Circular 41/2004/TT-BTC guides the implementation of Government Decree No. 100/2004/ND-CP dated February 25, 2004, prescribing sanctions for administrative violations in the tax domain (content attached).

CIRCULAR

Guidelines for Implementing Decree No. 100/2004/NĐ-CP dated February 25, 2004 of the Government

concerning administrative penalties for violations in the field of taxation

__________________________

Pursuant to Ordinance on Handling Administrative Violations No. 44/2002/PL-UBTVQH10 dated July 2, 2002 of the Standing Committee of the National Assembly of the Socialist Republic of Vietnam;

Pursuant to Decree No. 100/2004/NĐ-CP dated February 25, 2004 of the Government stipulating administrative penalties for violations in the field of taxation;

Pursuant to Decree No. 134/2003/NĐ-CP dated November 14, 2003 of the Government detailing implementation of certain provisions of the Administrative Offense Handling Ordinance 2002;

Pursuant to Decree No. 77/2003/NĐ-CP dated July 1, 2003 of the Government stipulating the functions, tasks, powers, organizational structure of the Ministry of Finance;

The Ministry of Finance hereby provides specific guidelines as follows:

A. GENERAL PROVISIONS

I. SCOPE AND APPLICABLE SUBJECTS

Individuals, agencies, organizations within Vietnam and abroad (hereinafter referred to collectively as individuals, organizations) who intentionally or negligently violate tax laws without constituting criminal offenses shall be subject to administrative penalties in the field of taxation as prescribed in this Circular, except where international treaties to which Vietnam is a party provide otherwise.

Administrative violations in the field of taxation include:

a) Violations of regulations on tax registration, tax declaration, preparation and submission of final tax settlement reports;

b) Violations of regulations on collection and payment of taxes and fines;

c) Violations of regulations on tax inspection and audit;

d) Acts of tax evasion.

II. PRINCIPLES FOR ADMINISTRATIVE PENALTIES IN THE FIELD OF TAXATION

1. All administrative violations must be promptly detected and immediately halted. Administrative penalty proceedings must be conducted swiftly, fairly, and thoroughly; all consequences caused by administrative violations must be remedied in accordance with the provisions of the law.

2. Individuals and organizations shall only be subject to administrative penalties in the field of taxation when they commit violations as specified in Article 1 of Decree No. 100/2004/NĐ-CP dated February 25, 2004 and Section I, Part A of this Circular.

3. Administrative penalties must be imposed by persons authorized to do so in accordance with the provisions of the law.

4. A single administrative violation shall only be subject to one administrative sanction.

If multiple individuals jointly commit a single administrative violation, each violator shall be sanctioned.

When an individual commits multiple acts of administrative violation, penalties shall be imposed for each separate act of violation.

5. Administrative penalties must be based on the nature and degree of violation, the background of the violator, and mitigating or aggravating circumstances to determine appropriate forms and measures of punishment. The specific amount of fine for a single administrative violation is the midpoint of the fine range prescribed for that violation. In cases with mitigating circumstances, the fine may be reduced but not below the minimum fine range. In cases with aggravating circumstances, the fine may be increased but not above the maximum fine range.

6. Administrative penalties in the field of taxation shall not be imposed in the following cases:

a) When the time limit for imposing administrative penalties has expired as provided for in Point 1 and Point 2, Section III, Part A of this Circular;

b) Administrative violations indicating criminal offenses, including:

- Administrative violations in the field of taxation indicating criminal offenses that have been transferred to competent judicial authorities for resolution;

- Administrative violations in the field of taxation indicating criminal offenses that are currently under examination and resolution by judicial authorities;

- Administrative violations in the field of taxation indicating criminal offenses, where judicial authorities have issued a document requesting the transfer of files for criminal prosecution;

c) Administrative violations in the field of accounting and invoices but not yet at the time specified in Point 3, Section VI, Part A of this Circular;

d) Persons committing administrative violations while suffering from mental illness or other diseases that impair their ability to understand or control their actions;

đ) Administrative violations in situations of emergency, self-defense, or unforeseen events.

- Emergency situation refers to a situation where a person, to avoid an actual threat to the interests of the State, agencies, organizations, or legitimate rights and interests of themselves or others, has no other way but to cause a lesser harm than the harm to be prevented;

- Self-defense refers to the act of a person protecting the interests of the State, agencies, organizations, or legitimate rights and interests of themselves or others, by responding in a necessary manner to someone who is infringing upon such interests;

- A person performing an act due to an unforeseen event, meaning in a situation where it was impossible to foresee or was not required to foresee the consequences of the act;

III. TIME LIMITS FOR ADMINISTRATIVE PENALTIES AND PERIODS CONSIDERED AS NOT YET BEING SUBJECT TO ADMINISTRATIVE PENALTIES IN THE FIELD OF TAXATION

1. The time limit for administrative penalties in the field of taxation is two years, calculated from the date the administrative violation occurred to the date it was discovered. For acts of tax evasion identified as administrative violations in the field of taxation, the time limit for administrative penalties shall be implemented according to the relevant tax laws and ordinances.

