Who must pay taxes? corporate income? Is there a penalty for not paying corporate income tax?

Who must pay corporate income tax?

Pursuant to Clause 1, Article 2 of the 2008 Corporate Income Tax Law, taxpayers are specified as follows:

– Enterprises The enterprise is established according to the provisions of Vietnamese law;

– Enterprises established under foreign laws (hereinafter referred to as foreign enterprises) with or without permanent establishments in Vietnam;

– Organizations established under the Cooperative Law;

– The public service unit is established according to the provisions of Vietnamese law;

– Other organizations with production and business activities that generate income.

Thus, if you are an enterprise established according to the law, you are required to pay corporate income tax. Except for cases prescribed for incentives, tax exemptions and reductions in Article 15 and Article 16 of Decree 218/2013/ND-CP, you can refer to this for more information.

According to Article 143 of the Law on Tax Administration 2019, tax evasion is regulated as follows:

– Failure to submit tax registration documents; failure to submit tax returns; Submit tax declaration documents 90 days after the deadline for submitting tax declaration documents or the date of expiration of the extension period for submitting tax declaration documents according to the provisions of this Law.

– Failure to record in accounting books revenues related to determining the amount of tax payable.

– Do not issue invoices when selling goods or services according to the provisions of law or write a value on the sales invoice lower than the actual payment value of the goods or services sold.

– Using illegal invoices and documents, illegally using invoices to account for goods and input materials in activities that generate tax obligations, reducing the amount of tax payable or increasing the amount of tax exempted, the amount of tax to be reduced or increasing the amount of tax to be deducted, the amount of tax to be refunded, the amount of tax not payable.

– Using vouchers and documents that do not accurately reflect the nature of the transaction or the actual transaction value to incorrectly determine the amount of tax payable, the amount of tax to be exempted, the amount of tax to be reduced, the amount of tax to be refunded, the amount of tax not payable.

– Declaring incorrectly the actual export or import goods without supplementing the tax declaration dossier after the goods have been cleared from customs.

– Intentionally not declaring or declaring incorrectly taxes on exported or imported goods.

– Colluding with shippers to import goods for the purpose of tax evasion.

– Using goods that are not subject to tax, tax exemption, or tax exemption consideration for improper purposes without declaring the change of use purpose to the tax administration agency.

– Taxpayers have business activities during the period of suspension or temporary suspension of business activities but do not notify the tax administration agency.

– Taxpayers are not sanctioned for tax evasion but are sanctioned according to the provisions of Clause 1, Article 141 of this Law for the following cases:

+ Failure to submit tax registration documents, failure to submit tax declaration documents, submission of tax declaration documents after 90 days but no tax amount due;

+ Submit the tax declaration after 90 days of the tax payable and the taxpayer has paid the full amount of tax and late payment interest to the state budget before the tax authority announces the decision on tax audit or tax inspection or before the tax authority makes a record of the late submission of tax return.

Thus, not paying taxes is considered tax evasion. And will be punished for that tax evasion.

What is the penalty for tax evasion?

According to Article 17 of Decree 125/2020/ND-CP stipulating penalties for tax evasion as follows:

+ A one-time fine for the amount of tax evaded shall be imposed on taxpayers who have one or more extenuating circumstances when committing one of the following violations:

– Failure to submit tax registration documents; Failure to submit a tax declaration or submitting a tax declaration after 90 days from the expiration date of the tax declaration submission deadline or from the expiration date of the tax declaration submission extension, except for the cases specified in Points b and c, Clause 4 and Clause 5, Article 13 of this Decree;

– Failure to record in the accounting books revenues related to determining the amount of tax payable, failure to declare, incorrect declaration leading to a lack of tax amount payable or an increase in the amount of tax refunded, exempted, or reduced, except for the acts specified in Article 16 of this Decree;

– Do not issue invoices when selling goods or services, unless the taxpayer has declared tax on the value of goods and services sold or provided in the corresponding tax period; Making sales invoices for goods and services that are incorrect in quantity and value of goods and services to declare taxes lower than actual ones and discovered after the tax declaration submission deadline;

