Regulations on Administrative Penalties for Violations of Invoices – Latest

Learn about administrative sanctions on invoices such as: forms of sanctions, principles of sanctions, levels of sanctions & statute of limitations for administrative sanctions on invoices.

I. Legal basis

• Decree 125/2020/ND-CP dated October 19, 2020;
• Decree 102/2021/ND-CP dated November 16, 2021 amends and supplements regulations on administrative sanctions for violations of invoices of Decree 125/2020/ND-CP.

II. Principles for handling administrative violations regarding invoices

Sanctions for administrative violations related to invoices are stipulated in Article 5 of Decree 125/2020/ND-CP, specifically as follows:

➤ Administrative sanctions for violations of invoices are implemented according to the provisions of law on tax management and the law on handling administrative violations.

➤ Organizations and individuals will be administratively sanctioned for violations of invoices when they commit administrative violations of invoices according to the provisions of Decree 125/2020/ND-CP.

➤ Organizations and individuals committing multiple administrative violations shall be punished for each violation, except in the following cases:

• Case 1: At the same time, a taxpayer is late in submitting multiple notifications and reports of the same type of invoice, the taxpayer will be fined for one act of late submission of notifications and reports of the invoice with the highest fine bracket among the acts already performed as prescribed in Decree 125/2020/ND-CP and the aggravating circumstance of multiple violations will be applied;
• Case 2: Violations of using illegal invoices or using illegal invoices that are subject to penalties under Articles 16 and 17 of Decree 125/2020/ND-CP will not be subject to penalties under Article 28 of Decree 125/2020/ND-CP.

III. Forms of administrative sanctions for violations of invoices according to Decree 125

1. Form of punishment

1.1. Warning penalty

Warning penalties are applied to non-serious violations of tax procedures and invoices, with mitigating circumstances and falling under the case of applying warning penalties according to the provisions of Decree 125/2020/ND-CP.

1.2. Fines

• Maximum fine of no more than VND 100,000,000 for administrative violations regarding invoices of organizations;
• Maximum fine of no more than VND 50,000,000 for administrative violations regarding individual invoices.

2. Statute of limitations for administrative violations regarding invoices

According to Decree 125/2020/ND-CP dated October 19, 2020, the statute of limitations for administrative violations related to invoices is 1 year and is amended in Decree 102/2021/ND-CP dated November 16, 2021 on the statute of limitations for administrative violations related to invoices is 2 years, effective date January 1, 2022.

3. Remedial measures

Required: cancel invoice, issue invoice, create invoice according to regulations.

See also:

>> Making commercial discount invoices Circular 78, Decree 123;

>> Issue replacement invoices and adjustment invoices according to Circular 78 and Decree 123;

>> Instructions for handling incorrectly written electronic invoices in many cases.

IV. Principles for applying administrative fines for invoice violations

➤ When determining the level of fine for a taxpayer who has violated both aggravating and mitigating circumstances, the aggravating circumstances will be reduced according to the rule that one mitigating circumstance can be deducted from one aggravating circumstance.

➤ Mitigating or aggravating circumstances that have been used to determine the fine bracket shall not be used when determining the specific fine amount as follows:

• When imposing a fine, the specific fine for each invoice violation is the average of the fine range prescribed for that violation;
• If there are mitigating circumstances, each circumstance will reduce the average fine by 10% of the fine bracket, but the fine for that act cannot be reduced to the minimum level of the fine bracket;
• If there are aggravating circumstances, each circumstance is calculated to increase the average fine by 10% of the fine bracket for that act, not exceeding the maximum level of the fine bracket.

V. Administrative penalties for violations of invoices

1. Warning penalty

Individuals and organizations will be warned for the following acts:

• If the invoice is not issued at the right time, but does not lead to a delay in the implementation of tax obligations of the organization or individual and there are mitigating circumstances;
• If invoices are issued continuously from small to large numbers but in different books (using the book with the larger serial number and not using the book with the smaller serial number) and when it is discovered that the organization or individual has destroyed the invoice books with the smaller serial numbers;
• If an incorrect invoice is issued according to regulations and has been delivered to the buyer or declared for tax, the seller and buyer discover that the wrong type of invoice has been issued and the invoice is reissued according to regulations before the competent tax authority announces the decision to inspect and examine at the taxpayer’s headquarters, it will not affect the determination of tax obligations;
• Cancel or destroy invoices after 1-5 working days from the date of expiration of the invoice cancellation or destruction deadline according to regulations, with mitigating circumstances;
• Submitting notices and reports on invoices that are overdue from 1 to 5 days from the prescribed deadline with mitigating circumstances;
• If the issued invoice (except for the copy given to the customer) is lost or damaged during the process of using the invoice for which tax has been declared and paid, and there are documents to prove the purchase and sale of goods and services but there are mitigating circumstances;
• If the incorrectly created or deleted invoice is lost, burned or damaged, the seller must create another invoice to replace the incorrectly created or deleted invoice.

