Circular No. 30/2001/TT-BTC amends and supplements Circular No. 128/98/TT-BTC dated September 22, 1998 of the Ministry of Finance guiding the implementation of Decree No. 22/CP dated April 17, 1996 of the Government on administrative penalties in the field of taxation.

CIRCULAR

Amending and supplementing Circular No. 128/1998/TT-BTC dated September 22, 1998, of the Ministry of Finance guiding the implementation of Decree No. 22/CP dated April 17, 1996, of the Government on administrative penalties for violations in the field of taxation.

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Based on the provisions of the Tax Laws, Tax Ordinances, and laws on other revenue contributions to the State budget.

After the implementation period of Government Decree No. 22/CP dated April 17, 1996, regarding administrative penalties for violations in the field of taxation, to address difficulties and obstacles encountered during the implementation process, the Ministry of Finance guides the amendment and supplementation of certain points of Circular No. 128/1998/TT-BTC dated September 22, 1998, of the Ministry of Finance (hereinafter referred to as Circular No. 128/1998/TT-BTC) as follows:

I. Replacing Point 1, Section II of Circular No. 128/1998/TT-BTC with new Point 1 as follows:

1. The level of penalty for violations concerning tax registration procedures, tax declaration procedures, and violations of invoice and supporting document systems for tax calculation and payment for goods transported on the road.

1.1. For the first violation, a warning shall be issued; if there is a second violation, a fine from VND 20,000 to VND 200,000 shall be imposed; if there are aggravating circumstances, a fine up to VND 1,000,000 may be imposed for any of the following acts:

a. Registering tax payments and tax identification numbers (including cases where supplementary registration must be made each time there is a change) with the tax authority beyond the prescribed deadlines in current guidance documents implementing tax laws.

b. Declaring incorrectly or incompletely the items specified in the tax declaration form.

1.2. A fine from VND 100,000 to VND 1,000,000 for the first violation; if there is a second violation, a fine from VND 2,000,000 to VND 4,000,000 shall be imposed; if there is one aggravating circumstance, a fine up to VND 6,000,000 may be imposed; if there are two or more aggravating circumstances, a fine up to VND 10,000,000 may be imposed for any of the following acts:

a. Not submitting the tax declaration form to the tax collection agency within the deadline stipulated in current guidance documents implementing tax laws.

b. Transporting goods without accompanying documents proving tax calculation, tax payment, and the origin of the goods as required for each type of business (purchase records, import declarations, valid documents and papers).

1.3. A fine from VND 1,000,000 to VND 10,000,000 for the first violation; if there is a second violation, a fine up to VND 13,000,000 shall be imposed; if there are aggravating circumstances, a fine up to VND 20,000,000 may be imposed for the act of not submitting tax declarations and related documents to the tax collection agency as required by law. Aggravating circumstances in this case also include delaying or failing to comply with the tax authority's notification, specifically: after the deadline for submitting the relevant documents has passed, the tax collection agency sends the first notification to the taxpayer. If the taxpayer does not submit the documents within ten days from the date of the first notification, the tax collection agency sends a second notification. If the taxpayer still fails to submit the documents within ten days from the date of the second notification, this act will be considered as having aggravating circumstances.

II. Replacing Point 2, Section II of Circular No. 128/1998/TT-BTC with new Point 2 as follows:

2. Acts of false declaration and tax evasion.

False declaration and tax evasion are acts of taxpayers violating legal regulations leading to a reduction in part or all of the taxes stipulated by law or to improperly benefitting from tax exemptions, reductions, or refunds.

The criteria for determining acts of false declaration and tax evasion are:

+ False declaration and tax evasion are acts of violating the law, including both tax laws and other laws.

+ The subject of false declaration and tax evasion acts are individuals or organizations that are taxpayers.

+ The consequences of such violations lead to a reduction in the amount of tax payable or an increase in the amount of tax exempted, reduced, or refunded.

The time point for identifying false declaration and tax evasion acts is when the violation is discovered, consistent with the declaration, payment, and settlement deadlines stipulated by the Tax Laws, Tax Ordinances, and implementing guidance documents, specifically as follows:

+ In cases where the law provides for monthly declaration and provisional payment, annual settlement: it is determined as false declaration and tax evasion if the violation is discovered after the annual tax settlement deadline.