2. Individuals who have been indicted, prosecuted, or had a decision made to bring them to trial under criminal procedure, but subsequently had a decision to terminate the investigation or close the case, where the act constitutes an administrative violation in the field of taxation, shall be subject to administrative penalties. Within three days of issuing the decision to terminate the investigation or close the case, the authority issuing the decision must send the decision and case file to the authority authorized to impose penalties. In this case, the time limit for administrative penalties is three months, calculated from the date the authority authorized to impose penalties receives the decision to terminate the investigation and the complete case file.

3. During the period for calculating the time limit for administrative penalties in the field of taxation, if an individual or organization commits a new administrative violation or deliberately evades or obstructs the imposition of penalties, the calculation method provided in Points 1 and 2 of this section shall not apply. In such cases, the time limit for administrative penalties shall be recalculated from the date of the new administrative violation or the date the evasion or obstruction ends.

4. The date of ending evasion or obstruction of the imposition of penalties is the date the party voluntarily appears before the tax authority to report and comply with the tax authority's penalty decision. The tax authority must record this in a written statement.

5. An individual or organization that has been administratively sanctioned for tax violations shall be deemed not to have been administratively sanctioned for tax violations if they do not reoffend within one year from the date of completion of the administrative sanction decision or from the date when the time limit for enforcement of the administrative sanction decision expires.

6. The person authorized to impose sanctions who allows the time limit for imposing administrative sanctions to lapse shall be subject to handling in accordance with Article 121 of the Administrative Violation Handling Ordinance and Point 4, Clause 3 of Decree No. 100/2004/NĐ-CP dated February 25, 2004 of the Government.

IV. FORMS OF SANCTIONS

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

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 main forms of sanctions and supplementary sanctions, individuals or organizations that violate may also be subject to the following measures to remedy consequences:

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

b) Temporarily suspend the use of invoices;

The temporary suspension of invoice usage can only be implemented when the taxpayer does not comply with the administrative sanction decision in the field of taxation. The maximum duration of the temporary suspension of invoice usage shall not exceed three months from the date the organization or individual fails to comply with the administrative sanction decision; if the violation is remedied before the end of three months, the temporary suspension of invoice usage will immediately cease upon completion of the remediation. If the taxpayer still fails to comply with the administrative sanction decision after the expiration of the three-month period, coercive enforcement measures will be applied.

V. MITIGATING CIRCUMSTANCES AND AGGRAVATING CIRCUMSTANCES

1. Mitigating circumstances

a) The violator has taken measures to prevent or reduce the harmful effects of the violation or voluntarily remedied the consequences and compensated for losses.

b) The violator has voluntarily reported the violation and sincerely expressed remorse.

c) The violation occurred under mental provocation caused by illegal acts of others;

d) The violation was committed under duress or dependency, either material or mental;

đ) The violator is a pregnant woman, elderly person, sick person, or disabled person whose capacity for understanding or controlling their actions is limited;

e) The violation occurred due to particularly difficult circumstances not caused by oneself;

g) The violation was committed due to backwardness in knowledge.

2. Aggravating circumstances

Only the following circumstances are considered aggravating circumstances:

a) Organized violation;

b) Committing multiple violations in the same field or committing repeated violations in the same field.

c) Inciting, enticing minors to commit violations, or forcing dependents to commit violations;

d) Committing violations while intoxicated from alcohol, beer, or other stimulants;

đ) Abusing positions or powers to commit violations;

e) Taking advantage of wartime conditions, natural disasters, or other special difficulties in society to commit violations;

g) Committing violations during the execution of criminal sentences or administrative penalty decisions;

h) Continuing to commit administrative violations despite requests from authorities to stop such acts;

i) After committing violations, taking actions to evade or conceal administrative violations.

VI. TERMINOLOGY EXPLANATION

1. Tax refers to revenues collected according to the provisions of the law, including taxes and other revenue sources, excluding fees and charges managed by tax authorities.

2. Tax evasion is the act of individuals or organizations violating tax laws leading to a reduction in the amount of tax payable or an increase in the amount of tax refunded or exempted. The criteria for determining tax evasion are as follows:

+ The subject of tax evasion is individuals or organizations that are taxpayers.

+ The consequence of the violation is a reduction in the amount of tax payable or an increase in the amount of tax refunded or exempted.

3. The time point at which an individual or organization completes the act of tax evasion for the purpose of penalizing tax evasion is the time point at which the individual or organization has completed the declaration of the tax payable according to the law on taxation or the time point at which the competent authority issues a decision to refund, exempt, or reduce tax (if applicable) based on the application submitted by the individual or organization, specifically as follows:

a) For cases where the law stipulates a monthly declaration and provisional payment system with annual settlement, the time point at which the individual or organization completes the annual tax settlement declaration as prescribed by the law on taxation is the time point of completing the declaration of the tax payable;

b) For cases where the law stipulates a single declaration and payment, the time point at which the individual or organization completes the declaration of the tax payable as prescribed by the law on taxation is the time point of completing the declaration;

c) For cases of tax refunds, exemptions, or reductions, the time point is when the tax refund, exemption, or reduction decision of the competent tax authority becomes effective or when the individual or organization completes the declaration of tax exemption or reduction of corporate income tax as prescribed by the law;

d) For cases where the law on taxation permits taxpayers to adjust or supplement tax declarations, annual settlements, or declarations of tax exemption or reduction of corporate income tax, the time point at which an individual or organization completes the act of tax evasion is the time point at which the individual or organization completes the adjustment or supplementation of the tax declaration, annual settlement, or declaration of tax exemption or reduction of corporate income tax.

