Legal News

[Taxation] Information on Penalties for Issuance of Counterfeit Invoice

2024/09/05

A counterfeit invoice is an invoice that is intentionally issued with some or all of the quantities, amounts, etc. different from the actual transaction. (Please refer to our report on invoice abuse.) Depending on the nature of the issued counterfeit invoice, the following administrative fines and corrective measures will be imposed on the company.

1. Issuance of invoices for non-existent transactions: administrative fine of VND20,000,000 to VND50,000,000 and compulsory destruction of issued invoices.

2. Intentional false declaration of tax payment reduction or tax refund/exemption/increase of tax reduction: administrative fine equivalent to 20% of the undeclared amount.
＜Corrective Actions＞
・In the case of a larger than usual amount of tax refund, exemption, or reduction due to unpaid tax and interest on delinquent tax payments, return of the difference.
・Adjustment of profit and loss data in the corporate income tax return and carry-over of the deductible amount of VAT purchased in the VAT return to the next fiscal year (if any).

If deemed as tax evasion: Fine 1 to 3 times the amount of tax evasion.
＜Corrective measures＞
・Payment of the amount of tax evasion and interest on overdue payments
・Adjust the profit/loss data in the CIT return and the deductible amount of VAT on purchases in the VAT return (if any).

In case of tax evasion of more than VND100,000,000 or recidivism by a legal entity or individual who has received administrative punishment or conviction in the past but less than VND100,000,000, the tax authorities may share the case with investigative agencies and may hold the individual criminally liable.
The penalty for tax evasion is up to seven years in prison.
Companies are required to pay attention to the VAT rate at each stage of production and sales, and to declare and pay VAT tax after confirming the accuracy of the invoice at the time of sale of goods or provision of services. Companies receiving purchase VAT invoices can deduct or refund purchase VAT based on the issued invoices, and such costs can be recorded as a loss for CIT purposes.

References:
Decree No. 125/2020/ND-CP, Articles 16, 17, and 28.