+ In cases where the law provides for one-time declaration and payment according to the tax authority's notice: it is determined as false declaration and tax evasion if the violation is discovered after the deadline for paying the full tax amount stated in the tax authority's notice.

Organizations and individuals engaging in false declaration and tax evasion, in addition to paying the full amount due to false declaration and tax evasion, shall also be fined according to the number of times based on the amount of tax evaded, but the maximum fine shall not exceed VND 100,000,000:

2.1. A fine equal to the amount of tax evaded; if there are aggravating circumstances (except in cases where the act of false declaration and tax evasion has already been penalized and the violation continues), a fine up to twice the amount of tax evaded may be imposed for any of the following acts:

a. Incorrectly declaring the taxable object, basis for calculating tax according to the provisions of each type of tax, including:

- Incorrectly declaring the source, purpose of use, type, quantity, specifications, actual condition of goods and services, tax code, taxable value, tax rate;

- Incorrectly declaring the object, item, type of business, operating area to evade reporting income eligible for tax exemption, reduction, or to under-report revenue or declare non-existent actual expenses to reduce taxable income;

- Failing to settle accounts or re-declare to the tax authority about goods, services, or income that have been exempted, reduced, or refunded but are actually used for purposes requiring additional tax payment.

b. Engaging in accounting violations leading to false declaration and tax evasion, including:

- Using invoices and accounting documents not in accordance with the regulations of the Ministry of Finance or not approved by the competent authority, including fraudulent economic content on invoices and documents; using fake invoices or expired invoices; using self-printed invoice templates not approved by the Ministry of Finance.

- Selling goods or services without issuing invoices or other documents (except where not required to issue invoices under prescribed regulations), failing to record sales in accounting books, and failing to include such sales in declared revenue for tax purposes.

- Purchasing or selling invoices in violation of regulations and exploiting such invoices to falsely inflate expenses that did not actually occur, thereby reducing corporate income tax payable or committing fraud to increase the amount of deductible tax or refundable tax.

- Losing invoices or accounting records but failing to promptly report this to the tax authority and relevant agencies as prescribed by the State, and exploiting the loss of invoices or records to evade taxes or collude with others to evade taxes.

For violations mentioned in points a and b above, if discovered before the deadline for submitting final tax returns or paying taxes as prescribed by law, penalties based on the number of times the amount of evaded tax is calculated shall not be applied; instead, penalties as stipulated in Clause 2, Article 2 of Decree No. 22/CP dated April 17, 1996 shall apply.

c. Requesting temporary suspension of business operations to be exempted from tax, have tax reduced, or be exempted from tax payment, but continuing to operate in reality.

d. Collecting overdue taxes and imposing fines according to administrative sanctions in the field of accounting for the following cases if it is the first violation:

- Recording or declaring revenue inaccurately between accounting periods, leading to incorrect taxable income which must be adjusted during tax return review.

- Expenses supported by valid documents but declared beyond the maximum allowable limit as prescribed by laws on corporate income tax must be excluded from reasonable costs to determine taxable income. For example, advertising, marketing promotion, hospitality, ceremonial expenses, transaction and external affairs expenses exceeding the maximum allowable ratio.

- Declaring in tax-deductible expenses items that are not allowed to be included in reasonable costs to determine taxable income as specified in detailed guiding documents implementing the Corporate Income Tax Law.

- Depreciation costs of fixed assets, pre-provisioning, reserves, and unallocated costs recorded inaccurately in reasonable costs due to accounting technical errors must be corrected during tax return review.

- Cases of tax payment under the assessed or quota method by the tax authority must be adjusted based on findings during tax review.

For violations mentioned in point d, if they occur from the second time onwards, they will be penalized for false declaration and tax evasion as guided in point 2.1 here.

2.2. Imposing a fine equal to twice the amount of evaded tax, if there are aggravating circumstances (except in cases where the entity has already been penalized for false declaration and tax evasion and still commits violations), then a fine up to three times the amount of evaded tax will be imposed for the following violation:

a. Goods transported without complete documentation proving that taxes have been paid or that the goods have been managed by the tax authority according to regulations applicable to each type of business.

The violation mentioned in this point will only be considered as false declaration and tax evasion if, within the maximum period of ten working days from the date the tax authority discovers doubts and allows the violator to collect complete legitimate documentation proving that the goods have been taxed (for purchased, sold, or exchanged goods) or managed by the tax authority (for goods transferred within the same unit), the violator still fails to present complete legitimate documentation.