5. Goods, raw materials, and materials referred to in this Circular 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; goods, raw materials, and materials displayed for sale at sales locations; goods, raw materials, and materials in warehouses or goods, raw materials, and materials at production and business premises.

6. Failure to register for tax is a situation where the tax registration exceeds ten working days or remains uncompleted even after ten working days.

7. Failure to submit a tax declaration is a situation where the submission of a tax declaration exceeds ten working days or remains unsubmitted even after ten working days.

8. Failure to submit a tax settlement is a situation where the submission of a tax settlement exceeds ninety working days or remains unsubmitted even after ninety working days.

B. VIOLATIONS, FORMS, AND AMOUNTS OF SANCTIONS

Based on the provisions of Articles 8, 9, 10, and 11 of Chapter II of Decree No. 100/2004/NĐ-CP dated February 25, 2004 of the Government, the administrative violations in the field of taxation, forms, and specific amounts of sanctions are as follows:

I. FORMS AND AMOUNTS OF SANCTIONS FOR VIOLATIONS OF TAX REGISTRATION PROCEDURES, TAX DECLARATION, AND SUBMISSION OF TAX SETTLEMENTS

For one of the following acts:

a) Registering for tax with the tax authority beyond the prescribed deadline of one to five working days, including cases where supplementary registration is required whenever there is a change.

b) Filing inaccurate numerical information on the tax declaration form, final settlement form, or failing to fully complete the required fields on the tax declaration form, final settlement form without causing an underpayment of tax after the adjustment period or supplementary filing as prescribed by tax laws;

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 settlement form late by more than one but not exceeding ten working days from the prescribed deadline.

The warning penalty form shall only be applied to first-time violations. A warning must be decided in writing.

For one of the following acts:

a) Registering taxes, submitting the tax declaration form late by more than five but not exceeding ten working days from the prescribed deadline;

b) Submitting the final settlement form late by more than ten but not exceeding twenty working days from the prescribed deadline.

For one of the following acts:

a) Registering taxes, submitting the tax declaration form late by more than ten working days from the prescribed deadline or failing to register taxes, submit the tax declaration form within ten working days from the prescribed deadline;

b) Submitting the final settlement form late by more than twenty but not exceeding thirty working days from the prescribed deadline.

For the act of submitting the final settlement form late by more than thirty but not exceeding forty working days from the prescribed deadline.

For the act of submitting the final settlement form late by more than forty but not exceeding ninety working days from the prescribed deadline.

For the act of submitting the final settlement form late by more than ninety working days from the prescribed deadline or failing to submit the final settlement form within ninety working days from the prescribed deadline.

7. Individuals and organizations that violate the provisions set out in item a, point 3 and point 6, Section I, Part B of this Circular, after being administratively penalized but still fail to register taxes, submit tax declarations, and final settlement forms will have their provisional tax payments determined according to the tax laws.

II. FORMS AND AMOUNTS OF ADMINISTRATIVE PENALTIES FOR VIOLATIONS OF THE PROVISIONS ON PAYING AND SUBMITTING TAXES AND FINES

1. Individuals and organizations that delay payment of taxes or fines beyond the date specified in the tax payment notice, collection order, or the deadline stipulated in the legal documents on taxes, administrative penalty decisions in the field of taxes will be subject to penalties as prescribed by tax laws. In cases where they have already been administratively penalized but still fail to pay the taxes or fines as decided by the competent authority, measures such as temporarily suspending the use of invoices may be applied.

The tax authority directly managing tax collection issues a decision to temporarily suspend the use of invoices according to Clause 3, Article 5 of Decree 100/2004/NĐ-CP dated February 25, 2004 of the Government on administrative penalties in the field of taxes.

Organizations and individuals paying salaries, income; banks, financial institutions, credit organizations where the violator has an account, if they fail to remit state budget funds as ordered by the competent authority within ten days from the date of receiving the collection order or state budget fund deduction decision will be subject to administrative penalties at the level specified in Point 2, Section II, Part B of this Circular, with conditions for considering penalties implemented according to Item 2.1.a, Point 2, Section II, Part D of this Circular.

The authority issuing the salary deduction decision, income deduction decision, fund withdrawal from accounts, or tax and fine collection order must establish a receipt for the issuance of the decision or order with the representative of the organization, agency, or individual to serve as the basis for punishment (according to Model BGN/02-3L attached to this Circular).

III. FORMS AND AMOUNTS OF ADMINISTRATIVE PENALTIES FOR VIOLATIONS OF THE PROVISIONS ON INSPECTION AND AUDIT REGARDING TAXES

For the act of failing to comply with the inspection and audit decision of the competent authority.

For the act of failing to provide accompanying documents for goods; raw materials, materials being transported on the road to prove that the consignment has been taxed or is under management for taxation as prescribed by law within the maximum time limit of twenty-four hours from the time of inspection or discovery.

