Legal regulations related to using illegal invoices or evidencing documents

Legal regulations related to using illegal invoices or evidencing documents

Legal basis

Decree No.125/2020/NĐ-CP of the Government dated October 19, regulating administrative penalties for tax or invoice-related violations.

Act of using illegal invoices or evidencing documents

Using the invoices or evidencing documents mentioned hereunder constitutes the act of using illegal invoices or evidencing documents:

(1) Counterfeit invoices and evidencing documents;
(2) Invoices and evidencing documents not yet valid or expired;
(3) Invoices suspended during the period of enforcement of the invoice suspension penalty, except those permitted for use according to a tax authority’s notice;
(4) E-invoices which are not registered with any tax authority;
(5) E-invoices of which tax authority’s codes have not yet been granted if they are subject to the regulation under which e-invoices with tax authority’s codes are required;
(6) Invoices for purchase of goods and services must be dated from the date the tax authority determines that the seller is not operating at the business address registered with the competent state agency;
(7) Invoices or evidencing documents for purchase of goods or services with the invoicing date before the date on which it is determined that the invoicing party are not doing business at the address registered with a competent regulatory authorities or, though the invoicing party’s notification of the closing of their business at the address already registered with the competent regulatory authority has not been sent to the tax authority, the tax authority or the police authority or other regulatory agency establishes that they are illegal.

Subjects sanctioned for administrative violations of taxes and invoices

Persons or entities subject to administrative penalties for tax or invoice-related violations, including:

Individual taxpayers committing tax or invoice-related administrative violations.
Entities and persons involved in tax or invoice-related administrative violations.

Corporate taxpayers subject to tax or invoice-related administrative penalties, including:

Enterprises established and operated under the provisions of the Law on Enterprises, the Law on Investment, the Law on Credit Institutions, the Law on Insurance Business, the Law on Securities, the Law on Petroleum, the Law on Commerce and other legislative documents, dependent units of enterprises and places of business directly declaring, paying taxes and using invoices;
Public and non-public service units;
Entities established and operated under the Law on Cooperatives;
Foreign organizations, enterprises, branches, representative offices of foreign traders, executive offices of foreign contractors in Vietnam doing business or having income arising in Vietnam;
State regulatory authorities performing any act violating taxation and invoice regulations though such act does not fall under their assigned duties;
Cooperative associations and other entities established under laws.

Administrative penalties for using illegal invoices or evidencing documents

Administrative sanctions for using illegal invoices or evidencing documents are prescribed in Article 28 of Decree 125/2020/ND-CP as follows:

Penalties for the act of using invoices illegally or using illegal invoices

Fines ranging from VND 20,000,000 to VND 50,000,000 shall be imposed for the act of using illegal invoices or using invoices illegally as provided in Article 4 herein, except the case prescribed in point dd of clause 1 of Article 16 and point d of clause 1 of Article 17 herein.
Remedies: Compelling the cancellation of used invoices.

The penalty level mentioned above is the penalty level applicable to organizations. For the same violation, the fine for organizations is two times the fine for individuals; the fine for households and business households is the same as the fine for individuals.

Thus, according to regulations, organizations that use illegal invoices or evidencing documents may be subject to administrative penalties ranging from 20,000,000 VND to 50,000,000 VND. In case the violator is an individual, household, or business household, they may be subject to an administrative fine of from 10,000,000 VND to 25,000,000 VND.

Note: The above administrative sanctions for using illegal invoices do not apply in the following cases:

Using illegal invoices or evidencing documents for keeping accounting records of values of purchased goods or services to reduce taxes payable or increase amounts of tax refund, reduction or refund but, after the tax authority’s discovering this act through their tax inspection and examination, the buyer succeeds in proving that this act is performed through the seller’s fault and fully keeping accounts of these values in accordance with regulations.
Using illegal invoices to declare tax reduces the amount of tax payable or increases the amount of tax refunded, the amount of tax exempted or reduced.