Acts of making incorrect declarations to reduce the amounts of tax payable are considered administrative tax offenses and the statute of limitations for sanctioning administrative offenses related to tax administration is longer than others. administrative offences, in particular 05 years from the date of commission of the offences.
Acts of making incorrect declarations to reduce the amounts of tax payable
Clause 1, section 142 of the Revenue Administration Act 2019 provides that acts of making incorrect statements to reduce the amounts of tax payable or increase the amounts of tax exempt, reducible, refundable or uncollectible include:
(1) Erroneous declaration of tax bases or amounts of deductible tax or erroneous identification of cases eligible for exemption, reduction or refund of tax resulting in a decrease in the amounts of tax payable or an increase in the amounts of tax exempt, reducible or refundable when the economic operations have been fully reflected in the accounting books, and invoices and legal documents;
(2) Provide figures in their market pricing records or transfer pricing transaction reports that differ from figures found during inspections or reviews to reduce tax amounts owing or increase tax amounts exempt, reducible or reimbursable, as concluded by tax administration offices or other competent bodies;
(3) Use illegal invoices or documents, or illegally use invoices to account for the value of goods or services purchased in order to reduce the amounts of taxes payable or to increase the amounts of taxes exempt, reducible or refundable in the event that buyers of goods or services can prove that sellers are at fault with respect to the use of such invoices or documents.
To note:
– Taxpayers who make inaccurate declarations to reduce the amounts of taxes payable or increase the amounts of taxes exempted, reducible, refundable or irrecoverable for imported or exported goods but who do not fall within the cases provided for in clauses 6 and 7, article 143 of this law must, in addition to making additional declarations and paying in full the amounts of taxes and default interest, be penalized for administrative shortcomings related to the tax administration in the following cases:
- Taxpayers discover inaccurate declarations by themselves and make additional declarations after notification by the customs offices to the direct control of customs records for goods undergoing customs procedure or within 60 days from the date of customs clearance and before that customs offices decide on post-clearance control or control of cleared goods;
- Customs offices detect incorrect declarations when carrying out customs procedures, inspection of goods released from customs or post-clearance inspections and offenders are willing to remedy the consequences by paying in full the tax amounts due under the regulations ;
- Taxpayers do not fall under the cases specified in points a and b of this clause and are prepared to remedy the consequences by paying in full the amounts of tax due.
– Taxpayers who make incorrect declarations to reduce the amounts of tax payable or increase the amounts of tax exempt, reducible or refundable, but then make additional declarations in the tax return files and are ready to remedy the consequences by paying the tax amounts due in full before the tax offices announce the tax audit or the tax audit decisions made in the taxpayer offices or before the tax offices detect incorrect statements not by a examination or inspection at taxpayers’ offices, or before the relevant agencies detect incorrect declarations will not be penalized for administrative offenses related to tax administration
– For imported or exported goods, taxpayers will not be penalized for administrative offenses related to the tax administration but will still have to pay the unpaid tax amounts and late payment interest to the State budget in the following cases:
- They carry out additional declarations before the customs offices notify the direct examination of the customs files for the goods undergoing the customs procedure;
- They make additional declarations within 60 days from the date of customs clearance and before the customs offices decide on a post-clearance inspection or an inspection of the released goods.
Penalty for acts of false declarations in order to reduce the amounts of tax to be paid
In accordance with Article 16, Decree No. 125/2020/ND-CP, sanctioning acts of misrepresentation, resulting in the sufficiency of the amount of tax payable, or an increase in the amount of tax exempted, reducible or refundable as follows:
* Sanction forms and levels
A fine equal to 20% of the under-declared amount of tax payable or of the amount of exonerated, reducible or refundable tax greater than the amount provided for is imposed for one of the following breaches:
(1) Erroneously declaring tax bases or deductible amounts of tax or wrongly identifying cases eligible for tax exemption, reduction or refund resulting in a decrease in the amounts of tax payable or an increase in tax amounts that are exempt, reducible or refundable when the economic operations have been fully reflected in the accounting books, and invoices and legal documents;
(2) Incorrect tax declaration resulting in lower tax amounts to be paid
or an increase in exempt, reducible, or refundable amounts of tax, and the taxpayer voluntarily made additional returns and paid the full amount of tax deficiency to the state budget before the tax agency stopped the audit or tax inspection at the registered office of the taxpayer;
(3) The incorrect declaration of tax resulting in a reduction in the amounts of tax to be paid or an increase in the amounts of tax exempted, reducible or refundable, has been considered as tax evasion by the body competent to register the inspection records and tax review or administrative offense records, but the taxpayer is committing administrative tax evasion offenses for the first time, and has made additional declarations and paid the full amount of tax to the state budget before the when the competent agency makes the sanction decision and the tax agency has already established a written record to determine that incorrect declaration leads to the deficiency of the amount of tax;
(4) Incorrectly declared tax resulting in a sufficiency of the amount of tax payable, or an increase in the amount of tax exempt, reducible or refundable for a transfer pricing transaction, but the taxpayer has already established a file for determining the market price or already constituted and sent its annexes as prescribed by the law on the tax administration of companies carrying out transfer pricing transactions;
(5) Using illegal invoices and documents to account for goods and services purchased to reduce the amount of tax payable or increase the amount of tax exempt, reducible, or refundable, but when such violation is discovered by the tax administration through tax control or inspection, the buyer proves that the sellers are responsible for the use of illegal invoices and documents, and that the accounting has been sufficiently done by the buyer.
* Corrective actions :
In addition to fines, the following corrective measures will be applied:
(1) Forced full payment of the amount of deficiency tax and the amount of exempt, reducible or refundable tax that is greater than that prescribed in the state budget, for the above acts of violation.
If the limitation period is exceeded, the taxpayer is not penalized under clause 1 of this article, but he must make full payment of the amount of tax loss, the amount of tax exempt, reducible or refundable that is greater than the prescribed amount. and interest on arrears to the State budget according to the period provided for in article 6 of article 8 of this decree.
(2) Forced adjustment of loss and input value added tax deductible amount transferred to next period (if applicable), for acts of violation.
To note: In the event that the taxpayer makes incorrect declarations as prescribed in points a, b and d, clause 1 of Decree 125/2020/ND-CP (sections (1), (2), (4) in the corrective measures) without leading to an insufficiency of the amount of the tax payable or to an increase in the amount exempted, reducible or to the reimbursement of the tax has not been granted, it is not sanctioned with a fine equal to 20% under the this article, but is with a fine of 5,000,000 VND to 8,000,000 VND.
here are the acts of making misrepresentations to reduce the amounts of taxes payable or increase the amounts of taxes that are exempt, reducible, refundable or irrecoverable.
