PENALTIES FOR ILLEGALLY USING INVOICES AND DOCUMENTS

In the context of a strong and complex economic development, compliance with regulations on invoices and documents is a prerequisite to ensure transparency and honesty in business operations. However, many enterprises and individuals still intentionally violate it by illegally using invoices and documents to avoid tax obligations or commit financial fraud. The provisions of the law on sanctioning administrative violations, what penalties these acts can incur, follow the article below.

Need to know about the principles of administrative sanctions for violations of illegally using invoices and documents

Administrative sanctions for violations of illegally using invoices and documents apply according to the principles of sanctioning administrative violations of taxes and invoices. Note:

– Organizations and individuals that commit many administrative violations will be sanctioned for each violation, unless the law stipulates exceptions for each specific case.

– For the same administrative violation of illegally using invoices and documents, the fine for organizations is as 2 times as the fine for individuals, unless specifically prescribed.

Illegally using invoices and documents, depending on the behavior and severity of the violation, will result in administrative sanctions

i. For the act of illegally using invoices

Fine from VND20,000,000 to VND50,000,000 for individuals, VND40,000,000 to VND100,000,000 for organizations in the case of if illegally using invoices and documents as follows:

– Counterfeit invoices and evidencing documents;

– Invoices and evidencing documents not yet valid or expired;

–  Invoices suspended during the period of enforcement of the invoice suspension penalty, except those permitted for use according to a tax authority’s notice;

– E-invoices which are not registered with any tax authority;

– E-invoices of which tax authority’s codes have not yet been granted if they are subject to the regulation under which e-invoices with tax authority’s codes are required;

– Invoices for purchase of goods or services with the invoicing date specified thereon which falls within the period from the date on which a tax authority determines that the seller is not doing business at the address registered with a competent regulatory authority;

– Invoices or evidencing documents for purchase of goods or services with the invoicing date before the date on which it is determined that the invoicing party are not doing business at the address registered with a competent regulatory authorities or, though the invoicing party’s notification of the closing of their business at the address already registered with the competent regulatory authority has not been sent to the tax authority, the tax authority or the police authority or other regulatory agency establishes that they are illegal.

Remedies: Compelling the cancellation of used invoices.

ii. For act of making false declaration that causes any deficiency in taxes payable or any increase in amounts of tax exemption, reduction or refund

The following acts of illegally using invoices and documents are identified as belonging to the group of act of making false declaration that causes any deficiency in taxes payable or any increase in amounts of tax exemption, reduction or refund: Using illegal invoices or evidencing documents for keeping accounting records of values of purchased goods or services to reduce taxes payable or increase amounts of tax refund, reduction or refund but, after the tax authority’s discovering this act through their tax inspection and examination, the buyer succeeds in proving that this act is performed through the seller’s fault and fully keeping accounts of these values in accordance with regulations.

In this case, 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. Note, the fine mentioned in item i above will not be applied.

Remedies:

– Compelling the full payment of underpaid or deficient taxes or higher-than-prescribed amounts of tax refund, exemption or reduction, or deferred taxes, into the state budget;

– Compelling the re-adjustment of losses, the carried-forward amounts of input VAT deductions (if any).

iii. For the act of tax evasion

Illegally using invoices and documents to reduce the amount of tax payable or increase the amount of tax refunded, the amount of tax exempted or reduced is determined to be an act of tax evasion.

Depending on the level of violation, a fine can be imposed equivalent to 1 to 3 times the amount of tax evaded by the taxpayer. Note, the fine mentioned in item i above will not be applied.

Remedies:

– Compelling the full payment of evaded taxes into the state budget;

– Compelling the re-adjustment of losses, the amounts of input VAT deductions specified in tax dossiers (if any).

Illegally using invoices and documents may result in criminal prosecution

Subjects with act of illegally using invoices and documents for tax evasion purposes may be subject to criminal liability according to the provisions of Criminal law.

>> DEDUCTIBLE EXPENDITURES IN CORPORATE TAXABLE INCOME https://linconlaw.vn/deductible-expenditures-in-corporate-taxable-income/

>> PROCEDURES OF PERSONAL INCOME TAX REFUND https://linconlaw.vn/procedures-of-personal-income-tax-refund/