The government has just issued Decree 125/2020/ND-CP regulating administrative penalties for tax and invoice violations, effective from December 5, 2020, according to which many penalties for tax and invoice violations have increased significantly.
There are many reasons to get vaccinated, here are ten obvious ones, but there are more 8 important changes regarding penalties for tax violations. , and 3 important changes regarding penalties for invoice-related violations.
First, there are 8 important changes regarding administrative penalties for tax violations.
1. Principles for determining the amount of fines when applying aggravating and mitigating circumstances.
– Amend regulations on determining the amount of fines when applying aggravating and mitigating circumstances to violations of tax procedures:
+ CurrentEach aggravating or mitigating circumstance increases or decreases the average penalty within the fine range by 20%.
+ New rulesEach aggravating or mitigating circumstance increases or decreases the average penalty within the fine range by 10% (point d, clause 4, Article 7).
– The regulations should be amended to clearly define the principle for determining the fine amount when applying aggravating or mitigating circumstances to invoice-related violations: each aggravating or mitigating circumstance will increase or decrease the average fine amount within the fine range by 10%.
2. Violations of deadlines for tax registration, notification of temporary suspension of business operations, and notification of resumption of business operations before the deadline (Article 10)
– Increase the fines for violations of tax registration deadlines:
+ Current penalty: a fine ranging from 400.000 VND to 2.000.000 VND.
+ New regulation: Fines ranging from VND 1.000.000 to VND 10.000.000, including a fine of VND 6.000.000 to VND 10.000.000 for tax registration exceeding the prescribed deadline by 91 days or more.
– Additional penalties will be imposed for violations of the deadlines for notifying the temporary suspension of business operations or for notifying the resumption of business operations before the deadline.
3. Violations of the deadline for notifying changes in tax registration information (Article 11)
– Increase the fine for violations of the deadline for notifying changes in tax registration information:
+ Current penalty: a fine ranging from 400.000 VND to 2.000.000 VND.
+ New regulation: fines ranging from 500.000 VND to 7.000.000 VND.
4. The act of providing false or incomplete information in tax documents that does not result in a shortfall in tax payments (Article 12)
– Increase the fines for incorrect or incomplete declarations in tax returns:
+ Current penalty: a fine ranging from 400.000 VND to 3.000.000 VND.
+ New regulation: fines ranging from 500.000 VND to 8.000.000 VND.
– Increase the fines for false declarations that do not result in tax underpayment or tax evasion:
+ Current penalty: a fine ranging from 1.200.000 VND to 3.000.000 VND.
+ New regulation: fines ranging from 5.000.000 VND to 8.000.000 VND.
5. Late submission of tax returns beyond the prescribed deadline (Article 13)
– Increase the fines for violations of tax return filing deadlines:
+ Current penalty: a fine of 400.000 VND to 5.000.000 VND.
+ New regulation: fines ranging from 2.000.000 VND to 25.000.000 VND.
– Changes to regulations regarding the deadline for late filing of tax returns:
Currently, violations regarding the deadline for submitting tax returns are categorized into six levels of late submission: "from 1 to 10 days"; "from over 10 days to 20 days"; "from over 20 days to 30 days"; "from over 30 days to 40 days"; "from over 40 days to 90 days"; and "over 90 days".
+ New regulations: violations regarding the deadline for submitting tax returns are divided into 4 levels of late payment: "from 01 to 30 days"; "from 31 to 60 days"; "from 61 to 90 days"; and "over 90 days".
– Increase the fines for filing tax returns more than 90 days after filing but without any tax liability arising, and for failing to file tax returns at all.
+ Current penalty: a fine ranging from 2.000.000 VND to 5.000.000 VND.
+ New regulation: fines ranging from 8.000.000 VND to 15.000.000 VND.
– Add penalties for the act of "failing to submit the required appendices on tax management for enterprises with related-party transactions along with the corporate income tax return".
– New regulations on penalties for violations "The act of filing tax returns more than 90 days after the deadline, with tax payable arising, and the taxpayer having paid the full amount of tax and late payment penalties to the state budget before the tax authority announces a tax audit or inspection decision, or before the tax authority draws up a report on the act of late filing of tax returns." with the highest fine ranging from VND 15.000.000 to VND 25.000.000. If the fine exceeds the tax payable as stated in the tax return, the maximum fine for this offense shall be equal to the tax payable as stated in the tax return, but not lower than the average of the fine range stipulated in Clause 4, Article 13 (from VND 8.000.000 to VND 15.000.000).
6. Violations of regulations concerning the provision of information related to determining tax obligations (Article 14)
– Increase the fines for violations of regulations regarding the provision of information related to determining tax obligations:
+ Current penalty: a fine ranging from 400.000 VND to 2.000.000 VND.
+ New regulation: fines ranging from 2.000.000 VND to 5.000.000 VND.
7. Violations of regulations concerning compliance with tax inspection and audit decisions, and enforcement of administrative tax decisions (Article 15)
– Increase the fines for violations of regulations regarding compliance with tax inspection and audit decisions, and enforcement of administrative tax decisions.
+ Current penalty: a fine ranging from 800.000 VND to 5.000.000 VND.
+ New regulation: fines ranging from 2.000.000 VND to 10.000.000 VND.
8. Tax evasion (Article 17)
– Remove the phrase “tax fraud”.
– Amend regulations on the amount of fines applied to organizations and individuals who commit tax evasion:
+ Current: Applying the principle that the fine for an individual is half the fine for an organization.
+ New rules: A uniform fine will be applied to both individuals and organizations.