If the deadline is exceeded, and the individual or organization fails to provide the required documents, they will not be penalized according to this provision but will instead be penalized for tax evasion as provided in Item h, Point 1, Section IV, Part B of this Circular.

For one of the following acts:

a) Refusing, delaying, or evading the provision of documents, vouchers, accounting books related to determining the amount of tax payable for more than five working days from the date of receiving the written request from the inspection and audit authority or authorized person;

b) Failing to comply with the sealing order issued by the inspection and audit authority or authorized person, or improperly sealing the files, documents, vouchers, accounting books, safes, warehouses, raw material warehouses, machinery, factories.

For the act of arbitrarily removing, moving, or taking other actions that alter the sealed condition of the file, voucher, accounting book, and other documents, safes, warehouses, raw material warehouses, machinery, factories.

IV. FORMS AND AMOUNTS OF ADMINISTRATIVE PENALTIES FOR VIOLATIONS OF THE PROVISIONS ON TAX EVASION

Individuals and organizations that evade taxes, in addition to paying the full amount of evaded taxes as prescribed, will also be fined according to the number of times the tax evasion occurs. The fine amount per tax evasion incident below for each violation shall not exceed one hundred million dong, except where otherwise provided by tax laws.

For one of the following acts:

a) Omitting accounting data from the accounting records or recording such data in the accounting books not in accordance with the accounting regulations, thereby reducing the amount of tax payable or increasing the amount of tax refundable or exempted or reduced:

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 by issuing invoices on the customer copy that exceed the retained copy in terms of quantity or value;

đ) Selling goods or providing services by issuing invoices with values 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:

đ.1) Selling low-quality fresh products;

đ.2) Selling inventory goods due to decreased quality, outdated appearance, or unsuitability to consumer preferences;

đ.3) Selling agricultural products or food items according to seasonal availability;

đ.4) Selling goods as part of promotional activities as prescribed by law;

đ.5) Reducing prices of goods in cases of bankruptcy, dissolution, cessation of business operations, or changes in production and business direction.

The price reductions specified in this point must be publicly displayed at the store or transaction location, clearly indicating the old price, new price, and duration of the reduction.

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

g) Declaring or determining incorrectly the bases for calculating taxes as prescribed by each tax category, thereby reducing the amount of tax payable or increasing the amount of tax refundable or exempted or reduced, including:

g.1) Incorrectly declaring the origin, purpose of use, type, quantity, specifications, actual condition of goods or services, taxable value, tax rate, and tax code;

g.2) Incorrectly declaring the objects, types of goods, forms of business, or operating areas to evade taxable income eligible for tax exemption or reduction; underreporting revenue or declaring non-existent actual expenses to reduce taxable income;

g.3) Not settling accounts or re-declaring to the tax authority regarding goods, services, or income that have been exempted, reduced, or refunded tax but were actually used for purposes subject to additional tax payment;

g.4) Including in deductible expenses for tax calculation amounts that are not permitted to be included in reasonable deductible expenses to determine taxable income as prescribed by detailed guiding legal documents implementing the Law on Corporate Income Tax;

g.5) Expenses supported by valid documents but declared beyond the maximum limit prescribed by law on corporate income tax must be excluded from reasonable deductible expenses to determine taxable income;

h) Circulating goods or raw materials without accompanying documents to prove that the consignment has been taxed or managed by the tax authority as prescribed by law, except in the case provided for in Point 2, Section III, Part B of this Circular;

i) Other acts, outside those specified in Section IV, Part B of this Circular, which reduce the amount of tax payable or increase the amount of tax refundable or exempted or reduced.

For one of the following acts:

a) Selling goods or providing services without issuing invoices and fully declaring and paying taxes;

b) Reporting the cancellation of invoices already issued for supplying goods or services to customers with the aim of reducing the amount of tax payable or increasing the amount of tax refundable or exempted or reduced;

For one 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 declaration or registration for tax.

4. Individuals or organizations committing violations as stipulated in Points 1, 2, and 3 of Section IV, Part B of this Circular, where the exact amount of tax payable cannot be determined, shall be subject to the measure of fixing the amount of tax payable as prescribed by the law on tax.

5. Individuals or organizations using blank invoices will, in addition to being penalized as prescribed in Subpoint a, Point 3, Section IV, Part B of this Circular, also be subject to the measure of temporarily suspending the use of invoices as prescribed in Subpoint b, Point 3.2, Section C of Circular No. 120/2002/TT-BTC dated December 30, 2002, issued by the Ministry of Finance to guide the implementation of Decree No. 89/2002/NĐ-CP dated November 7, 2002, of the Government on printing, issuing, using, and managing invoices.

6. Accounting vouchers, invoices, and accounting books that are administrative violation evidence may be subject to the measure of forced destruction of the evidence and means used for administrative violations.

7. Individuals or organizations committing violations as stipulated in Subpoints a, b (except for the case of erasing or altering invoices) of Point 1; Subpoint b (except for the case of destroying other accounting vouchers or accounting books), Subpoint c, Point 3, Section IV, Part B of this Circular before the time specified in Point 3, Section VI, Part A of this Circular shall not be penalized for tax evasion as prescribed in this Article but shall be penalized according to the law on administrative penalties in the field of accounting.

