Decree No. 100/2004/ND-CP on administrative penalties for violations in the field of taxation

DECREE

Provisions on administrative penalties for violations in the tax sector

THE GOVERNMENT

Pursuant to the Law on Organization of the Government dated December 25, 2001;
Based on various Tax Laws and Tax Ordinances;
Based on the Administrative Violation Handling Ordinance dated July 2, 2002;
At the proposal of the Minister of Finance,

DECREE

PART I

GENERAL PROVISIONS

Article 1. Scope and Applicability

This Decree stipulates the imposition of administrative penalties for violations in the tax sector against individuals, agencies, organizations (hereinafter collectively referred to as individuals, organizations) who intentionally or negligently violate tax laws that are not criminal offenses and must be subject to administrative penalties according to this Decree, except where international treaties to which Vietnam is a party provide otherwise. Administrative violations in the tax sector include:

1. Violations concerning tax registration; tax declaration; preparation and submission of final tax settlement declarations;

2. Violations concerning the collection and payment of taxes and fines;

3. Violations concerning tax inspection and audit;

4. Acts of tax evasion.

Article 2. Principles of administrative penalties in the tax sector

1. The principle of imposing administrative penalties in the tax sector shall be implemented in accordance with Article 3 of the Administrative Violation Handling Ordinance.

2. The specific amount of fine for a single administrative violation is the average level within the fine range prescribed for such violation. In cases where mitigating circumstances exist, the fine amount may be reduced but not below the minimum level of the fine range. In cases where aggravating circumstances exist, the fine amount may be increased but not beyond the maximum level of the fine range.

Article 3. Statute of Limitations for Administrative Penalties

1. The statute of limitations for administrative penalties in the tax sector is two years from the date the administrative violation was committed. For administrative violations in the tax sector identified as acts of tax evasion, the statute of limitations for administrative penalties shall be implemented in accordance with the relevant Tax Laws and Ordinances.

2. An individual who has been indicted, prosecuted, or had a decision made to bring them to trial under criminal procedure, but subsequently has a decision to terminate the investigation or close the case, and whose act has characteristics of an administrative violation in the tax sector, shall be subject to administrative penalty. Within three days from the date of issuance of the decision to terminate the investigation or close the case, the person issuing the decision must send the decision and case file to the authority authorized to impose penalties; in this case, the statute of limitations for administrative penalties is three months, starting from the date the authority authorized to impose penalties receives the decision to terminate the investigation and the case file.

3. During the period specified in Clause 1 and Clause 2 of this Article, if an individual or organization commits a new administrative violation in the tax sector or deliberately avoids or obstructs the imposition of penalties, the statute of limitations specified in Clause 1 and Clause 2 of this Article will not apply; the statute of limitations for administrative penalties will be recalculated from the date of committing the new administrative violation or the date when the act of avoiding or obstructing the imposition of penalties ceases.

4. If the authority responsible for imposing penalties exceeds the statute of limitations for administrative penalties, they will be handled according to Article 121 of the Administrative Violation Handling Ordinance.

Article 4. Time limit considered as not having been administratively penalized

Individuals or organizations subject to administrative penalties in the tax sector, if they have not reoffended within one year from the date of completion of the penalty decision or from the expiration date of the enforcement of the penalty decision, shall be considered as not having been subject to administrative penalties.

Article 5. Forms of administrative penalties in the tax sector

1. For each administrative violation, the violator must bear one of the following main forms of punishment:

a) Warning;

b) Fine.

2. Depending on the nature and degree of the violation, individuals or organizations that violate may also be subject to supplementary sanctions in the form of confiscation of items or means used in the administrative violation.

3. In addition to the forms of punishment prescribed in Clause 1 and Clause 2 of this Article, the violator may also be subject to one or more of the following measures to mitigate consequences:

a) Compel the destruction of invoices, accounting records, and other documents issued or distributed in violation of regulations;

b) Being temporarily suspended from using invoices due to non-compliance with the administrative penalty decision regarding taxes. The suspension period shall not exceed three months from the date the organization or individual fails to comply with the administrative penalty decision; if the violation is rectified earlier than three months, the suspension from using invoices will immediately cease upon completion of the rectification.

Article 6. Mitigating and aggravating circumstances when imposing administrative penalties in the tax sector

1. Mitigating circumstances shall be implemented in accordance with Article 8 of the Administrative Violation Handling Ordinance.

