Businesses fined for misdeclaration

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Ho Chi Minh City Customs officers inspect imports goods. Illustrative photo: T.H

Getting rid of criminal charges thanks to proactive tax declaration and payment

On January 25, 2024, Saigon Port Area 1 Customs Branch issued 2 decisions to sanction administrative violations against Company P. (Thu Dau Mot City, Binh Duong Province) with a fine of VND266 million, equal to 20% of the missing tax amount of two declarations.

Previously, P. Co., Ltd. registered two customs declarations to import JIS G 3321 alloy steel. Physical inspection and inspection results according to the inspection certificate determined that the imported goods were alloy steel, containing Boron as the only alloy according to current import-export tariff regulations, flat rolled, cold rolled, rolled, surface coated with hot-dip aluminum-zinc alloy. With this result, the Customs agency determined that the company had incorrectly declared the type of goods and commodity codes for the line items on the declaration. The HS code of the two declarations mentioned above is determined to be 9811.00.10, import tax rate is 10%. P. Ltd. proactively declared additional changes in types, tax rates, and HS codes for the two shipments.

With the above mentioned violations, the Customs agency has made an administrative violation record against the company for misdeclaration of HS codes, tax rates, and categories, leading to a lack of tax payable to the Customs agency worth more than VND1.3 billion.

Determining that the case had signs of a criminal violation, the Saigon Port Area 1 Customs Branch sent an official dispatch to the People's Procuracy of Thu Duc City, Ho Chi Minh City to discuss and request consideration of criminal signs.

Responding to the official dispatch, the People's Procuracy of Thu Duc City said that P. Ltd had the act of misdeclaring type of goods, leading to missing tax payable. This act shows signs of "tax evasion". However, after the Customs authorities discovered the violation, the Company proactively cooperated and declared additional tax and paid the full tax amount according to regulations. On the other hand, P.Ltd has never been handled for administrative violations. Therefore, the acts of P. Ltd. Company are not enough grounds for criminal prosecution, so the People's Procuracy of Thu Duc City transferred the case to the Customs agency for administrative handling.

Additional declaration after clearance audit

Similar to the above case, on April 5, 2024, Saigon Port Area 1 Customs Branch issued Decision No. 56/QD-XPHC to sanction F International Trading Investment JSC (Dong Da - Hanoi), with a fine of VND205 million (equal to 20% of the misdeclared corporate tax amount).

According to the case file, F. International Trade Investment JSC registered to open 62 import customs declarations under type A11 (import for consumer business) to import goods reported as massage chairs (many different models), made in China. According to the declaration, the company declared a VAT rate of 8% on these items.

However, after the goods passed the customs clearance, F. International Trade Investment JSC transmitted a confirmation of amendments and additions after customs clearance, and declaration of VAT rate adjustments of the massage chairs belong to the 62 customs declarations mentioned above. Accordingly, the company changed VAT rate from 8% to 10%, due to their errors in the process of determining the VAT rate according to Decree 15/2022/ND -CP. In the additional declaration, there is attached a notice from the Hai Phong City Customs Department announcing the results of the post-customs clearance audit, the inspection results determining that F. International Trade Investment JSC made a false declaration of VAT rate (8%) for imported massage chairs. The correct VAT rate is 10%.

After the amendments and supplements of the company to 62 declarations are approved by the leader of the Saigon Port Area 1 Customs Branch, the Customs agency determines the total increased tax payable of 62 declarations is over VND1 billion.

Pursuant to Point a, Clause 1 and Point d, Clause 3, Article 9 of Decree No. 128/2020/ND-CP dated October 19, 2020 of the Government stipulating penalties for administrative violations in the field of customs, the Import Cargo Procedure Team of the branch has made an administrative violation record against F. International Trade Investment JSC regarding the act of importing goods with incorrect VAT declaration, leading to a missing tax payable and the company itself discovered the error and paid the missing tax amount to the Hai Phong Customs Department.

On January 31, 2024, Saigon Port Area 1 Customs Branch issued Decision on sanctioning administrative violations No. 23/QD-XPHC against H. Veterinary Medicine Trading JSC, with a fine of VND40 million and forced to return the value of evidence consumed (domestic trade) of over VND621 million for the act of importing goods that are required to have an import permit but the company did do not provide an import permit for veterinary medicine, drinking water disinfection solution in veterinary medicine.

At the same time, Saigon Port Area 1 Customs Branch also issued Decision on sanctioning administrative violations No. 26/QD-XPHC against H. Veterinary Medicine Trading JSC, with a fine of VND40 million VND for the act of exporting goods that must have an export permit but the company did not provide an export permit for disinfectant solution, and the company was forced to return the value of the evidence that was consumed (exported) of over VND923 million.