>> See more: How to determine when to issue an electronic invoice (many cases).

2. Fine from 500,000 VND to 1,500,000 VND

Individuals and organizations shall be fined from VND 500,000 to VND 1,500,000 for the following acts:

• Submit an invoice notification to adjust the information in the invoice issuance notification to the tax authority when changing the business address leading to a change in the tax authority or when changing the name after 10 – 20 days from the date of starting to use the invoice at the new address or starting to use the invoice with the new name;
• Submit a list of unused invoices of organizations and individuals to the tax authority where they move to when the business address has changed, leading to a change in the directly managing tax authority, within 10-20 days from the date of starting to use the invoices of the organization or individual at the new address;
• Using invoices that have been notified of issuance to the tax authority, but have not yet reached the expiration date;
• Not making a consolidated invoice according to the law for invoices for selling goods and providing services;
• Do not issue invoices for goods and services used for promotion, advertising, samples, goods and services used for giving, presenting, exchanging, or paying in lieu of wages to employees, except for goods circulated internally or consumed internally to continue the production process.

See also:

>> Regulations on issuing invoices for gifts;

>> Regulations on declaration and deduction of VAT on gifts.

3. Fine from 1,000,000 VND to 3,000,000 VND

Individuals and organizations shall be fined from VND 1,000,000 to VND 3,000,000 for the following acts:

• Submit notices and reports on invoices that are overdue from 1 to 10 days from the date of expiration as prescribed, except for the case specified in Clause 1, Article 29 of Decree 125/2020/ND-CP;
• Incorrect invoice issuance or incomplete invoice notification and reporting as prescribed to tax authorities.

Note:

In case an organization or individual discovers an error and re-issues a notice or report in accordance with regulations and sends it to the tax authority before the tax authority and competent authority issue a decision to conduct a tax inspection and tax examination at the taxpayer’s headquarters, they will not be penalized.

4. Fine from 2,000,000 VND to 4,000,000 VND

Individuals and organizations shall be fined from VND 2,000,000 to VND 4,000,000 for the following acts:

• If the tax authority discovers and issues a written notice of invoice issuance that does not contain full content as prescribed, and knows to adjust it but has not adjusted it before issuing the invoice and delivering it to the customer;
• Not posting invoice issuance notice as prescribed;
• Submit notification and adjust invoice information in the invoice issuance notification to the direct tax authority when changing the business location and leading to a change in the direct tax authority or when changing the name after 21 days or more from the date of starting to use the invoice of the new address or starting to use the invoice with the new name;
• Submit a list of unused invoices to the tax authority in charge of the new location and when changing the business address leading to a change in the direct tax authority within 21 days or more from the date of starting to use VAT invoices at the new address;
• Illegal cancellation of issued but not yet created invoices and invoices that are no longer valid;
• Do not cancel VAT invoices that have been issued but not yet created, are no longer valid, and do not cancel invoices purchased from tax authorities that have expired;
• Cancel and destroy invoices that are overdue from 1 to 10 working days from the date of expiration of the deadline for canceling and destroying invoices according to regulations, except for the case specified in Clause 1, Article 27 of Decree 125/2020/ND-CP.

>> See more: What is VAT and instructions on how to calculate VAT.

5. Fine from 2,000,000 VND to 5,000,000 VND

Individuals and organizations shall be fined from VND 2,000,000 to VND 5,000,000 for the act of: transferring electronic invoice data to tax authorities 1 – 5 working days past the deadline, from the prescribed deadline date.

6. Fine from 3,000,000 VND to 5,000,000 VND

Individuals and organizations shall be fined from VND 3,000,000 to VND 5,000,000 for the following acts:

• Invoicing at the wrong time but not leading to late tax payment and except for the cases specified in the warning penalty level (above);
• Losing, burning, or damaging an invoice (copy given to the customer) during use, the seller has declared and paid taxes, has records and documents proving the purchase and sale of goods and services, and has mitigating circumstances.

Note:

In case the buyer loses, burns or damages the invoice, there must be a record of the incident between the seller and the buyer.