2. Aggravating circumstances shall be implemented in accordance with Article 9 of the Administrative Violation Handling Ordinance.

Article 7. Definitions

In this Decree, the following terms are understood as follows:

1. Tax evasion is the act of individuals or organizations violating tax laws that reduce the amount of tax payable or increase the amount of tax refund or exemption.

2. The amount of evaded tax is the additional tax amount discovered outside the declared figures on the tax return or final tax settlement declaration or outside the accounting records. The amount of tax evasion for administrative penalty consideration does not take into account tax incentives, nor is it offset against deductible tax amounts, refunded tax amounts, or losses of the taxpayer.

3. The time point for determining whether an individual or organization has committed tax evasion for administrative penalty purposes is the time point at which the individual or organization has completed the declaration of the tax payable according to the law on taxes or the time point at which the competent authority issues a decision to refund, exempt, or reduce tax based on the application submitted by the individual or organization.

4. Goods, raw materials, and materials referred to in this Decree are types of goods, raw materials, and materials not prohibited by law from being traded.

Circulating goods include: Goods, raw materials, and materials in transit, displayed for sale at sales locations, stored in warehouses, or located at production and business sites.

Chapter II

VIOLATIONS, FORMS, AND AMOUNTS OF PENALTIES

Article 8. Forms and levels of penalties for violations concerning tax registration procedures, tax declarations, and final tax settlement declarations

1. Warning or a fine of VND 50,000 to VND 100,000 for one of the following acts:

a) Registering taxes with the tax authority beyond the prescribed time limit of one to five working days, including situations requiring supplementary registration whenever there is a change;

b) Declaring inaccurately numerical data on the tax return form or attached settlement statement, or failing to fully complete the required items on the tax return form or final tax settlement declaration without causing a misstatement of the tax payable after adjustment or supplementary declaration in accordance with the law on taxes;

c) Submitting the tax declaration form late by more than one but not exceeding five working days from the prescribed deadline;

d) Submitting the final tax settlement declaration beyond the prescribed time limit of one to ten working days.

2. A fine of VND 200,000 to VND 1,000,000 for one of the following acts:

a) Registering taxes or submitting tax returns beyond the prescribed time limit of more than five to ten working days;

b) Submitting the tax settlement declaration beyond the prescribed time limit from more than 10 working days to 20 working days.

3. Imposing a fine of from VND 1,000,000 to VND 2,000,000 for one of the following acts:

a) Registering taxes, submitting tax declarations beyond the prescribed time limit from more than 10 working days, or having exceeded the prescribed time limit from more than 10 working days without registering taxes or submitting tax declarations;

b) Submitting the tax settlement declaration beyond the prescribed time limit from more than 20 working days to 30 working days.

4. Imposing a fine of from VND 2,000,000 to VND 4,000,000 for the act of submitting the tax settlement declaration beyond the prescribed time limit from more than 30 working days to 40 working days.

5. Imposing a fine of from VND 4,000,000 to VND 10,000,000 for the act of submitting the tax settlement declaration beyond the prescribed time limit from more than 40 working days to 90 working days.

6. Imposing a fine of from VND 15,000,000 to VND 25,000,000 for the act of submitting the tax settlement declaration beyond the prescribed time limit from more than 90 working days, or having exceeded the prescribed time limit from more than 90 working days without submitting the tax settlement declaration.

Article 9. Forms and levels of penalties for violations concerning the collection and payment of taxes and fines

1. Imposing penalties according to the laws on taxes for the act of paying taxes or fines late compared to the date specified in the tax payment notice or the administrative penalty decision. In cases where there is no tax notice, the period for calculating late payment penalties shall be based on the tax payment deadline stipulated in the Tax Laws and Tax Ordinances.

If the violator has been administratively penalized but still fails to pay the tax or fine as decided by the competent authority, they will be subject to the measure of temporarily suspending the use of invoices as provided for in point b, Clause 3, Article 5 of this Decree.

2. Imposing a fine of from VND 2,000,000 to VND 5,000,000 on organizations or individuals who pay salaries or income without deducting the amount of tax or fine owed by the person administratively penalized in the field of taxation; banks or other financial institutions where the person administratively penalized has an account and does not remit the state budget the amount of tax or fine according to the collection order or state budget deduction decision of the competent authority within 10 days from the date of receipt of such orders or decisions.

