Decree No. 22/CP on administrative penalties for violations in the field of taxation

DECREE

On Administrative Sanctions for Violations in the Field of Taxation

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THE GOVERNMENT

Pursuant to the Law on the Organization of the Government dated September 30, 1992;

Pursuant to the Tax Laws, Tax Ordinances, and current regulations on State budget revenues;

Pursuant to the Administrative Offense Handling Ordinance dated July 6, 1995;

At the proposal of the Minister of Finance,

 DECREE:

PART I
VIOLATIONS AND FORMS OF SANCTION

ADMINISTRATIVE PENALTIES IN THE FIELD OF TAXATION

Article 1.The administrative violations in the field of taxation referred to in this Decree are those violations of the provisions of the Tax Laws, Tax Ordinances; the provisions on issuing purchase and sale documents, opening and recording accounting books; the provisions on other State budget revenues currently subject to administrative sanctions but not reaching the level of criminal prosecution.

Article 2.The level of administrative sanction for violations of the provisions on procedures for tax declaration registration, opening accounting books, issuance, use, and retention of documents related to tax calculation and payment:

1\. Warning or a fine from 20,000 (twenty thousand) dong to 200,000 (two hundred thousand) dong, with aggravating circumstances, may be fined up to 1,000,000 (one million) dong for one of the following violations:

a\. Submitting tax registration declarations to the tax authority later than the prescribed deadline;

b\. Failing to fill out all required items in tax submission forms or accounting documents provided to the tax authority;

c\. Not fully implementing the state regulations on the issuance, management, and retention of sales invoices.

2\. A fine from 100,000 (one hundred thousand) dong to 1,000,000 (one million) dong, with aggravating circumstances, may be fined up to 10,000,000 (ten million) dong for one of the following violations:

a\. Failing to present accounting books and documents upon request of the tax authority;

b\. Transporting goods without accompanying tax documents as required by law;

c\. Failing to submit tax declarations to the tax authority within the prescribed time limit.

3\. A fine from 1,000,000 (one million) dong to 10,000,000 (ten million) dong, with aggravating circumstances, may be fined up to 20,000,000 (twenty million) dong for one of the following violations:

a\. Selling goods without issuing an invoice to the customer as required by state regulations;

b\. After being notified twice by the tax authority, still intentionally failing to submit tax declarations, accounting reports, and other documents to the tax authority as required by law;

c\. Destroying accounting records, reports, and books before the end of their retention period as stipulated by state regulations;

d\. Using invoices and receipts that have not been issued by the Ministry of Finance or are not permitted for use;

e\. Losing invoices without promptly reporting to the responsible authority or allowing others to misuse invoices for illegal business activities and tax evasion.

Article 3.The level of administrative sanction for false declarations and tax evasion:

Organizations and individuals who commit false declarations and tax evasion as defined in the Value Added Tax Law, Income Tax Law, Special Consumption Tax Law, Export and Import Tax Law, Agricultural Land Use Tax Law, Land Transfer Tax Law, in addition to paying the full amount of tax as prescribed, shall also be fined according to the provisions of each respective tax law.

In addition to the false declarations and tax evasion violations subject to administrative sanctions under the tax laws, organizations and individuals committing false declarations and tax evasion of other types of taxes must pay the full amount of tax as prescribed by law and shall be sanctioned according to the following levels, but the maximum fine shall not exceed 100,000,000 (one hundred million) dong:

1\. A fine equal to the amount of evaded tax, with aggravating circumstances, may be fined up to twice the amount of evaded tax for the following violations:

a\. Incorrectly declaring the basis for calculating tax as prescribed by each type of tax;

b\. Issuing accounting books, invoices, and documents that do not match actual production and business operations;

c\. Excluding accounting data from books or incorrectly recording them according to the current accounting system;

d\. Temporarily suspending business operations to obtain tax reductions or exemptions but continuing to operate.

If an organization or individual violates points a, b, c of Clause 1 of this Article and is discovered before the deadline for finalizing tax returns or paying the full tax, they will not be penalized for tax evasion but will be penalized according to the provisions of Clause 2, Article 2 of this Decree.

2\. A fine equal to twice the amount of evaded tax, with aggravating circumstances, may be fined three times the amount of evaded tax for the following violations:

a\. Goods transported without complete documentation proving tax payment or proper tax authority control as required by law;

b\. Engaging in business without registering for tax declaration and submitting tax declarations to the tax authority;

c\. Falsifying sales invoices, revenue receipts, tax receipts, and other documents related to tax calculation.

