I. STRENGTHEN REVIEW OF ELECTRONIC INVOICES

Faced with the increasingly complicated situation of invoice fraud, tax authorities have been promoting information technology application solutions to promptly detect and prevent illegal profiteering acts. Fraudulent forms such as buying and selling unreasonable invoices, using invoices to legalize input costs, tax evasion, or appropriating value-added tax (VAT) refunds are causing huge losses to the state budget. Therefore, the General Department of Taxation has asked relevant units to focus on implementing strict control measures, preventing and strictly handling violations in the field of electronic invoices.

Accordingly, some cases that require special attention during the inspection and supervision process to prevent and combat electronic invoice fraud include:

1. The invoice content is against regulations according to Clause 7, Article 3 and Article 10 of Decree 123/2020/ND-CP.
2. The VAT declaration has been adjusted and supplemented many times, with unusual signs.
3. The additional declaration dossier does not match the additional declaration, explanation and related documents, according to the provisions of Article 47 of the Law on Tax Administration and Point 4, Article 7 of Decree No. 126/2020/ND-CP dated October 19, 2020.
4. Invoices have not been declared for many periods, but then additional declarations are made, causing doubts about the truthfulness of tax reports.

Strengthening inspection and control of the above cases will help promptly detect signs of fraud, contribute to improving tax management efficiency, and ensure transparency in the national financial system. At the same time, the application of information technology in supervision and inspection will help tax authorities be more proactive in detecting new fraudulent acts, protecting the legitimate rights of genuine businesses and creating a fair and healthy business environment.

II. STRENGTHEN CONTROL WHEN ESTABLISHING A BUSINESS 

In recent times, the illegal purchase and sale of invoices has become increasingly sophisticated and complex, causing large losses to the state budget. In 2024, many subjects were discovered and prosecuted for setting up “ghost companies” to illegally buy and sell tens of thousands of invoices with a total value of about 10,000 billion VND. Faced with this situation, the General Department of Taxation has introduced measures to tighten management, including requiring the legal representative of the business to directly verify and appear at the tax authority when registering for initial tax declaration.

According to the new regulations, after completing the procedures for establishing a business, the legal representative is responsible for going directly to the tax department where the head office is located to present and compare the expected operating situation of the business. This is an important step to help tax authorities have a basis to verify the legality and reality of the business before issuing and issuing electronic invoices. This not only contributes to preventing invoice fraud but also helps increase the responsibility of legal representatives in business activities.

Tightening the verification process when establishing a business demonstrates the determination of the authorities in fighting against tax fraud and creating a transparent and fair business environment. Genuine businesses need to understand and comply with this regulation to ensure legal operations, while contributing to building a healthier financial and tax system.

III. PENALTIES FOR TRADING AND SELLING UNAUTHORIZED INVOICES AND USING UNLAWFUL INVOICES

In order to rectify violations in the field of invoices, the State has issued strict legal regulations to handle organizations and individuals that illegally buy and sell invoices and use illegal invoices.

a) Penalties for administrative violations

According to Decree 125/2020/ND-CP (amended by Decree 102/2021/ND-CP), the fine for giving or selling invoices can be from 15 million up to 50 million VND. For illegal use of invoices, the fine ranges from 20 million to 50 million VND, accompanied by remedial measures such as forced cancellation of invoices and return of illegal profits.

In addition, the act of using illegal invoices and documents to evade taxes will be fined from 1 to 3 times the amount of tax evaded, depending on the severity of the violation. Remedies include paying the full amount of evaded tax and adjusting tax records.

b) Criminal prosecution

• Crime of tax evasion: According to Article 200 of the 2015 Penal Code (amended and supplemented in 2017), violators can be fined from 100 million to 500 million VND or imprisoned from 3 months to 7 years. Legal entities may be fined up to 10 billion VND or have their operations suspended from 6 months to 3 years.
• Crime of illegally printing, issuing, buying and selling invoices: According to Article 203 of the Penal Code, violating individuals can be fined from 50 million to 500 million VND or imprisoned from 6 months to 5 years, while legal entities can be fined up to 1 billion VND and have their activities restricted in some areas.

The above regulations demonstrate the strictness of the law in handling violations of invoices, to ensure transparency in tax administration and prevent illegal profiteering.

IV. About Us, Hankuk Law Firm

■ Hankuk Law Firm – Introduction

The goal of the legal services provided by HANKUK LAW FIRM is to support businesses, investors, and people. Our organization employs skilled Korean lawyers, partners, and professionals to provide legal services to businesses related to corporations and litigation.

To support the startup process, our lawyers and staff provide a wide range of services, including business law consulting, tax and immigration law consulting, real estate services, business consulting, marketing and communications, human resources, product distribution, franchise options, etc. We provide expert advice on every aspect of your business needs.

To protect the legitimate rights and interests of our clients and achieve the best results, we provide legal advice and participate in civil lawsuits related to business, labor, marriage, family, and inheritance.

■ Contact us now

For reliable and effective legal advice, please contact HANKUK LAW FIRM now. We are committed to providing you with the best possible answers and our team of experienced lawyers has extensive knowledge in many legal fields. We are always here to provide the most competent and dedicated support, whether you are dealing with contractual issues, commercial disputes or need guidance on foreign investment. HANKUK LAW FIRM is honored to have assisted hundreds of domestic and international clients in skillfully resolving complex legal issues as their trusted legal partner. Do not let legal issues hinder your success. Let us accompany you towards legal achievement and comfort. For prompt guidance and support to ensure your rights are always maintained at the highest standards, contact HANKUK LAW FIRM now.

■ Contact Hankuk Law Firm:

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