New Point About Administrative Penalties For Tax Violations According to Latest Decree: Decree 125/2020 / ND-CP

Decree 125/2020 / ND-CP newly issued on October 19, 2020 will replace the current legal documents regulating administrative penalties for tax and invoice violations. The Decree updates a number of important new points that taxpayers need to pay attention to. The administrative penalty for violation can be increased up to 1.6 times compared to the old penalty. The following article will outline the regulations on the above matter.

New point on the level of penalties for tax administrative violations according to Decree 125/2020 / ND-CP recently issued on October 19, 2020.

The sanctioning levels for violations of tax procedures specified in Decree 125/2020 are adjusted to be higher than before. The Decree also details the false declarations that lead to the lack of taxes, the specific fines for tax evasion as well as aggravating and mitigating circumstances.

Specifically, the Decree clearly stipulates: Administrative violations for tax amounts from 100 million VND or more or with a value of goods from 500 million VND or more are determined as large-scale administrative violations of coa tax. An administrative violation of 10 or more invoice numbers is defined as a large-scale administrative violation of invoices.

The principle of determining the level of a fine when there is an aggravating and mitigating circumstance is calculated to increase or decrease by 10% of the average fine level of the fine bracket.

A fine for acts of colluding and covering up taxpayers to evade taxes

1.Increased fine levels for acts of collusion to cover taxpayers to evade taxes according to the latest Decree: Decree 125/2020 / ND-CP.

According to Article 19 of this Decree:

- A fine ranging from VND 6,000,000 to VND 16,000,000 shall be imposed for colluding, covering up taxpayers to evade taxes, or failing to comply with decisions on enforcement of tax administration, except for failure to transfer money from their accounts. tax payment specified in Article 18 of this Decree.

- This fine is a fine level applied to the organization. The penalty for an individual will be of that of the organization.

The maximum fine level for individuals is 8,000,000 VND, the maximum fine level for organizations is 16,000,000 VND.

Thus, the maximum penalty for collusion to cover taxpayers to evade tax of Decree 125/2020 / ND-CP has increased to 1.6 times compared to the old penalty in Decree 129/2013 / ND- CP.

2) A fine up to 3 times the amount of tax evaded from the first time of evasion may be imposed.

According to Clause 5, Article 17 of Decree 125/2020 / ND-CP stipulates:

• A fine of 3 times the evaded tax amount shall be imposed on taxpayers that commit one of the acts specified in Clause 1 of this Article involving three or more aggravating circumstances.
• Decree 125/2020 / ND-CP does not stipulate how many times the tax evasion is, so it can be understood that it can be fined 3 times the amount of tax evasion from the first evasion if there are 3 aggravating circumstances up.

     Hopefully, when the fine level increases, individuals and organizations that pay taxes will declare and pay taxes in accordance with the provisions of law.

See also: Decree 125/2020 / ND-CP regulates administrative penalties on taxes and invoices

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