Criminal liability for evading social insurance contributions is stipulated in Article 216 of the 2015 Penal Code (amended and supplemented in 2017). The following article provides important information for individuals, business households, and enterprises that employ workers or are obligated to participate in mandatory social insurance according to the law.
Criminal liability for evading social insurance contributions is stipulated in Article 216 of the 2015 Penal Code, as amended in 2017, which defines the crime of evading social insurance, health insurance, and unemployment insurance contributions for employees.
Penalties for evading mandatory social insurance contributions for employees include fines and imprisonment. Depending on the specific circumstances, as stipulated in Clauses 1 to 5 of Article 216 of the 2015 Penal Code, the penalties will vary.
1. The crime of evading social insurance, health insurance, and unemployment insurance contributions for employees.Article 216)
1. Any person who is obligated to pay social insurance, health insurance, and unemployment insurance for employees but fraudulently or by other means fails to pay or fails to pay in full as prescribed for 06 months or more, in one of the following cases, and who has been administratively penalized for this act but continues to violate the law, shall be fined from VND 50.000.000 to VND 200.000.000, sentenced to non-custodial correctional labor for up to 01 year, or imprisoned from 03 months to 01 year:
a) Evading insurance contributions ranging from VND 50.000.000 to less than VND 300.000.000;
b) Evading insurance contributions for 10 to fewer than 50 employees.
2. Committing an offense falling under one of the following circumstances shall be punishable by a fine of VND 200.000.000 to VND 500.000.000 or imprisonment from 06 months to 03 years:
a) Committing the crime two or more times;
b) Evading insurance contributions ranging from VND 300.000.000 to less than VND 1.000.000.000;
c) Evading insurance contributions for 50 to fewer than 200 employees;
d) Failure to pay the insurance contributions collected or deducted from employees as stipulated in point a or point b of Clause 1 of this Article.
3. Committing an offense falling under one of the following circumstances shall be punishable by a fine of VND 500.000.000 to VND 1.000.000.000 or imprisonment from 02 to 07 years:
a) Evading insurance contributions of VND 1.000.000.000 or more;
b) Evading insurance contributions for 200 or more employees;
c) Failure to pay the insurance contributions collected or deducted from employees as stipulated in point b or point c of Clause 2 of this Article.
4. The offenders may also be subject to a fine of between VND 180,000 and VND 200, banned from holding certain posts, practicing certain occupations or doing certain jobs from 20.000.000 years to 100.000.000 years.
5. If a commercial legal entity commits the offense prescribed in this Article, it shall be fined as follows:
a) If the offense falls under the circumstances specified in Clause 1 of this Article, the penalty shall be a fine of VND 200.000.000 to VND 500.000.000;
b) If the offense falls under the circumstances specified in Clause 2 of this Article, the penalty shall be a fine of VND 500.000.000 to VND 1.000.000.000;
c) If the offense falls under the circumstances stipulated in Clause 3 of this Article, the penalty shall be a fine of VND 1.000.000.000 to VND 3.000.000.000.”
2. Administrative penalties of up to 75 million VND will be imposed if the act of tax evasion does not reach the level of criminal prosecution.
In addition, depending on the nature and severity of the violation, organizations and individuals committing administrative violations may be subject to a warning or a fine if the violation does not reach the level of criminal prosecution.
+ A fine of 12% to 15% of the total amount of mandatory social insurance and unemployment insurance contributions due at the time of the administrative violation report, but not exceeding 75 million VND, will be imposed on employers who commit one of the following acts: Late payment of mandatory social insurance and unemployment insurance contributions; Payment of social insurance and unemployment insurance contributions at an incorrect rate without evasion; Payment of social insurance and unemployment insurance contributions for an insufficient number of employees subject to mandatory social insurance and unemployment insurance without evasion.
+ A fine of 18% to 20% of the total amount of mandatory social insurance and unemployment insurance contributions due at the time of the administrative violation report, but not exceeding 75 million VND, will be imposed on employers who fail to pay mandatory social insurance and unemployment insurance contributions for all employees subject to mandatory social insurance and unemployment insurance participation, provided the violation does not warrant criminal prosecution.
Responsibilities of directors, business owners, and household business owners.
It can be seen that the subjects affected by this Law are "those who have the obligation to pay social insurance for employees" – directors, business owners, and household business owners should pay attention to this regulation.