– Amend the regulations regarding the number of times tax evasion can occur for tax evasion offenses:
|
Content |
Current |
New rules |
|
Triple penalty for tax evasion. |
First offense or second offense with two or more mitigating circumstances. |
Committing tax evasion and having one mitigating circumstance. |
|
Triple penalty for tax evasion. |
A first-time offense with aggravating circumstances or a second-time offense with mitigating circumstances. |
Committing tax evasion without any aggravating or mitigating circumstances. |
|
Triple penalty for tax evasion. |
A second offense without mitigating circumstances or a third offense with one mitigating circumstance. |
Committing tax evasion with an aggravating circumstance. |
|
Triple penalty for tax evasion. |
A second offense with an aggravating circumstance or a third offense without mitigating circumstances. |
Committing tax evasion and having two aggravating circumstances. |
|
Triple penalty for tax evasion. |
A second offense with two or more aggravating circumstances, a third offense with an aggravating circumstance, or a fourth or more offenses. |
Committing tax evasion and having three or more aggravating circumstances. |
– Additional remedial measures: requiring adjustment of losses and deductible input value-added tax amounts on tax records (if any).
Next are 3 important changes regarding administrative penalties for invoice violations.
1. The act of using invoices illegally, using invoices unlawfully (Article 28)
– Add clear regulations on the use of illegal invoices and the illegal use of invoices (Article 4).
Article 4. Acts of using illegal invoices and documents; illegal use of invoices and documents.
1. Using invoices and supporting documents in the following cases constitutes illegal use of invoices and supporting documents:
a) Fake invoices and documents;
b) Invoices and supporting documents that are not yet valid or have expired;
c) Invoices that are suspended from use during the period of enforcement through measures to suspend invoice usage, except in cases where their use is permitted according to a notice from the tax authority;
d) Electronic invoices that are not registered for use with the tax authorities;
e) Electronic invoices that do not yet have a tax authority code, in cases where electronic invoices with a tax authority code are to be used;
f) Invoices for goods and services with an issue date from the date the tax authority determines that the seller is not operating at the business address registered with the competent state authority;
g) Invoices and purchase documents for goods and services with a date of issuance before the date the issuer is determined to be no longer operating at the registered business address, or before the tax authority has notified the issuer that the issuer is no longer operating at the registered business address, but the tax authority, police, or other relevant agencies have concluded that the invoice or document is illegal.
2. Using invoices and supporting documents in the following cases constitutes illegal use of invoices and supporting documents:
a) Invoices and supporting documents that do not contain all the required information; invoices that have been altered or erased improperly;
b) Fictitious invoices and documents (invoices and documents that record economic transaction details and content, but the purchase or sale of goods or services is not real, either partially or entirely); invoices that do not accurately reflect the actual value of the transaction or the creation of fictitious or fake invoices;
c) Invoices with discrepancies in the value of goods or services, or inaccuracies in mandatory information between different copies of the invoice;
d) Invoices used for circulation when transporting goods in the distribution chain, or using invoices for one type of goods or service to prove the sale of another type of goods or service;
e) Invoices and supporting documents from other organizations or individuals (excluding invoices from tax authorities and cases where invoices are issued by authorized agents) to legitimize purchased goods and services or sold goods and services;
f) Invoices or documents that the tax authorities, the police, or other competent authorities have concluded were used illegally.
– Additional remedial measures: requiring the cancellation of invoices already used.
2. Violations of regulations regarding the preparation and submission of notices and reports on invoices (Article 29):
– Add a provision for a warning penalty for submitting notices and reports on invoices more than 01 to 05 days after the deadline, provided there are mitigating circumstances.
– Increase the fines for incorrectly or incompletely preparing notices and reports on invoices submitted to the tax authorities as required by regulations:
+ Current penalty: from 200.000 VND to 1.000.000 VND
+ New regulation: fines ranging from 1.000.000 VND to 3.000.000 VND.
– Additional penalties will be imposed for submitting notifications and reports on invoices more than 01 to 10 days after the prescribed deadline.
– Increase the fines for submitting notices and reports on invoices to the tax authorities more than 91 days after the deadline; and for failing to submit notices and reports on invoices to the tax authorities as required.
+ Current penalty: a fine ranging from 4.000.000 VND to 8.000.000 VND
+ New regulation: fines ranging from 5.000.000 VND to 15.000.000 VND.
3. Add violations of regulations on transferring electronic invoice data (Article 30)
1. A fine of VND 2.000.000 to VND 5.000.000 shall be imposed for the act of transferring electronic invoice data to the tax authority more than 01 to 05 working days after the deadline as prescribed.
2. A fine of between VND 5.000.000 and VND 8.000.000 for one of the following acts:
a) Transferring electronic invoice data to the tax authority more than 06 to 10 working days after the deadline as stipulated;
b) The summary table of electronic invoices does not include the full number of invoices issued during the period.
3. A fine of between VND 10.000.000 and VND 20.000.000 for one of the following acts:
a) Submitting electronic invoice data to the tax authority more than 11 working days after the deadline as stipulated;
b) Failure to transfer electronic invoice data to the tax authorities within the prescribed deadline.
4. Remedial measures: Mandatory transfer of electronic invoice data to the tax authority for the acts specified in point b, clause 2 and point b, clause 3 of this Article.
See more: Official document 4818/TCT-PC dated November 12, 2020 Introducing the new points of Decree 125/2020/ND-CP regulating administrative penalties for tax and invoice violations, issued by the General Department of Taxation.