What are the sanctioning forms, remedies and principles of imposition of fines for tax or invoice-related administrative violations?

Receiving administrative penalties is undesirable for any enterprise. Therefore, business owners need to proactively learn about the formats of penalties for tax or invoice-related administrative violations and how to resolve the consequences. Pursuant to Article 7, Decree 125/2020/ND-CP, sanctioning forms, remedies and principles of imposition of fines for tax or invoice-related administrative violations are stipulated as follows:

1. Main sanctioning forms

b) Cautions

Cautions shall be applicable to violations arising from implementation of tax or invoice-related procedures which are not serious, are committed under mitigating circumstances and are classified as those subject to cautions under this Decree.

b) Fines

Fines not greater than VND 100,000,000 shall be imposed on entities committing invoice-related violations. Fines not greater than VND 50.000.000 shall be imposed on entities committing invoice-related violations.

Fines not greater than VND 200,000,000 shall be imposed on taxpayers that are entities committing tax-related violations. Fines not greater than VND 100,000,000 shall be imposed on taxpayers that are persons committing tax-related violations.

A fine which equals 20% of the underpaid tax amount or the higher-than-prescribed amount of tax exemption, reduction or refund shall be imposed for any violation arising from the act of false declaration leading to the underpayment of tax amount or the increase in the amount of tax exemption, reduction or refund.

A fine which is 1 or 3 times as much as the evaded tax amount shall be imposed for any tax evasion act.
A fine corresponding to the amount which has not yet paid into the state budget account shall be imposed for any act of violation stipulated in point 1 of Article 18 herein.

2. Other supplementary penalties: The temporary suspension of the invoice printing business shall be enforced.

3. Remedies

a) Compelling the full payment into the state budget in case of the underpayment of tax amounts, the higher-than-prescribed enjoyment of tax exemption, reduction or refund.

b) Compelling the re-adjustment of losses, the carried-forward amounts of input VAT deductions.

c) Compelling the submission of the application for changes in tax registration information; the re-submission and supplementary submission of documents included in tax returns; the submission of tax returns and appendices; the provision of information.

d) Compelling the implementation of regulatory procedures for the release of invoices.

dd) Compelling the issuance of invoices as required by laws.

e) Compelling the cancellation or destruction of invoices and related printouts.

g) Compelling the issuance and submission of invoice-related notices or reports.

h) Compelling the transfer of electronic invoice data.

i) Compelling the disgorgement of illegal gains from commission of administrative violations.

4. Principles of determination of fine amounts

a) The fine amounts specified in Article 10, 11, 12, 13, 14 and 15; clause 1 and 2 of Article 19; and Chapter III herein, shall be those applied to violating entities.

Taxpayers that are family households or sole proprietorship households shall be fined the same as violating persons.

b) When determining the fine amounts imposed on the taxpayers that commit violations under both aggravating and mitigating circumstances, the aggravating circumstance shall be reduced or relieved according to the one-for-one rule under which a mitigating circumstance is offset against a aggravating circumstance.

c) Any mitigating or aggravating circumstance which is already used as a basis for determining the fine range for a violation shall not be used for determination of the specific fine amount under the provisions of point d of this clause.

d) With respect to fines, the specific amount of fine for a violation arising from the implementation of tax or invoice-related procedures as prescribed in Article 19 herein must be the average of specific fines in the range for such violation. For a mitigating circumstance that exists, the average fine for a violation in the fine range shall be reduced by 10% provided that the fine amount imposed for such violation is not lower than the minimum fine in that range. Meanwhile, for an aggravating circumstance that exists, the average fine for a violation in the fine range shall be increased by 10% provided that the fine amount imposed for such violation is not greater than the maximum fine in that range.

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.