8. Individuals or organizations committing violations as stipulated in Subpoint c (except for the case of erasing or altering other accounting vouchers or accounting books), Subpoint d, Subpoint đ, Subpoint e of Point 1; Point 2; Subpoint a, Subpoint b (except for the case of destroying other accounting vouchers or accounting books) of Point 3, Section IV, Part B of this Circular before the time specified in Point 3, Section VI, Part A of this Circular shall not be penalized for tax evasion as prescribed in this Article but shall be penalized according to the Government's regulations on printing, issuing, using, and managing invoices.

9. In the case where taxpayers who declare taxes are currently enjoying preferential exemptions from corporate income tax are found to have committed violations such as increasing costs to increase losses, increasing costs to decrease profits, decreasing costs to increase profits, and incorrectly determining the conditions for enjoying preferential exemptions from corporate income tax, then:

- If the violation is detected during the years of income tax exemption, it shall not be penalized for tax evasion but shall be subject to administrative penalty for other related violations;

- If the aforementioned violations have not been detected and the individual or organization does not self-correct the consequences to reduce the corporate income tax of the following year after the exemption period ends, these violations will be penalized for tax evasion.

C. AUTHORITY TO IMPOSE ADMINISTRATIVE PENALTIES

I. AUTHORITY OF THE TAX AUTHORITIES TO IMPOSE ADMINISTRATIVE PENALTIES

Except where the tax law provides otherwise regarding the level of fines, the following persons have the authority:

1. Tax officials on duty have the right to:

a) To issue warnings;

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

2. The Head of the Tax Station, the Head of the Tax Team within their functional and task scope 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 measures to remedy the consequences specified in point 3, Section IV, Part A of this Circular.

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 measures to remedy the consequences specified in point 3, Section IV, Part A of this Circular.

II. AUTHORITY OF CUSTOMS AUTHORITIES TO IMPOSE ADMINISTRATIVE PENALTIES

Except where the law provides otherwise regarding the level of fines, the following persons, according to their functions and tasks in managing taxes on goods; raw materials for export and import, have the authority 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 Director of Customs, the Head of the Inspection Team under the Provincial, Inter-provincial, or Central City Customs Bureau (hereinafter referred to as the Customs Bureau), the Head of the Anti-Smuggling Control Team, and the Commander of the Sea Control Squadron under the General Department of Customs Investigation 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 Director of the Customs Bureau has the authority:

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 measure prescribed in point 3, Section IV, Part A of this Circular;

đ) Apply the measures to remedy the consequences prescribed in points c and d, Clause 3, Article 12 of the Administrative Offense Penalty Ordinance.

4. The Director of the Anti-Smuggling Investigation Department under the General Department of Customs 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 measure prescribed in sub-item b, point 3, Section IV, Part A of this Circular.

III. AUTHORITY OF THE CHAIRPERSONS OF PEOPLE'S COMMITTEES AT ALL LEVELS TO IMPOSE ADMINISTRATIVE PENALTIES IN THE FIELD OF TAXATION

Implemented in accordance with Articles 28, 29, and 30 of the Administrative Offense Handling Ordinance.

IV. DELEGATION OF AUTHORITY TO IMPOSE ADMINISTRATIVE PENALTIES AND PRINCIPLES FOR DETERMINING AUTHORITY TO IMPOSE ADMINISTRATIVE PENALTIES IN THE FIELD OF TAXATION

1. Delegation of authority to impose administrative penalties is carried out as follows:

a) The delegation of authority to impose administrative penalties by the positions stipulated in Article 41 of the Administrative Offense Handling Ordinance can only be implemented for direct deputies. Delegation must be done in writing and only when the superior is absent;

b) The deputy authorized by the superior has the authority to impose administrative penalties according to the authority of the superior and must bear responsibility for the administrative penalty decision made. The person authorized cannot delegate further to any other individual.

2. Principles for determining authority to impose administrative penalties are provided in Sections I, II, and III, Part C of this Circular as follows:

a) Chairpersons of People's Committees at all levels have the authority to impose administrative penalties in areas under local state management;

b) In cases where administrative offenses fall within the authority to impose penalties of multiple individuals, the penalty shall be imposed by the first person to handle the case;

c) Authority to impose monetary penalties is determined based on the maximum amount of the fine framework prescribed for each administrative offense;

d) Authority to apply confiscation measures for items and means of administrative offenses must be based on the actual value of the confiscated items and means to determine the authority;

đ) Authority to apply measures to remedy the consequences is carried out in accordance with the provisions of legal documents that allow the position to have the authority to apply measures to remedy the consequences; while also basing on specific acts of violation that prescribe the application of remedial measures;

e) In cases where the amount of the fine, the value of confiscated items and means, or one of the forms of punishment or remedial measures exceeds the authority or goes beyond the authority, the person handling the violation case must promptly transfer the case to the person with the authority to impose penalties.

3. In cases where a person commits multiple administrative offenses, the authority to impose penalties is determined as follows:

a) If the form and level of punishment prescribed for each act all fall within the authority of the person imposing the penalty, then the authority to impose penalties still belongs to that person;

b) If the form and level of penalty prescribed for one of the violations exceed the authority of the person imposing penalties, then that person must transfer the case to the authority with jurisdiction to impose penalties.