7. Fine from 4,000,000 VND to 8,000,000 VND

Individuals and organizations shall be fined from VND 4,000,000 to VND 8,000,000 for the following acts:

• Issuing sales invoices at the wrong time according to the provisions of law on invoices for the sale of goods and provision of services, except for the cases specified in Point a, Clause 1, Clause 3, Article 24 of Decree 125/2020/ND-CP;
• Making sales invoices not in ascending order as prescribed, except in cases of warning according to Point b Clause 1 Article 24 Decree 125/2020/ND-CP;
• Issue sales invoices with dates on them before the date of purchase of the tax authority’s invoices;
• Making the wrong type of invoice in accordance with the provisions of law on invoices for the sale of goods and provision of services, delivered to the buyer or declared for tax, except for the case of warning penalty according to Point c Clause 1 Article 24 Decree 125/2020/ND-CP;
• Making electronic invoices without approval notice from tax authorities or before the date tax authorities accept the use of electronic invoices with or without tax authority codes;
• Issue invoices for the sale of goods and services during the period of temporary suspension of business operations, except for invoices that must be delivered to customers to perform contracts signed before the date of notification of temporary suspension of business operations;
• Generate electronic invoices from cash registers without connection and transfer electronic data of tax authorities;
• Declaring lost, burned or damaged invoices 6 days or more after the deadline for declaration as prescribed;
• Failure to declare lost, burned or damaged invoices;
• Losing, burning, or damaging invoices that have been issued or purchased from the tax authority but have not been created;
• Loss, burning, or damage of an invoice (copy given to the customer) during use, the seller has declared and paid taxes, and has records, documents, and vouchers proving the purchase and sale of goods and services:
  • In case the buyer loses, burns or damages the invoice declared to the tax authority, there must be a record of the incident between the seller and the buyer;
  • In case of loss, burning or damage of an invoice that has been issued but not declared to the tax authority, the relevant organization or individual must make a record of the loss, burning or damage of the invoice (in accordance with current regulations, adding the act of losing, burning or damaging an invoice that has been issued but not declared to the tax authority).
• Cancel and destroy invoices that are 11 working days or more past the deadline, from the date of expiration of the deadline for canceling and destroying invoices according to regulations;
• Do not cancel or destroy invoices according to the provisions of law;
• Do not cancel electronic invoices when errors are made and the tax authority has expired the deadline to notify the seller about the error check;
• Do not cancel printed invoices that have not been issued but are no longer in use according to regulations;
• Cancellation and destruction of invoices not in accordance with legal procedures;
• Destroy invoices that are not in accordance with the law.

8. Fine from 5,000,000 VND to 8,000,000 VND

Individuals and organizations shall be fined from VND 5,000,000 to VND 8,000,000 for the following acts:

• When transferring electronic invoice data to the tax authority after the deadline of 6 – 10 working days from the date of expiration of the legal deadline;
• When transferring the electronic invoice data summary table but the number of invoices created during the period is not complete.

9. Fine from 5,000,000 VND to 10,000,000 VND

Individuals and organizations shall be fined from VND 5,000,000 to VND 10,000,000 for the following acts: losing, burning, or damaging invoices that have been created and declared for tax payment during use or during storage.

>> See more: Penalty for lost invoice.

10. Fine from 5,000,000 VND to 15,000,000 VND

Individuals and organizations shall be fined from VND 5,000,000 to VND 15,000,000 for the following acts:

• Submitting notices and reports on invoices to tax authorities 91 days or more after the prescribed deadline;
• Failure to submit notices and reports on invoices to tax authorities as prescribed.

11. Fine from 6,000,000 VND to 18,000,000 VND

Organizations and individuals who do not make a notification of VAT invoice issuance before the invoice is put into use if these invoices are associated with economic activities that have been declared and paid taxes or have not yet reached the deadline for declaring and paying taxes as prescribed will be subject to penalties according to the provisions of Article 28 of Decree 125/2020/ND-CP or Article 16, Article 17, Chapter II of Decree 125/2020/ND-CP.

12. Fine from 10,000,000 VND to 20,000,000 VND

Individuals and organizations shall be fined from VND 10,000,000 to VND 20,000,000 for the following acts:

• Not issuing invoices when selling goods and providing services to buyers as prescribed, except for the acts specified in Point b Clause 2 Article 24 Decree 125/2020/ND-CP;
• Submitting electronic invoice data to the tax authority 11 working days or more past the deadline, from the date of expiration of the prescribed deadline;
• Failure to submit electronic invoice data to tax authorities within the prescribed time limit.

13. Fine from 20,000,000 VND to 50,000,000 VND

Individuals and organizations shall be fined from VND 20,000,000 to VND 50,000,000 for acts of using illegal invoices and illegally using invoices as prescribed in Article 4 of Decree 125/2020/ND-CP, except for the cases prescribed in Point d Clause 1 Article 16 and Point d Clause 1 Article 17 of Decree 125/2020/ND-CP.

VI. Frequently asked questions when handling administrative violations regarding invoices