3\. In cases of large-scale tax evasion or repeated offenses after administrative penalties for tax evasion, the tax authority shall immediately transfer the case file to the competent criminal authority for handling.

Article 4.The level of administrative sanction for violations of the tax payment and fine payment system:

1\. A fine from 100,000 (one hundred thousand) dong to 1,000,000 (one million) dong, with aggravating circumstances, may be fined up to 10,000,000 (ten million) dong for the following violations:

a\. Refusing to accept tax collection notices, tax collection orders, penalty decisions, and violation handling decisions of the tax authority;

b\. Organizations entrusted with tax collection duties but failing to fulfill their responsibilities as prescribed by law;

c\. Delaying tax payments or fines as specified in tax collection notices or tax authority penalty decisions;

d\. Deliberately delaying tax payments and fines.

Organizations and individuals violating the tax payment and fine payment system, in addition to being fined according to the provisions of Clause 1 of this Article, must also pay late payment penalties as prescribed by the Tax Laws and Tax Ordinances.

Article 5.The level of administrative sanction for violations of the inspection and sealing system for goods:

A fine from 100,000 (one hundred thousand) dong to 1,000,000 (one million) dong, with aggravating circumstances, may be fined up to 10,000,000 (ten million) dong for the following violations:

a\. Failing to comply with tax authority inspections of goods in transit, warehouse inspections, and raw material inspections at production and business locations.

b) Arbitrarily breaking the seals on warehouses, raw material storage areas, machinery, factories sealed by authorized authorities within the sealing period to enforce compulsory measures for tax collection and fines.

Article 6. Provisions regarding the confiscation of evidence and means used to commit administrative violations in the field of taxation:

Organizations and individuals committing acts violating the provisions set out in point a, Section 2, Article 3 of this Decree may be subject to the confiscation of money, goods, evidence, and means directly related to the violation.

Confiscating goods, evidence, and means of violation can only be carried out against those types of goods, evidence, and means that the law permits confiscation.

PART II
AUTHORITY AND PROCEDURES FOR ADMINISTRATIVE SANCTIONS IN THE FIELD OF TAXATION

Article 7. Authority to impose administrative sanctions of the tax authority:

1- Tax officers performing their duties have the right to issue warnings and impose fines up to 100,000 (one hundred thousand) Vietnamese dong for administrative violations in the field of taxation within their jurisdiction.

The head of the tax station, the team leader of the tax team has the right to issue warnings and impose fines up to 200,000 (two hundred thousand) Vietnamese dong for administrative violations in the field of taxation within their jurisdiction.

2- The Director of the Tax Revenue Office has the right:

To issue warnings and impose fines up to 2,000,000 (two million) Vietnamese dong for administrative violations in the field of taxation as stipulated in Articles 2, 4, and 5 of this Decree within their jurisdiction.

To impose fines equal to the amount of evaded taxes for acts of false declaration and tax evasion as stipulated in Article 3 of this Decree.

To confiscate evidence and means used to commit administrative violations in the field of taxation with a value up to 10,000,000 (ten million) Vietnamese dong according to the provisions of Article 6 of this Decree.

3- The Director of the Provincial Tax Department has the right:

To issue warnings and impose fines up to 20,000,000 (twenty million) Vietnamese dong for administrative violations in the field of taxation as stipulated in Articles 2, 4, and 5 of this Decree within their jurisdiction.

To impose fines up to three times the amount of evaded taxes for acts of false declaration and tax evasion as stipulated in Article 3 of this Decree; specifically for export tax and import tax, fines up to five times the amount of evaded taxes.

Confiscate property and means used in tax administrative violations.

The Director of the Tax Revenue Office and the Director of the Provincial Tax Department have the right to issue decisions on administrative sanctions for acts violating the provisions of Clause 2, Article 4 of this Decree.

Article 8. Authority to impose administrative sanctions in the field of taxation of People's Committees at all levels:

1- The Chairman of the People's Committee of communes, wards, towns has the right to issue warnings and impose fines up to 200,000 (two hundred thousand) Vietnamese dong for violations concerning agricultural land use tax, house and land tax, slaughter tax within their jurisdiction, after obtaining the agreement of the same-level tax authority.