D. PROCEDURES FOR IMPOSING ADMINISTRATIVE PENALTIES AND ENFORCING DECISIONS ON ADMINISTRATIVE PENALTIES

I. PROCEDURES FOR IMPOSING ADMINISTRATIVE PENALTIES

1. Warning penalty: warning penalty is applied to individuals and organizations committing minor administrative offenses for the first time, with mitigating circumstances, or for all administrative offenses committed by minors aged from 14 to under 16 years old. Warnings are decided in writing.

2. Simplified penalty procedure: simplified penalty procedure refers to the situation where the person authorized to impose penalties does not prepare a record but issues a penalty decision on the spot. Cases that can be handled through the simplified penalty procedure include:

a) Administrative offense where the prescribed fine is a warning or a fine up to 100,000 VND;

b) An individual committing multiple administrative offenses where the prescribed form and level of punishment for each act are all warnings or fines up to 100,000 VND;

c) In cases of simplified penalty procedures, the person authorized does not prepare a record but issues a penalty decision on the spot. The penalty decision must follow Model 05 attached to this Circular. Individuals and organizations subject to penalties may pay the fine on the spot to the person authorized to impose penalties and receive a receipt for payment of the fine issued by the Ministry of Finance (Model CTT11).

3. Preparing an administrative offense record

The person authorized to impose administrative penalties in the field of taxation when performing official duties, upon discovering an administrative violation in the field of taxation, shall be responsible for promptly preparing an inspection record; except in cases where penalties are imposed through simplified procedures and cases of late payment of taxes and fines as prescribed by tax laws.

The inspection record must be prepared in at least two copies; it must be signed by the person preparing the record and the violator or representative of the violating organization; if there are witnesses, they must also sign the record; in cases where the record consists of multiple pages, the person preparing the record must sign each page of the record. In cases where the violator, representative of the violating organization, or witness refuses to sign the record, the person preparing the record must clearly state the reason in the record, and the individual or agency conducting the inspection or examination will still implement recommendations and decisions in the record and bear legal responsibility for those conclusions and recommendations.

Upon completion, the record must be handed over to the individual or organization that violated one copy; in cases where the person preparing the record does not have the authority to impose penalties, the head of that person who has the authority to impose penalties must also sign the record; if necessary, verification must be conducted before signing the record; if the violation exceeds the penalty-imposing authority of the person preparing the record, that person must send the record to the person with the authority to impose penalties.

4. Time limit for issuing a penalty decision

a) For simple cases where the violation is clear and no additional verification is needed, a penalty decision must be issued within a period not exceeding ten days from the date of the record of the administrative violation. The administrative penalty decision must follow the prescribed format;

b) For cases with many complex circumstances such as items or means requiring appraisal, needing to clearly identify the subject of the administrative violation or other complex circumstances, the time limit for issuing a penalty decision is thirty days from the date of the record;

c) If additional time is deemed necessary for verification and evidence collection, the person authorized to impose penalties must report in writing to their direct superior no later than ten days before the deadline specified in point b above to request an extension; the extension must be in writing; the extension period cannot exceed thirty days.

Beyond the aforementioned time limit, the person authorized to impose penalties may not issue a penalty decision; in cases where a penalty decision is not issued, measures to mitigate consequences as stipulated in point 3, Section IV, Part A of this Circular and confiscation of prohibited circulating items of administrative violations can still be applied;

d) If the person authorized to impose penalties makes a mistake by exceeding the time limit without issuing a penalty decision, depending on the severity of the violation, they may be subject to disciplinary action, criminal prosecution, and compensation for damages as prescribed by law;

đ) When imposing a penalty decision on a person who commits multiple administrative violations, the authorized person issues only one penalty decision detailing the form and level of penalty for each violation, and if the form of penalty is a fine, it is accumulated into a total fine;

e) The penalty decision must be sent to the individual or organization being penalized and the agency collecting the fine within three days from the date of issuance of the penalty decision.

5. The General Department of Taxation guides local Tax Departments to design inspection records and penalty decision templates accompanying this Circular to suit each case content.

6. Procedure for stamping administrative penalty decisions

a) Administrative penalty decisions of persons authorized to impose penalties are stamped with the seal of the authority of the person authorized to impose penalties for that violation;

b) For decisions made by persons authorized to impose penalties who have been delegated authority, the stamp is placed one-third (one third) to the left of the signature of the person authorized to make the decision;

c) For decisions made by persons authorized to impose penalties who do not have the direct authority to stamp, the decision is stamped with the seal of the authority issuing the decision in the upper left corner of the decision, where the name of the penalizing agency and the number and code of the decision are recorded.

7. Place of payment for fines, time limit for payment of fines

a) Individuals and organizations subject to penalties must pay fines at the State Treasury, except in cases where fines are paid on the spot and in the cases specified in point 7b below;

b) In remote areas, isolated regions, on rivers, at sea, or in areas where travel is difficult or outside regular working hours, individuals and organizations subject to penalties may pay fines to the person authorized to impose penalties, and the person authorized to collect fines must issue a receipt to the payer according to regulations.

