“Invoice” is a document prepared by a seller, which records information on sales and service provision in accordance with law. This article discusses the content of sanctions when the buyers "use illegal invoices" and "illegally use invoices".

THE USE OF ILLEGAL INVOICES

"The use of illegal invoices" refers to the use of invoices that have no legal validity, or have expired, or do not comply with the regulations on invoices as prescribed by law. A common term for these invoices is "fake invoices". In practice, accountants often face with the following cases:

• Fake invoices with the arising economic transactions are fake.
• Fake invoices with the arising economic transactions are real.
• Fake invoices with the arising economic transactions are partly real and partly fake.

THE ILLEGAL USE OF INVOICES

"The illegal use of invoices" refers to the use of legal invoices with the arising economic transactions are fake. It can be said that "real invoices with fake content". In practice, accountants often face with the following cases:

• Real invoices with the arising economic transactions are fake.
• Real invoices with the arising economic transactions are partly real and partly fake.
• Real invoices with no complying with the issuance regulations, or the recording regulations of the criteria on the invoices, or using the invoices of the selling enterprises in violation of the law, according to the notice of the tax authorities, police agencies.

Depending on the extent of the behavior of "the use of illegal invoices" or "the illegal use of invoices", the law will apply different sanctions.

THE SANCTIONS FOR THE USE OF ILLEGAL INVOICES

There are two Codes of sanctions:

• One is: Sanctions according to the regulations on administrative management of Taxes and Invoices.

• Two is: Sanctions according to the Criminal Law.

The following is a detailed content of the sanction level of each Code.

One: Sanctions according to the regulations on administrative management of Taxes and Invoices.

There are 3 sanction situations as follows:

1. Sanctions for “The behavior of use”
2. Sanctions for “The behavior of false declaration”
3. Sanctions for “The behavior of tax evasion”

Important Note!!! IF the tax payers already are sanctioned under the act of false declaration or the act of tax evasion, the tax payers will not be sanctioned under the act of use illegal invoices/illegal use of invoices.

THE SITUATIONS RELATING TO THE USE OF ILLEGAL INVOICES

Situation 1: The behavior, which is determined as the use of illegal invoices, the illegal use of invoices, is fined between 20 million dong and 50 million dongs.

Situation 2: The behavior, which is determined as false declaration leading to a lack of tax payable or an increase in the amount of tax exempted, reduced or refunded, is related to 3 cases:

• Case 1: If the tax authority conducts inspection and detects this violation and the buyer can prove the violation of using illegal invoices and documents belonging to the seller, the buyer will be fined 20% of the insufficient tax amount or the higher exempted, reduced or refunded tax amount and the buyer have to pay the late payment of tax.
• Case 2:  If the statute of limitations for sanctioning is exceeded or the buyer discovers it himself, and has made the adjustment declaration before the tax authority issues an inspection decision, and has fully paid the insufficient tax amount, the higher exempted, reduced or refunded tax amount and the late payment of tax, the buyer will NOT be fined 20%.
• Case 3: If the taxpayer makes false declarations but do NOT lead to a lack of tax payable or an increase in the amount of tax exempted, reduced, or not yet refunded, the taxpayer will NOT be fined 20%, but will be fined from 05 million dongs to 08 million dongs.

Situation 3: The behavior, which is determined as the behavior of tax evasion.

In this situation, the tax authority will conduct the evaded tax arrears, and a fine from ONE to THREE times the evaded tax.

Two: Sanctions according to the provisions of the Criminal Code 2015 (amended and supplemented in 2017)

There are two factors in consider criminal offenses in the Criminal Code:

• One: Regarding quantitative in criminal consideration:
  • For individuals, If the amount of tax evasion is 100 million dongs or more, the behavior will be considered a criminal violation. If the amount of tax evasion is less than 100 million dongs, qualitative factors will be considered together.
  • For organizations, If the amount of tax evasion is 200 million dongs or more, the behavior will be considered a criminal violation. If the amount of tax evasion is from 100 million dongs to less than 200 million dongs, qualitative factors will be considered together.

• Two: Regarding qualitative in criminal consideration: Qualitative factors include repeated offenses, current penalties related to invoices or economic crimes related to taxes, currency, smuggling; organized and professional fraud; abuse of position and power to use invoices to embezzle or corrupt state property.

The penalty frame in the Criminal Code is as follows:

Monetary fine:

• For individuals, the fine can be from 100 million dongs to 4.5 billion dongs.
• For organizations, the fine can be from 300 million dongs to 10 billion dongs.

Imprisonment:

• For individuals, the prison term can be from 3 months to 7 years.
• For organizations, the organization can be suspended from operations for a term of 6 months or permanently suspended.