Decree No. 129/2013/ND-CP dated October 16, 2013 of the Government on penalties for administrative violations pertaining to taxation and enforcement of administrative decision on taxation

 THE GOVERNMENT

Decree No. 129/2013/ND-CP dated October 16, 2013 of the Government on penalties for administrative violations pertaining to taxation and enforcement of administrative decision on taxation

DECREE

Pursuant to the Law on Government Organization dated December 25, 2001;

Pursuant to the Law on Handling administrative violations dated June 20, 2012;

Pursuant to the Law on Tax administration dated November 29, 2006;

Pursuant to the Law on the amendments to the Law on Tax administration dated November 20, 2012;

At the request of the Minister of Finance;

The Government promulgates a Decree on penalties for violations pertaining to taxation and enforcement of administrative decisions on taxation,

Chapter 1.

ADMINISTRATIVE PENALTIES FOR VIOLATIONS PERTAINING TO TAXATION

SECTION 1. GENERAL PROVISIONS

Article 1. Scope of regulation and objects of administrative penalties for violations pertaining to taxation

1. Scope of regulation:

This Chapter deals with the violations pertaining to taxation, penalties, remedial measures, the power to impose penalties and implement decisions on administrative penalties for violations pertaining to taxation.

Administrative violations pertaining to taxation include violations against the Law on Tax Administration, the Law on the amendments to the Law on Tax administration (hereinafter referred to as the Law on Tax administration); taxes, land rents, water surface rents, land levy; revenues from mineral extractions and other government revenues collected by tax authorities as prescribed by law.

This Decree does not apply to administrative violations pertaining to fees, charges, invoices, and administrative violations pertaining to taxation on exported and imported goods.

If International Agreements to which Vietnam is a signatory prescribes penalties for administrative violations pertaining to taxation differently from this Decree, such International Agreements shall apply.

2. Objects of penalties for administrative violations pertaining to taxation

a) The taxpayers that commit administrative violations pertaining to taxation;

b) The credit institutions defined by the Law on credit institutions (hereinafter referred to as credit institutions) that commit administrative violations pertaining to taxation;

c) Relevant organizations and individuals;

Article 2. Statute of limitation, time limit for imposition of penalties for administrative violations pertaining to taxation

1. For violations against tax procedures the time limit for issuing the decision on penalties is 02 years from the day on which the violation is committed. The day on which the violation is committed is the day succeeding the deadline for tax procedure according to the Law on Tax Administration. For electronic tax procedure, the day on which the violation is committed is the day succeeding the deadline for procedure prescribed by a competent authority.

2. For tax evasion that are not liable to criminal prosecutions, understatement of tax payable or overstatement of tax refund, the time limit for issuing the decision on penalties is 05 years from the day on which the violation is committed.

The day on which the aforesaid violation is committed is the day succeeding the deadline for submitting the tax statement on which tax is overstated, evaded, falsified, or the day succeeding the date of the decision on tax refund, tax exemption or tax reduction.

3. Where an individual is charged or prosecuted, or a decision to bring the individual to criminal proceedings is issued, then a decision to suspend the investigation or the case is issued, but signs of administrative violations pertaining to taxation are found, the agency that issues the decision to suspend the investigation or suspend the case shall send the decision together with the case documents to the agency competent to impose penalties for administrative violations pertaining to taxation within 03 days from the day on which the decision on suspension is issued. In this case, the statute of limitations shall comply with Clause 1 and Clause 2 of this Article. The period during which the case is examined is included to the time limit for imposing penalties for administrative violations.

4. Time limit for collecting tax arrears

After the deadline for imposing penalties for administrative violations pertaining to taxation, the taxpayer is exempt from penalties but still have to pay the outstanding tax and late payment interest over the previous 10 years from the day on which the violation is discovered. If the taxpayer does not apply for tax registration, he shall pay the outstanding tax and late payment interest over the entire period before the violation is discovered.

Article 3. Penalties for administrative violations pertaining to taxation

1. Warnings.

A warning shall be given if the violation is not severe, under mitigating circumstances, and must receive a warning as prescribed.

2. Fines

a) For violations against tax procedures:

A fine of up to 200 million VND shall be incurred by an organization that violates tax procedure. The maximum fine incurred by an individual that violates tax procedure is 1/2 the fine incurred by an organization according to the Law on Handling Administrative violations.

The fines mentioned in Articles 5, 6, 7, 8 and 9 of this Decree are applied to organizations. The fines incurred by individuals are 1/2 of those. Households shall incur the same level of fines as individuals.

When imposing a fine for a violation against tax procedure, it is the average level of the fine bracket for such violation. For every aggravating circumstance or mitigating circumstance, the average level shall be respectively increased or decreased by 20%.

A mitigating circumstance shall cancel out an aggravating circumstance and vice versa. The fine must not be reduced below the minimum level of the fine bracket, and must not be increased over the maximum level of the fine bracket.

b) For understatement of tax payable or overstatement of tax refund: A fine of 20% of the outstanding tax or tax refund shall be imposed, regardless the taxpayer is an organization or an individual.

c) For tax evasion: A fine of 1 - 3 times of the evaded tax. The fines mentioned in Article 11 of this Decree are applied to organizations. The fines incurred by individuals are 1/2 of those.

d) A fine in proportion to the amount that is not withdrawn and transferred to government budget shall be imposed for the violations mentioned in Article 12 of this Decree.