"Remote and isolated areas" refer to mountainous, island, and other areas far from or without State Treasuries;

c) Within ten days from the date of receiving the penalty decision, individuals and organizations subject to penalties must pay the fine at the State Treasury specified in the penalty decision, except in cases where fines were paid on the spot.

In cases of collecting fines as specified in point 7b above, the person collecting the fine must deposit it into the State Treasury within two days; for cases of collecting fines on rivers or at sea, the two-day period starts from the day of arrival at shore.

8. Procedures for confiscating items and means of administrative violations

When confiscating items and means of administrative violations recorded in the penalty decision, the person authorized to impose penalties must prepare an inspection record. The record must clearly state the name, quantity, type, registration number (if applicable), condition, and quality of the confiscated items, money, goods, and means, and must include signatures of the confiscating officer, the person being penalized or representative of the penalized organization, and the witness.

If sealing of confiscated items and means is required, it must be done immediately in front of the person being penalized or representative of the penalized organization and the witness; if the person being penalized or representative of the penalized organization is absent, there must be two witnesses present.

9. Handling of confiscated items and means of administrative violations

a) As for the confiscated administrative violation objects and means, the person deciding to confiscate shall be responsible for preserving such objects and means.

- If the value of the objects and means involved in an administrative violation case is 10,000,000 VND or more, the person deciding to confiscate must hand over these objects and means to the provincial auction service center where the objects and means were confiscated. If the value of the objects and means involved in an administrative violation case is less than 10,000,000 VND, the person deciding to confiscate must hand them over to the county financial agency to organize the auction. The auctioning of administrative violation objects and means shall be carried out in accordance with the laws on auctioning;

- The proceeds from the auction of administrative violation objects and means, after deducting costs as prescribed by law, must be deposited into the State Budget through an account opened at the State Treasury;

b) As for harmful cultural products, fake goods without usable value, items harmful to human health, animals, and plants that are ordered to be destroyed, the competent authority must establish a Disposal Committee to destroy them. Depending on the nature of the objects and means, the Disposal Committee will include representatives of relevant state agencies. The destruction of administrative violation objects and means must be recorded in a protocol signed by the members of the Disposal Committee;

c) As for goods, items, and means that are ordered to be removed from the territory of Vietnam or re-exported, the violator individuals or organizations must remove them from the territory of Vietnam within the time limit specified in the penalty decision;

d) As for easily perishable administrative violation objects and means, the competent authority must immediately record them in a protocol and organize their sale. The proceeds must be deposited into a temporary holding account of the financial agency opened at the State Treasury. If later, according to the decision of the competent authority, the objects and means are confiscated, the proceeds must be deposited into the State Budget; if they are not confiscated, the proceeds must be returned to the owner, manager, or lawful user;

đ) As for administrative violation objects and means, except those specified in points b, c, and d, Section I, Part D of this Circular, whose owners, managers, or lawful users are unknown or have not come to claim them, the authority confiscating them must announce in mass media and publicly post notices at the office of the confiscating authority; within thirty days from the date of public posting of the notice, if the owner, manager, or lawful user cannot be identified or has not claimed them, the authority must issue a decision to confiscate the administrative violation objects and means for disposal as provided in point a, Section I, Part D of this Circular;

e) As for objects and means that have been illegally appropriated or used to commit administrative violations, they must be returned to the owner, manager, or lawful user;

g) Storage fees, wharfage fees, preservation fees for administrative violation objects and means, and other expenses consistent with the provisions of law may be deducted from the proceeds of the sale of administrative violation objects and means. No storage fees, wharfage fees, or preservation fees will be charged during the period when the objects and means are temporarily held if the owner of the objects and means is not at fault in committing the administrative violation or if confiscation measures are not applied to the objects and means.

II. IMPLEMENTATION OF THE PENALTY DECISION

1. Enforcement of the administrative violation penalty decision:

The enforcement of the administrative violation penalty decision in the tax field is regulated as follows:

a) Individuals and organizations subject to penalties must comply with the administrative violation penalty decision within ten days from the date of receipt of the decision, except where otherwise provided by law. After issuing the penalty decision, the authority imposing the penalty must deliver the decision to the penalized individual or organization or notify them to come and collect it; the date on which the penalized individual or organization receives the penalty decision is considered the date of delivery of the decision;

b) If the individual or organization subject to penalties does not voluntarily comply with the deadline set forth in point a above, they will be enforced compulsorily;

c) In cases where, after one year, the authority cannot deliver the penalty decision to the penalized individual or organization due to their failure to collect it and the inability to determine their address or for other objective reasons, the authority that issued the penalty decision will issue a decision to suspend the execution of the main forms of punishment and remedial measures recorded in the decision; however, supplementary punishments such as confiscation of objects and means used to commit the administrative violation as recorded in the penalty decision will still be executed.

2. Compulsory enforcement of the administrative violation penalty decision:

2.1 Individuals and organizations subject to administrative violation penalties but who fail to voluntarily comply with the deadline set forth in point 1, Section II, Part D of this Circular will be enforced compulsorily using the following measures:

a) Deducting part of the salary or income, or deducting money from bank accounts or financial institutions, credit organizations, and other financial organizations.