– Using illegal invoices; Illegally using invoices to declare taxes reduces the amount of tax payable or increases the amount of tax refunded, the amount of tax exempted or reduced;

– Using illegal documents; Illegal use of documents; Using vouchers and documents that do not accurately reflect the nature of the transaction or the actual transaction value to incorrectly determine the amount of tax payable, the amount of tax exempted, reduced, or the amount of tax refunded; Prepare procedures and documents for destruction of supplies and goods that are incorrect, reducing the amount of tax payable or increasing the amount of tax refunded, exempted, or reduced;

– Using goods that are not subject to tax, tax exemption, or tax exemption consideration for improper purposes without declaring the change of use purpose or declaring tax to the tax authority;

– The taxpayer has business activities during the period of request to stop or temporarily suspend business activities but does not notify the tax authority, except for the case specified in Point b, Clause 4, Article 10 of this Decree.

+ A fine of 1.5 times the amount of tax evaded shall be imposed on taxpayers who commit one of the acts specified in Clause 1 of this Article without aggravating or mitigating circumstances.

+ A fine of 2 times the amount of tax evaded shall be imposed on taxpayers who commit one of the acts specified in Clause 1 of this Article with an aggravating circumstance.+ A fine of 2.5 times the amount of tax evaded shall be imposed on taxpayers who commit one of the acts specified in Clause 1 of this Article with two aggravating circumstances.

+ A fine of 3 times the amount of tax evaded shall be imposed on taxpayers who commit one of the acts specified in Clause 1 of this Article with three or more aggravating circumstances.

+ Remedial measures:

– Forced to pay the full amount of evaded tax into the state budget for violations specified in Clauses 1, 2, 3, 4, 5 of this Article.

In case tax evasion as prescribed in Clauses 1, 2, 3, 4, 5 of this Article has passed the statute of limitations, the taxpayer will not be fined for tax evasion, but the taxpayer must pay the full amount of tax evasion and late payment interest calculated on the amount of tax evasion into the state budget according to the time limit specified in Clause 6, Article 8 of this Decree.

– Forced adjustment of losses and deductible input value-added tax amounts on tax records (if any) for actions specified in Clauses 1, 2, 3, 4, 5 of this Article.

– Violations specified in Points b, dd, e, Clause 1 of this Article that are discovered after the tax declaration submission deadline but do not reduce the amount of tax payable or have not been refunded, or do not increase the amount of tax exempted or reduced, shall be subject to administrative sanctions according to the provisions of Clause 3, Article 12 of this Decree.

In addition, based on Clause 5, Article 200 of the 2015 Penal Code (amended by Point b, Clause 47, Article 1 of the Law amending the Penal Code 2017), regulations on commercial legal entities committing tax evasion are as follows:

+ Committing one of the acts specified in Clause 1 of this Article, evading tax with an amount of from 200,000,000 VND to under 300,000,000 VND or from 100,000,000 VND to under 200,000,000 VND but has been administratively sanctioned for tax evasion or has been convicted of this crime or one of the crimes specified in the articles. 188, 189, 190, 191, 192, 193, 194, 195 and 196 of this Code, if the criminal record has not been erased but is still violated, shall be fined from 300,000,000 VND to 1,000,000,000 VND;

+ Committing a crime in one of the cases specified in Points a, b, d and dd, Clause 2 of this Article, shall be fined from 1,000,000,000 VND to 3,000,000,000 VND;

+ Committing a crime in the case specified in Clause 3 of this Article, the person shall be fined from 3,000,000,000 VND to 10,000,000,000 VND or suspended from operations for a period of 06 months to 03 years;+ Committing a crime in the case specified in Article 79 of this Code, the operation will be permanently suspended;

+ Commercial legal entities may also be fined from 50,000,000 VND to 200,000,000 VND, banned from doing business, banned from operating in certain fields or banned from raising capital from 01 year to 03 years.”.

According to the above legal regulations, tax evasion is a crime. An individual or legal entity committing a crime will be subject to sanctions.