Article 10. Forms and levels of penalties for violations concerning inspection and audit of taxes

1. Imposing a fine of from VND 500,000 to VND 1,000,000 for the act of failing to comply with the inspection or audit decision of the competent authority, except in the cases provided for in Clause 3 of this Article.

2. Imposing a fine of from VND 1,000,000 to VND 2,000,000 for the act of being unable to provide accompanying documents for goods, raw materials, or materials being transported on the road to prove that the consignment has paid taxes or is under management for tax collection as stipulated by law within a maximum of 24 hours from the time of inspection or discovery.

The Ministry of Finance shall specify in detail how to determine the time limit and procedures for determining whether a consignment has paid taxes or is under management for tax collection.

3. Imposing a fine of from VND 2,000,000 to VND 3,000,000 for one of the following acts:

a) Refusing, delaying, or evading the provision of documents, vouchers, accounting books related to the determination of the tax payable from more than 5 working days from the date of receiving a written request from the competent authority or authorized person;

b) Not implementing the sealing order of the competent authority or sealing incorrectly the files, documents, vouchers, accounting books, safes, warehouses, raw material warehouses, machinery, and workshops.

4. Imposing a fine of from VND 4,000,000 to VND 10,000,000 for the act of arbitrarily removing, moving, or taking other actions that change the sealed condition of documents, vouchers, accounting books, and other files, safes, warehouses, raw material warehouses, machinery, and workshops.

Article 11. Forms and levels of penalties for tax evasion

Individuals or organizations committing tax evasion, in addition to paying the full amount of tax as prescribed, shall also be fined according to the number of times calculated based on the amount of tax evaded. The level of fine according to the number of times the tax is evaded for each violation shall not exceed VND 100,000,000, except in cases where the Tax Laws provide otherwise.

1. Imposing a fine of from one to two times the amount of tax evaded for one of the following acts:

a) Keeping outside the accounting records accounting data or accounting entries that do not comply with the accounting regulations, thereby reducing the tax payable or increasing the tax refund or exemption;

b) Altering, erasing, or tampering with accounting vouchers or accounting books to reduce the amount of tax payable or increase the amount of tax refundable or exempted or reduced;

c) Processing false procedures for the cancellation of materials, goods, or reducing their quantity or value contrary to actual conditions, thereby reducing the amount of tax payable or increasing the amount of tax refundable or exempted or reduced;

d) Selling goods or providing services with an invoice issued to the customer on the delivery copy larger than the retained copy in terms of quantity and value;

đ) Selling goods or providing services with an invoice recorded at a value lower than 20% (twenty percent) or more compared to the average selling price of similar goods or services in the local market where the sale takes place, except in the following cases:

- Selling low-quality fresh products;

- Selling goods from inventory due to reduced quality, outdated appearance, or unsuitable for consumer preferences;

- Selling agricultural products or foodstuffs during the harvest season;

- Selling goods or assets for promotional purposes as provided by law;

- Selling goods or assets in cases of bankruptcy, dissolution, cessation of business operations, or changes in production and business direction.

e) Using fake invoices, expired invoices, or invoices from other individuals or organizations to sell goods or provide services without fully declaring the tax payable;

g) Declaring or determining incorrectly the bases for calculating tax as prescribed, thereby reducing the tax payable or increasing the tax refund or exemption;

h) Circulating goods, raw materials, or materials without accompanying documents to prove that the consignment has paid taxes or is under tax management as prescribed by law, except in the cases provided for in Clause 2, Article 10 of this Decree;

i) Failing to declare taxes or withholding tax declarations as required for contractors or subcontractors;

k) Other acts not specified in this Article that reduce the tax payable or increase the tax refund or exemption.

2. Imposing a fine of from two to three times the amount of tax evaded for one of the following acts:

a) Selling goods or providing services without issuing an invoice and fully declaring taxes.

b) Reporting the cancellation of issued invoices for goods and services supplied to customers with the purpose of reducing the amount of tax payable or increasing the amount of tax refundable or exempted.

