What is considered tax evasion and tax fraud? Is tax evasion illegal? If yes, how will this behavior be penalized? To better understand the issue, let’s take a closer look at this issue through the following article “Is tax evasion and tax fraud sanctioned for administrative violations” by Lawyer X
Legal grounds
Law on Handling of Administrative Violations 2012
Tax Administration Law 2019
Decree 125/2020/ND-CP
Criminal Code 2015
What is tax evasion?
Tax evasion is an act of violating the tax policy of the State through the failure of the subject to fulfill or incompletely fulfill the tax payment obligation.
Besides, tax evasion is dangerous behavior for society; infringing upon the State’s economic management regime.
Tax evasion is the implementation of methods that not allowed by law to reduce the amount of tax payable; or not pay taxes.
For example, selling goods without issuing invoices to reduce revenue; or create false information such as buying invoices to increase costs for tax deduction; create fake documents for VAT refund, etc.
What is tax fraud?
Tax fraud is a law violation that always coexists with tax activities of the State.
Tax evasion and tax fraud are illegal acts. And how will that behavior be handled? Let’s find out with Lawyer X through the next part.
Tax evasion and tax fraud are common in Vietnam
- Here are some common tax evasion and tax frauds
- Leaving out the accounting books
- Create fake sales transactions
- Make a fake purchase
- Enter the selling price lower than the actual price
- Illegal accounting and tax declaration
- etc.
Cases of not being administratively sanctioned for tax evasion and tax fraud
Taxpayers showing signs of tax evasion but falling into one of the following cases shall not be subject to tax administrative penalties:
– In case of committing administrative violations in an urgent situation; by legitimate defense; due to unexpected events; due to a force majeure event or the case where the person performing the administrative violation does not have administrative responsibility capacity; those who commit administrative violations who are underage shall be administratively sanctioned.
– In case of false declaration, the taxpayer has additionally declared the tax declaration dossier; and have paid the full amount of tax payable; before the tax authority announces the tax inspection decision; tax inspection at the taxpayer’s headquarters; or before the time when the tax authorities discover that it has not been inspected; inspection at the taxpayer’s office or before the time of detection by another competent authority.
Thus, in some cases, tax evasion and tax fraud will not administratively sanction. In addition to the above cases, the acts of tax evasion; Other tax frauds are subject to administrative penalties.
Administrative penalties for tax evasion and tax fraud
Taxpayers who commit acts of tax evasion or tax fraud will be penalized according to the number of times calculated on the evaded tax amount and the fraudulent tax amount. Specifically:
– Firstly, a fine of 1 time calculated on the evaded tax amount, the fraudulent tax amount for the taxpayer who commits the first violation; or the second violation with two or more extenuating circumstances.
– Then, a fine of 1.5 times calculated on the amount of tax evaded for the taxpayer in the following cases: the first violation, there are aggravating circumstances; or the second violation, there is one extenuating circumstance.
– A fine of 2 times calculated on the evaded tax amount for the taxpayer in the following cases: the second violation without extenuating circumstances; or the third violation with one extenuating circumstance.
– A fine of 2.5 times calculated on the evaded tax amount for the taxpayer in the following cases: the second violation with an aggravating circumstance; or the third violation without extenuating circumstances
– A fine of 3 times calculated on the evaded tax amount for the taxpayer in the following cases: the second violation has two or more aggravating circumstances, or the third violation has aggravating circumstances or the fourth violation onward
In addition to fines, taxpayers if they have acts of tax evasion; and tax fraud also forced to apply the remedial measure of paying the evaded tax in full; fraud into the state budget.
How will tax evasion and tax fraud be handled?
For acts of tax evasion, tax fraud may sanction for tax administrative violations; or may also prosecute for criminal liability (imprisonment).
The amount of tax evasion or tax fraud is the amount of tax payable to the state budget according to the provisions of tax law that the taxpayer which detected by a competent authority; identified in minutes of administrative violations, minutes of inspection (inspection)
Related article:
Finalization and refund of personal income tax in Vietnam
Procedures to register for the latest personal tax code in Vietnam
Frequently asked questions
Contents of tax administration in accordance with the Law on Tax Administration include:
– Tax registration, tax declaration, tax payment, tax assessment.
– Tax refund, tax exemption and reduction procedures.
– Debt tax, fines.
– Manage information about taxpayers.
– Tax inspection, tax inspection.
– Coercive enforcement of tax administrative decisions
– Handling tax law violations.
– Settlement of tax complaints and denunciations.
Firstly, fraud related to invoices and vouchers.
Second, deduct VAT on goods and services that are not related to production and business activities.
Third, declare before the time of receipt of state budget payment documents.
Finally, fraud through the reduction of output VAT.
Contact information
Above is the advice of Lawyer X on the issue of “Is tax evasion and tax fraud not administratively sanctioned”. We hope that you can apply the knowledge above; for use in work and life. For more detailed information and to receive more advice and help when in need of issues related to company dissolution, one-member limited liability company; single certification, trademark registration, etc., of Lawyer X, please contact LSX Law firm: +84846175333 or Email: [email protected]
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