Organizations or individuals paying salaries or income, or banks, financial institutions, and credit organizations where the penalized individuals or organizations have accounts, are responsible for implementing the decisions of the competent authorities.

In cases where the accounts of penalized individuals or organizations do not have sufficient balances to pay taxes or fines, once the accounts have sufficient balances, banks, financial institutions, and credit organizations must deposit the State Budget the outstanding tax and fine amounts before executing other transfer orders of the penalized party;

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

c) Seizing assets or goods equivalent in value to the amount of fines or taxes as stipulated in the administrative violation penalty decision in the tax field for auction.

d) Shall not process export or import procedures for the next shipment until the full amount of tax and fine has been paid.

2.2. Competent authority to issue enforcement decisions

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

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

2.3. Certain contents regarding enforcement of administrative penalty decisions

a) Individuals and organizations receiving an enforcement decision must strictly comply with such decision;

b) Individuals and organizations subject to enforcement must bear all costs related to the organization and implementation of enforcement measures;

c) In cases where necessary, enforcement actions using the measures specified in points b and c, Section 2.1, Part D of this Circular must be notified in writing to the Chairman of the People's Committee at the commune level where the enforcement action will take place, prior to its execution, for coordination purposes;

d) Functional agencies of the People's Committee are responsible for enforcing the enforcement decision of the Chairman of the same-level People's Committee according to the assignment of the Chairman of the People's Committee;

đ) Public Security forces are responsible for ensuring order and safety during the enforcement of the enforcement decision of the Chairman of the same-level People's Committee or the enforcement decision of other state agencies when requested by such agencies;

e) Procedures for applying enforcement measures shall be carried out in accordance with the provisions of the Government.

3. Suspension of enforcement of fines

a) Individuals fined VND 500,000 or more may be granted suspension of enforcement of the administrative penalty decision in cases of special economic difficulties and upon submission of a request confirmed by the People's Committee at the commune level where they reside or the organization where they work;

b) The period of suspension of enforcement of the fine shall not exceed three months from the date of the suspension decision;

c) The authority issuing the fine decision has the right to decide on the suspension of enforcement of that fine decision.

4. Transfer of case files of violations indicating criminal offenses for criminal prosecution.

When considering the decision to impose penalties for violations stipulated in Points 4, Section III, Part B; Points 1, 2, 3, 4, Section IV, Part B of this Circular, if it is found that the violation indicates a criminal offense as provided for in the Penal Code, the competent authority 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.

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, must transfer the violation file to the competent criminal investigation agency.

The criminal investigation agency receiving the case file shall be responsible for informing the transferring agency of the results of the handling.

5. Statute of limitations for enforcement of administrative penalty decisions

The statute of limitations for enforcement of administrative penalty decisions in the field of taxation is one year from the date the penalty decision becomes effective; beyond this period, if the decision is not enforced, it will no longer be enforced, but the measure provided for in Point 3, Section IV, Part A of this Circular will still be applied if it is recorded in the decision. In cases where individuals or organizations being penalized intentionally evade or delay, the aforementioned statute of limitations will be recalculated from the time the evasion or delay ends.

D. COMPLAINTS, REPORTS, REWARDS, AND HANDLING OF VIOLATIONS

I. COMPLAINTS, REPORTS

1. Individuals and organizations penalized for administrative violations in the field of taxation or their legitimate representatives have the right to complain about the administrative penalty decision, the decision to apply preventive measures, and the guarantee of administrative violation handling.

2. Every citizen has 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.

II. ADMINISTRATIVE LITIGATION

Administrative litigation against administrative penalty decisions, decisions to apply preventive measures, and guarantees for administrative violation handling shall be conducted in accordance with the laws governing administrative litigation procedures.

III. REWARDS

1. Individuals and organizations with outstanding achievements in combating administrative violations in the field of taxation shall be rewarded according to the general reward system of the State.

2. It is strictly prohibited to use funds collected from administrative penalties or proceeds from the sale of confiscated goods for rewards.

IV. HANDLING OF VIOLATIONS

1. Authorities responsible for handling administrative violations who harass, tolerate, cover up, fail to handle, or handle improperly, beyond their authority, or fail to act within the prescribed time limit shall be disciplined or criminally prosecuted depending on the nature and severity of the violation; if damage is caused, compensation must be made in accordance with the law.

2. Individuals penalized for administrative violations who obstruct public officials performing their duties, delay, or evade compliance or commit other violations shall be administratively penalized or criminally prosecuted depending on the nature and severity of the violation; if damage is caused, compensation must be made in accordance with the law.

E. EFFECTIVE DATE OF ENFORCEMENT

This Circular shall take effect fifteen days after its publication in the Official Gazette. Circular No. 128/1998/TT-BTC dated September 22, 1998, Circular No. 30/2001/TT-BTC dated May 16, 2001 amending and supplementing Circular No. 128/1998/TT-BTC dated September 22, 1998, and Circular No. 114/1999/TT-BTC dated September 23, 1999 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 in the field of taxation are hereby abolished.

During implementation, if there are any issues, please report them to the Ministry of Finance for timely resolution./.