3. A fine from three times to five times the amount of evaded tax shall be imposed on any of the following acts:

a) Using blank invoices or other blank accounting vouchers with the aim of reducing the amount of tax payable or increasing the amount of tax refundable or exempted or reduced;

b) Destroying accounting vouchers or accounting books with the aim of reducing the amount of tax payable or increasing the amount of tax refundable or exempted or reduced;

c) Maintaining two different accounting systems with the aim of reducing the amount of tax payable or increasing the amount of tax refundable or exempted or reduced;

d) Engaging in business without registering for tax declaration.

4. Individuals and organizations that use fictitious invoices shall, in addition to being punished according to the provisions of point a, Clause 3, Article 3 of this Decree, also be subject to the remedial measures provided for in point b, Clause 3, Article 5 of this Decree.

5. The vouchers, invoices, accounting books which are the objects of administrative violations may be subject to the measures provided for in point a, Clause 3, Article 5 of this Decree.

6. Individuals and organizations that commit violations as stipulated in point a, point b, Clause 1, Article 3 of this Decree (except in cases of erasing, altering, or changing invoices) and point b, point c, Clause 3, Article 3 of this Decree (except in cases of canceling invoices) discovered before the time specified in Clause 3, Article 7 of this Decree shall not be punished for tax evasion under this Article but shall be punished for administrative violations in the field of accounting.

7. Individuals and organizations that commit violations as stipulated in point b (except in cases of erasing, altering, or changing other accounting vouchers or accounting books), point d, point đ, point e, Clause 1, Article 3 of this Decree; point a, point b, Clause 2, Article 3 of this Decree (except in cases of canceling other accounting vouchers or accounting books) and Clause 3, Article 3 of this Decree discovered before the time specified in Clause 3, Article 7 of this Decree shall not be punished for tax evasion under this Article but shall be punished according to the provisions of Decree No. 89/2002/NĐ-CP dated November 7, 2002 of the Government on printing, issuing, using, and managing invoices.

Chapter III

AUTHORITY TO ISSUE ADMINISTRATIVE VIOLATION DECISIONS AND VIOLATION RECORDS

Article 12. Competence to impose administrative penalties of the tax authority

Except where the Law on Taxation provides otherwise regarding the level of fines, the following persons have the right to impose administrative penalties in the field of taxation:

1. Tax officers performing their duties have the right to:

a) To issue warnings;

b) Imposing a fine up to VND 100,000.

2. The head of a Tax Station, the head of a Tax Team within the scope of their functions and tasks have the right to:

a) To issue warnings;

b) To impose a fine up to VND 2,000,000;

3. The Director of the Tax Revenue Office within their management area has the right to:

a) To issue warnings;

b) Impose fines up to 10,000,000 VND;

c) Confiscate the objects and means used to commit administrative violations;

d) Apply the remedial measures provided for in Clause 3, Article 5 of this Decree.

4. The Director of the Tax Revenue Department within their management area has the right to:

a) To issue warnings;

b) Impose a fine up to VND 100,000,000.

c) Confiscate the objects and means used to commit administrative violations;

d) Apply the remedial measures provided for in Clause 3, Article 5 of this Decree.

Article 13. Competence to impose administrative penalties of Customs

Except where the Law on Taxation provides otherwise regarding the level of fines, the following persons, according to their functions and tasks in managing tax collection on exported and imported goods, have the competence to impose administrative penalties in the field of taxation as follows:

1. The Head of the Customs Enforcement Team under the Customs Branch has the authority:

a) To issue warnings;

b) Impose a fine up to 500,000 VND.

2. The head of a Customs Branch, the head of a Control Team belonging to a Provincial or Municipal Customs Office (hereinafter referred to as the Customs Office), the head of a Control Team against smuggling and the head of a Sea Control Team belonging to the Anti-Smuggling Investigation Department under the General Department of Customs have the right to:

a) To issue warnings;

b) Impose fines up to 10,000,000 VND;

c) To confiscate contraband items or means of transportation used in administrative violations up to a value of VND 20,000,000.

3. The head of a Customs Branch directly managing tax collection has the right to:

a) To issue warnings;

b) To impose fines up to VND 20,000,000;

c) Confiscate the objects and means used to commit administrative violations;

d) Apply the remedial measures provided for in Clause 3, Article 5 of this Decree.

