New sanction levels for late submission of tax return

The Vietnamese government issued Decree 125/2020/ND-CP (Decree 125) on October 19, 2020 listing several penalties and administrative fines for breaches in tax and invoicing regulations. The Decree has come into effect since December 5, 2020.

In accordance with the Decree 125, late submission of tax returns shall incur higher fine. To avoid the fine, the tax payer, accordingly, needs to strictly follow the DEADLINE FOR SUBMISSION OF TAX RETURNS as regulated at the Article 44 of the Law on Tax Administration 2019 by the Vietnam National Assembly.

The new sanction levels for violations against regulations on the deadline for submission of tax return dossiers under Article 13 of Decree 125/2020/ND-CP are as below:

No.	Types of violations		Level of fines
1	Filing tax returns from 01 to 05 days later than the regulated deadline under mitigating circumstances.		Warning from Tax Authority
2	Filing tax returns from 01 to 30 days later than the regulated deadline, except the case specified in item 1 as above		A fine ranging from VND 2,000,000  to VND 5,000,000
3	Filing tax returns from 31 to 60 days later than the regulated deadline		A fine ranging from VND 5,000,000 VND to VND 8,000,000
4	4.1/ Filing tax returns from 61 to 90 days later than the regulated deadline		A fine ranging from VND 8,000,000  to  VND 15,000,000
	4.2/ Filingtaxreturnsfrom91dayslaterthantheregulateddeadlineifnone of tax liability incurred
	4.3/ Failing to submit any tax returns and no incurring taxes
	4.4/Failing to submit the supplement dossiers under regulations on tax administration for enterprises having related party transactions enclosing with the corporate tax finalization dossier.
5	Filing tax returns more than 90 days later than the regulated deadline and such act results in additional taxes to be paid, and the taxpayer has fully paid taxes, deferred amounts into the state budget before the time of the tax authority’s announcement of the decision on tax inspection and examination, or before the time of the tax authority’s issuance of the report on the deferred submission of tax returns under the provisions of clause 11 of Article 143 in the Law on Tax Administration.		A fine ranging from VND 15,000,000 to VND 25,000,000
			If the fine applied under this clause is greater than the amount of tax arising on the tax declaration dossier, the maximum fine amount is equal to the payable tax amount but not less than VND 11,500,000
6	Remedies – Compelling the full payment of deferred tax amounts into the state budget if the taxpayer delays filing their tax return, leading to the late payment of taxes; – Compelling the submission of tax returns, enclosing with supplement dossier, for acts as stated at 4.3 and 4.4 above

Note: For a tax or invoice-related administrative violation, if an entity commits such violation, they must be fined two times as much as the amount of penalty imposed on persons. The above fines are applicable to organizations (Pursuant to Clause 5, Article 5 and Point a, Clause 4, Article 7 of Decree 125/2020 / ND-CP)

Time limits for imposition of tax-related administrative penalties

Pursuant to Point a, Clause 2, Article 8 of Decree 125/2020 / ND-CP, time limit for imposition of penalties for administrative violations against regulations on tax-related procedures shall be 02 years from the date of commission of these violations.

– For cases 1, 2, 3, 4.1, 4.2, the date of commission of any of these acts which is accepted as the start date of that time limit shall be the date on which taxpayers apply for tax registrations or notify tax authorities or file tax returns.

– For cases 4.3 and 4.4, the date of commission of these acts which is accepted as the start date of that time limit shall be the date on which competent law enforcement officers detect these acts.

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