2- The Chairman of the People's Committee of districts, towns, counties, provincial cities, and the Chairman of the People's Committee of centrally governed cities have the authority to impose administrative sanctions as prescribed in Articles 27 and 28 of the Administrative Violations Handling Ordinance for administrative violations in the field of taxation upon the proposal of the same-level tax authority.

Article 9. The division of authority to impose administrative sanctions in the field of taxation is defined as follows:

If an administrative violation in the field of taxation falls under the authority to impose sanctions of multiple agencies, the agency that first handles the case shall carry out the sanction according to the provisions of this Decree, after obtaining the agreement of the same-level tax authority.

Article 10. The procedures for imposing administrative sanctions in the field of taxation must be carried out strictly in accordance with the provisions of Chapter VI of the Administrative Violations Handling Ordinance dated July 6, 1995.

Article 11. The enforcement of administrative sanction decisions in the field of taxation is defined as follows:

1- Organizations and individuals who are administratively sanctioned but do not voluntarily comply with the administrative sanction decision shall have the authority issuing the administrative sanction decision in the field of taxation the right to decide on enforcing the administrative sanction decision in the field of taxation through the following measures:

a) Deducting part of the salary or income, deducting money from the bank account. Organizations and individuals paying or banks where organizations and individuals being sanctioned have accounts have the responsibility to implement the tax authority's coercive decision;

b) Seizing goods or objects to ensure the full payment of taxes and fines;

c) Seizing assets equivalent in value to the fine and tax amount for auction.

2- The agency issuing the coercive decision has the duty to organize the enforcement of asset seizure for auction to ensure the full collection of taxes and fines. The handling of evidence and means used to commit administrative violations in the field of taxation is applied according to Article 52 of the Administrative Violations Handling Ordinance.

3- Police forces responsible for enforcing the coercive decision of the same-level People's Committee must cooperate with the tax authority to implement the tax authority's coercive decision.

4- Organizations and individuals subject to coercion must bear all costs associated with organizing the implementation of coercive measures and organizing auctions.

Article 12. The statute of limitations for administrative sanctions in the field of taxation is two years from the date the violation is discovered; during the statute of limitations, if the individual or organization commits new violations or deliberately avoids or obstructs the imposition of sanctions, the above statute of limitations does not apply. Specifically, for false declaration and tax evasion as stipulated in Article 3 of this Decree, the statute of limitations for sanctions is three years from the date the violation is discovered.

CHAPTER III
PETITIONING, REPORTING AND HANDLING VIOLATIONS

Article 13. Provisions on complaints and denunciations:

Complaints about administrative sanction decisions, procedures for resolving complaints about administrative sanction decisions in the field of taxation, and procedures for resolving denunciations of violations in the field of taxation are implemented according to Articles 87, 88, and 90 of the Administrative Violations Handling Ordinance dated July 6, 1995.

Article 14. Provisions on handling violations:

Imposing penalties on persons authorized to impose administrative sanctions in the field of taxation and imposing penalties on persons committing administrative violations in the field of taxation are carried out strictly according to Articles 91 and 92 of the Administrative Violations Handling Ordinance dated July 6, 1995.

Article 15.Provisions on rewards for the detection and handling of violations: organizations and individuals who have contributed to the discovery of false declarations and tax evasion shall be entitled to a reward based on the amount of evaded taxes discovered following the entry into force of the penalty decision or the complaint resolution decision. The reward percentage is as follows:

Two percent (2%) for cases of tax evasion detected in state-owned economic sectors.

Five percent (5%) for cases of tax evasion detected in non-state-owned economic sectors.

The Ministry of Finance shall provide guidance on the procedures for awarding rewards and the principles governing the distribution and use of the aforementioned reward funds.

The remaining amount of evaded taxes after the reward has been deducted must be fully remitted to the state budget.

PART IV
IMPLEMENTING PROVISIONS

Article 16.This Decree takes effect from May 1, 1996. The Government Decree No. 01/CP dated October 18, 1992, concerning administrative penalties for violations in the field of taxation, is hereby repealed.

Article 17.The Minister of Finance shall issue detailed guidelines for the implementation of this Decree.

Ministers, Heads of ministerial-level agencies, Heads of government-affiliated agencies, Chairpersons of provincial People's Committees under central cities are responsible for implementing this Decree./.