If the violator presents complete legitimate documentation within the period allowed by the tax authority, the competent tax authority will issue a penalty decision according to the levels specified in Sub-item 1.2.b, Point 1, Section I of this Circular.

In cases where the owner of the goods does not comply with the tax authority's decision or exceeds the deadline of one day (one day) for fresh food products and five days (five days) for other goods from the date of the decision, the tax authority will transfer the detained goods to the financial agency at the same level or higher than district level to establish an auction committee to enforce tax collection.

b. Operating without registering for tax payment or declaring tax payments to the tax authority as prescribed by current tax-related regulatory documents (except for cases of late registration and declaration as specified in Sub-item 1.1.a and Sub-item 1.2.a, Point 1, Section I of this Circular).

c. False acts in accounting leading to false declaration and tax evasion, including:

- Falsifying accounting documents and ledgers; issuing fake documents; issuing documents inconsistent with actual economic transactions; forging signatures and seals; recording entries without supporting accounting documents; maintaining two different sets of accounting records.

- Misreporting figures and submitting false accounting reports; preparing financial statements inconsistent with accounting records or reality.

2.3. In cases where organizations or individuals commit violations as specified in Points 2.1 and 2.2 above, and the forms and levels of punishment for these violations are prescribed in Tax Laws, Tax Ordinances, and laws on other budget revenues, such forms and levels of punishment will be applied.

2.4. In cases where organizations or individuals commit a single violation of the law simultaneously prescribed in multiple regulatory documents, but the consequences lead to false declaration and tax evasion, in addition to being required to pay back all evaded taxes, they will also be punished for false declaration and tax evasion. It is strictly prohibited to switch to applying lower forms or levels of punishment.

Example: Company A falsifies an invoice to evade tax (to claim input tax deduction), and Company A's act does not involve aggravating circumstances. In this case, Company A must pay back the full amount of tax deducted, and be punished for false declaration and tax evasion based on the number of times the amount of evaded tax is calculated.

Company A shall not be subject to administrative penalties for violations in the field of accounting for the act of forging accounting vouchers in accordance with point 3, Section II of Circular No. 89/2000/TT-BTC dated August 28, 2000, issued by the Ministry of Finance guiding the implementation of Decree No. 49/1999/NĐ-CP of the Government on administrative penalties for violations in the field of accounting.

2.5. In cases of false declaration or tax evasion involving large amounts or where an entity has been administratively penalized for false declaration or tax evasion and continues to commit such violations or commits other serious violations, the tax collection agency shall transfer the case file to the People's Procuratorate at the same level to request criminal prosecution in accordance with the provisions of the law.

III. Amend and supplement some contents in point 1, Section III of Circular No. 128/1998/TT-BTC as follows:

1. Delete the content of item 1.1, point 1, Section III of Circular No. 128/1998/TT-BTC regarding the authority to impose administrative penalties for violations in the field of taxation of tax officials, station chiefs of tax stations, and team chiefs of tax teams.

2. Delete the paragraph: "Team chiefs of tax teams established under Circular No. 64 TC/TCCB dated October 29, 1992, of the Ministry of Finance also have the authority to impose administrative penalties for violations in the field of taxation as stipulated in Clause 1, Article 7 of Decree No. 22/CP dated April 17, 1996." in item 1.3, point 1, Section III of Circular No. 128/1998/TT-BTC.

3. Transfer items 1.2 and 1.3, point 1, Section III of Circular No. 128/1998/TT-BTC to become new items 1.1 and 1.2, and simultaneously add a new item 1.3 to point 1, Section III of Circular No. 128/1998/TT-BTC as follows:

"1.3. The division of authority to impose penalties for administrative violations in the field of accounting leading to false declarations or tax evasion shall be carried out as follows:

Organizations and individuals with the authority to impose administrative penalties for violations in the field of accounting or with the function of conducting inspections and audits, upon discovering violations in the field of accounting leading to false declarations or tax evasion as guided in Section II of this Circular, must transfer the case file to the local tax authority for handling according to the levels of penalties for false declarations or tax evasion."

IV. Implementation Organization:

This Circular takes effect fifteen days from the date of signature. Other guidelines in Circular No. 128/1998/TT-BTC dated September 22, 1998, of the Ministry of Finance that do not conflict with the guidelines in this Circular remain valid.

During the implementation period, if there are any difficulties, please report them to the Ministry of Finance for study and amendment.