1 time the evaded tax amount are:
– Failing to submit tax registration documents; failing to submit a tax return or submit a tax return after 90 days from the date of expiration of the time limit for submitting tax returns or from the date of expiration of the extension of time limit for submitting tax returns, except for the case specified at point b, c Clauses 4 and 5, Article 13 of Decree 125;
– Failing to record in the accounting books the revenues related to the determination of the payable tax amount, failing to declare or declare incorrectly, leading to a lack of payable tax amounts or an increase in the amount of tax refunded, exempted or reduced, except for the acts specified in Article 16 of Decree 125;
– Failing to issue invoices when selling goods and services, unless the taxpayer has declared tax on the value of sold and supplied goods and services in the corresponding tax period; issue invoices for the sale of goods or services with incorrect quantity and value of goods and services for tax declaration, which is lower than the actual amount and is discovered after the deadline for submitting tax declaration dossiers;
– Illegal use of invoices; Illegally using invoices to declare tax to reduce the payable tax amount or increases the tax refunded, exempted or reduced tax amounts;
– Using illegal documents; illegal use of vouchers; using vouchers and documents that do not reflect the true nature of the transaction or the actual transaction value to incorrectly determine the payable tax amount, the exempted or reduced tax amount, or the refundable tax amount; making procedures and dossiers for the destruction of supplies and goods which are not true, which reduces the payable tax amount or increases the tax amount to be refunded, exempted or reduced;
– Using goods that are not subject to tax, tax exemption or consideration for tax exemption for improper purposes without declaring the change of use purpose or declaring tax to the tax authority;
– Taxpayers have business activities during the time of applying for cessation or suspension of business activities but fail to notify the tax authorities, except for the case specified at Point b, Clause 4, Article 10 of Decree 125.
According to the provisions from Clauses 2 to 5, Article 17 of Decree 125, individuals and organizations that violate the law and commit acts of tax evasion will be fined from:
– 1.5 times the amount of tax evaded for taxpayers who commit one of the acts specified in Clause 1, Article 17 without aggravating or mitigating circumstances.
– 2 times the amount of tax evaded for taxpayers who commit one of the acts specified in Clause 1, Article 17 with an aggravating circumstance.
– 2.5 times the evaded tax amount for taxpayers who commit one of the acts specified in Clause 1, Article 17 with two aggravating circumstances.
– 3 times the evaded tax amount for taxpayers who commit one of the acts specified in Clause 1, Article 17 with three or more aggravating circumstances.
Clause 6, Article 17 of Decree 125 stipulates that individuals and organizations that commit the above acts of tax evasion will be forced to pay the full amount of tax evaded into the state budget.
In case the act of tax evasion has passed the statute of limitations for sanctioning, the taxpayer will not be sanctioned for the act of tax evasion, but the taxpayer must fully pay the evaded tax amount and late payment interest calculated on the evaded tax amount into the state budget.
In addition, the tax evader is also forced to adjust the amount of loss, the amount of input value added tax deducted on the tax file (if any).