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Penalties for late tax declaration in Vietnam

Administrative tax declaration violations are at-fault acts committed by organizations or individuals that violate the provisions of the law on tax administration, laws on taxes, and other revenues (land use fees, land rent, water surface lease; fees for granting mineral exploitation rights; fees for granting rights to exploit water resources; remaining after-tax profits after appropriation to funds of enterprises with 100% charter capital; profits divided by state capital invested in joint stock companies, multiple-member limited liability companies) are not crimes and according to the law must be subject to administrative sanctions.

Penalties for late tax declaration in Vietnam

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    Subjects sanctioned for administrative tax violations

    Subjects subject to administrative penalties for tax violations include:

    • The taxpayer commits an administrative tax violation.
    • Related organizations and individuals commit tax administrative violations.

    Note:

    • In case the taxpayer authorizes another organization or individual to perform tax obligations and the law on tax and tax administration stipulates the obligations and responsibilities of the authorized party to perform on behalf of the taxpayer, then the authorized party commits an administrative violation, the authorized organization or individual will be punished according to regulations.
    • In cases where according to the provisions of law on taxes and tax administration, organizations and individuals should register taxes, declare and pay taxes on behalf of taxpayers, and the organizations or individuals declaring and paying taxes on their behalf commit violations. For administrative violations, organizations and individuals that declare and pay taxes on their behalf will be fined for administrative tax violations according to regulations.

    Deadline for submitting tax declaration documents

    Article 44 of the Law on Tax Administration 38/2019/QH14 stipulates the deadline for submitting tax declaration documents for each type of tax as follows:

    Kind of tax Latest deadline
    Declare and pay monthly The 20th day of the month following the month in which tax obligations arise
    Declare and submit quarterly The last day of the first month of the next quarter
    Tax period by year The last day of the 3rd month from the end of the calendar year or fiscal year for annual tax finalization dossiers;

    The last day of the first month of the calendar year or fiscal year for annual tax returns.

    Personal income tax finalization dossier April 30 of the next year.
    Presumptive tax declaration dossier 10 days from the date of starting a business with new business households or individuals

    Once in operation: December 15 every year

    Declare and submit each time it arises The 10th day from the date tax liability arises
    Declare tax on termination of operations, contract termination, or business reorganization Day 45 from the date of the event
    Tax declaration documents for imported and exported goods Export: 04 hours before departure or 02 hours with express delivery service.

    Import: 30 days from the date the goods arrive at the border gate

    (Article 25 of Customs Law 2014)

    Principles of sanctioning administrative violations of tax

    Organizations and individuals that commit many administrative violations will be sanctioned for each violation, except in the following cases:

    • In case at the same time a taxpayer incorrectly declares one or more indicators on tax records of the same tax, the act of false declaration is subject to tax procedure penalties and is only sanctioned for one act of false declaration. The target on the tax file has the highest fine among the committed acts and the aggravating factor of repeated administrative violations is applied;
    • In the case at the same time a taxpayer is late in submitting multiple tax declarations for many tax periods but in the same tax category, he or she will only be penalized for one act of late submission of tax declarations with the highest fine bracket among the taxes. The act has been committed and the aggravating circumstances of administrative violations have been applied many times.
    • In case the late tax declaration dossiers there is a late tax declaration dossier that is a case of tax evasion, then separate them to punish tax evasion.

    Statute of limitations for sanctioning tax administrative violations

    The statute of limitations for violations of tax procedures is 02 years from the date of commission of the violation.

    Penalties for late tax declaration in Vietnam

    Article 13 of Decree 125/2020/ND-CP stipulates penalties for violations of the tax declaration submission deadline, specifically as follows:

    “1. Penalties imposed in form of cautions shall be imposed for violations arising from filing tax returns from 01 to 05 days after expiration of the prescribed time limits under mitigating circumstances.
    2. Fines ranging from VND 2,000,000 to VND 5,000,000 shall be imposed for the act of submitting tax returns from 01 to 30 days after expiration of the prescribed time limits, except the cases specified in clause 1 of this Article.
    3. Fines ranging from VND 5,000,000 to VND 8,000,000 shall be imposed for the act of submitting tax returns from 31 to 60 days after expiration of the prescribed time limits.
    4. Fines ranging from VND 8,000,000 to VND 15,000,000 shall be imposed for one of the following violations:
    a) Filing tax returns from 61 to 90 days after expiration of the prescribed time limits;
    b) Filing tax returns at least 91 days after expiration of the prescribed time limits if none of additional taxes is incurred;
    c) Failing to submit tax returns if none of additional taxes is incurred;
    d) Failing to submit annexes under regulations regarding tax administration by enterprises having related-party transactions, enclosing CIT finalization dossiers.
    5. Fines ranging from VND 15,000,000 to VND 25,000,000 shall be imposed for the act of filing tax returns more than 90 days after the prescribed deadline if 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.
    In case where the fine amount prescribed in this clause is greater than the tax amount additionally incurred in the tax return, the maximum amount of fine for this act shall be equal to the tax amount payable specified in the tax return and shall not be less than the average of fine amounts in the range prescribed in clause 4 of this Article.
    6. Remedies:
    a) Compelling the full payment of deferred tax amounts into the state budget with respect to the commission of the acts prescribed in clause 1, 2, 3, 4 and 5 of this Article if the taxpayer delays filing their tax return, leading to the late payment of taxes;
    b) Compelling the submission of tax returns, enclosing annexes, in case of committing the acts specified in points c and d of clause 4 of this Article.”

    It can be seen that the fine for administrative violations of late submission of tax declaration documents is relatively high. To avoid being fined for violations that affect their reputation, in addition to hiring qualified accounting personnel who have a solid grasp of the profession, businesses can use tax declaration services from tax agency companies, and accounting service companies. Viet An tax agent specializes in providing tax declaration services for businesses that are complete, accurate, and on time, helping businesses feel secure to focus on developing production and business activities.

    Above are penalties for late tax declaration in Vietnam compiled by Viet An Law.. If your business needs to use tax declaration services from Viet An Tax Agent, please contact us via Hotline: (+84) 988 856 708 for advice and support.

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