What are the principles for imposing fines on tax or invoice-related violations?

After the inspection, tax or invoice-related misconduct or violations will receive administrative penalties. Understanding about the principles of sanctions will help enterprises avoid future risks and take better caution with tax documents and invoices. Pursuant to Article 5, Decree 125/2020/ND-CP of the Government, sanctioning principles are stipulated as follows:

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

2. 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 this Decree.

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

a) 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 violation committed repeatedly under the aggravating circumstances;

b) 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 violation committed repeatedly 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;

c) 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 repeated violation committed under aggravating circumstances;

d) 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 herein shall not be fined under Article 28 herein.

4. 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.

5. 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 herein.

As an established company in the field of tax and legal consulting, Vinasc hopes to adequately inform our customers to help them mitigate the risk during operation in Vietnam. Should there be any further concern, please contact Vinasc’s Customer Care department for timely support.