4. The Director of the Anti-Smuggling Investigation Department under the General Department of Customs has the right to:

a) To issue warnings;

ưb) Imposing a fine up to 100,000,000 dong;

c) Confiscate the objects and means used to commit administrative violations;

d) Applying the remedial measures provided for in point b, Clause 3, Article 5 of this Decree.

Article 14. The competence of the Chairmen of People's Committees at all levels to impose administrative penalties in the field of taxation shall be implemented according to Articles 28, 29, and 30 of the Administrative Violations Handling Ordinance.

Article 15. Delegation and division of competence to impose administrative penalties in the field of taxation.

The delegation to impose administrative penalties and the division of competence to impose administrative penalties in the field of taxation shall be carried out according to the provisions of Articles 41 and 42 of the Administrative Violations Handling Ordinance.

Chapter IV

PROCEDURES FOR IMPOSING ADMINISTRATIVE PENALTIES AND ENFORCEMENT

DECISION TO IMPOSE ADMINISTRATIVE PENALTY

Article 16. Simplified Procedure

In cases of warning or imposing a fine up to 100,000 dong, the procedures for imposing administrative penalties shall be carried out according to the provisions of Article 54 of the Administrative Violations Handling Ordinance.

Article 17. RECORDING THE VIOLATION OF ADMINISTRATIVE LAW

For administrative violations in the field of taxation not falling under simple penalty cases, a record of administrative violation must be made, except in cases of late payment of taxes and fines as prescribed by the Tax Laws.

The form, content, and procedure for making records of administrative violations in the field of taxation must comply with the provisions of Article 55 of the Administrative Violations Handling Ordinance. If the violator, representative of the organization, witness, victim, or representative of the victim refuses to sign, the person recording the violation must clearly state the reason in the record, and the individual or agency conducting the inspection or audit still implements the recommendations and decisions in the record and bears legal responsibility for those conclusions and recommendations.

Article 18. DECISION TO IMPOSE ADMINISTRATIVE PENALTY

The form, content, procedure, and process for issuing a decision to impose administrative penalties in the field of taxation must comply with the provisions of Article 56 of the Administrative Violations Handling Ordinance.

Article 19. Other contents regarding the procedures for imposing administrative penalties and enforcing decisions on administrative penalties in the field of taxation shall be carried out according to the provisions of Articles 57, 58, 60, 61, 62, 64, 65, and 68 of the Administrative Violations Handling Ordinance.

Article 20. The application and competence to apply measures to prevent administrative violations and ensure the handling of administrative violations in the field of taxation shall be carried out according to the provisions of Articles 43, 44, 45, 46, 47, 48, and 49 of the Administrative Violations Handling Ordinance.

Article 21. MEASURES TO ENFORCE DECISIONS ON ADMINISTRATIVE PENALTIES

After the deadline specified in Clause 1, Article 64 of the Administrative Violations Handling Ordinance, if individuals and organizations subject to administrative penalties in the field of taxation do not voluntarily comply with the decision to pay taxes or fines, the following compulsory measures shall be applied:

1. Deducting part of the salary or income, or withdrawing funds from the taxpayer's account at banks, credit institutions, or financial organizations to pay taxes or fines.

Organizations or individuals paying salaries or income, or banks, credit institutions, or financial organizations where the organizations or individuals subject to penalties have accounts, shall be responsible for implementing the compulsory measures decided by the competent authority.

In the case where the account of an individual or organization subject to a penalty does not have sufficient balance to pay taxes or fines, once the account has a balance, banks and other financial institutions must immediately deduct and remit to the state budget the outstanding tax and fine amounts before executing any other transfer orders from the penalized entity.

2. Seize goods and evidence to ensure the full collection of taxes and fines.

3. Attach assets or goods with equivalent value to the amount of tax and fine as decided in administrative violation penalties for auction.

4. The Customs Authority shall not process export or import procedures for subsequent shipments until all taxes and fines are paid.

Article 22. Authority to issue enforcement decisions

1. The following persons have the authority to issue enforcement decisions and are responsible for organizing the enforcement of their own administrative penalty decisions and those of subordinate authorities:

a) Director of the Tax Revenue Office;

b) Director of the Provincial Tax Service;

c) Director of the Customs Service directly managing tax collection;

d) The Director of the Anti-Smuggling Investigation Department under the General Administration of Customs;

đ) The Chairman of the People's Committee at the commune, district, or provincial level.

2. Other provisions regarding enforcement of administrative penalty decisions outside the contents stipulated in Clause 1 of this Article shall be implemented according to Article 66 of the Administrative Violation Handling Ordinance and other legal regulations on enforcement of administrative penalty decisions.

Article 23. Transfer case files indicating criminal offenses for criminal prosecution

1. When considering decisions to impose penalties for violations specified in Clause 4 of Article 10, Clause 1, Clause 2, and Clause 3 of Article 11 of this Decree, if it is determined that the violation indicates a criminal offense as defined in the Penal Code, the authorized person must immediately transfer the file to the competent criminal investigation agency.

It is strictly prohibited to retain cases of violations indicating criminal offenses for administrative penalties.

2. If a penalty decision has already been issued, and subsequently it is discovered that the violation indicates a criminal offense within the statute of limitations for criminal prosecution, the person who issued the penalty decision must revoke that decision and within three days from the date of revoking the penalty decision, transfer the violation case file to the competent criminal investigation agency.

3. The criminal investigation agency receiving the case file shall be responsible for informing the agency that transferred the file about the results of the handling.

Article 24. Time limit for enforcement of administrative penalty decisions

The time limit for enforcing administrative penalty decisions in the field of taxation is one year, starting from the date of issuance of the penalty decision; if the decision is not enforced beyond this period, it will no longer be enforced, but measures provided for in Point b, Clause 3 of Article 5 of this Decree may still be applied if such measures are recorded in the decision. In cases where individuals or organizations subject to penalties intentionally evade or delay, the aforementioned time limit will be recalculated from the end of such evasive or delaying actions.

Chapter V

PETITIONING, REPORTING, REWARDING AND HANDLING VIOLATIONS

Article 25. Petitioning and Reporting

Individuals or organizations subject to administrative penalties in the field of taxation or their lawful representatives have the right to appeal against the penalty decision, the decision to apply preventive measures, and the guarantee measures for handling administrative violations.

2. Citizens have the right to report illegal acts in the handling of administrative violations.

3. Competence, procedures, and deadlines for handling complaints and denunciations shall be implemented in accordance with the law on complaints and denunciations.

Article 26. Administrative litigation

Legal proceedings against administrative penalty decisions, decisions to apply preventive measures, and guarantee measures for handling administrative violations shall be carried out in accordance with the laws on administrative litigation procedures.

Article 27. Awards

Individuals or organizations that make significant contributions to combating administrative violations in the field of taxation shall be rewarded according to the general reward system of the State.

Article 28. Handling Violations

1. An individual subject to administrative penalties who commits acts of resisting public officials, delaying, evading compliance, or committing other violations shall be subject to administrative penalties or criminal prosecution depending on the nature and severity of the violation; if damage is caused, compensation must be made in accordance with the law.

2. An authorized person handling administrative violations who engages in harassment, tolerance, cover-up, non-enforcement, delayed or inappropriate enforcement, or enforcement beyond their authority, and who is negligent in allowing the statute of limitations or deadlines for handling administrative violations to expire shall be subject to disciplinary action or criminal prosecution depending on the nature and severity of the violation; if damage is caused, compensation must be made in accordance with the law.

Chapter VI

IMPLEMENTING PROVISIONS

Article 29. Effectiveness

1. This Decree shall take effect fifteen days after its publication in the Official Gazette.

2. Repeal Decree No. 22/CP dated April 17, 1996 of the Government on administrative penalties in the field of taxation.

3. Acts of administrative violations in the field of taxation prescribed in this Decree that were committed before the effective date of this Decree shall not be subject to the provisions of this Decree, except in cases where the forms and levels of penalties prescribed in this Decree are less severe than those prescribed in Decree No. 22/CP dated April 17, 1996 of the Government on administrative penalties in the field of taxation for the same violation.

Article 30. Guidance and Implementation

The Ministry of Finance shall guide and implement this Decree and coordinate with state agencies, political organizations, political-social organizations, social organizations, and occupational social organizations to promote education, mobilize the people to comply with, and supervise the implementation of this Decree.

Article 31. Responsibility for Implementation

Ministers, Heads of ministerial-level agencies, Heads of agencies under the Government, and Chairpersons of provincial and centrally-administered city People's Committees shall be responsible for implementing this Decree.