Clarifying concept “incorrect information” in handling administrative violation in customs field

VCN – To help Customs Departments of provinces and cities have a basis for implementation as well as to guide enterprises when fulfilling customs procedures to avoid errors, the General Department of Vietnam Customs has given instructions on removing obstacles arising in the implementation of Decree 128/2020/ND-CP (referred to as Decree 128) stipulating on handling administrative violations in the field of customs related to the issue of "incorrect information".
5645-4031-12-0830-7-2858-img-8159
Customs officials of Cau Treo Customs Branch (Ha Tinh Customs Department) supervised and checked imported goods. Photo: H.Nụ

In the process of implementing Decree 128 from practice, several customs departments of provinces and cities encountered difficulties when implementing the provisions of Point b, Clause 1, Article 8 of Decree 128. Customs Departments of provinces and cities wondered in case of dossiers inspection but before conducting physical inspection of goods, the enterprise made a declaration on changing quantity, name, type, quality, and customs value, origin, code of goods, so, should a firm be sanctioned for administrative violations under Decree 128?

Besides that, in the case that the Customs Branch issues a notice of stopping taking goods through customs supervision area for conducting physical inspection, after the time of issuing notification about stopping taking goods through the customs supervision area, an enterprise makes a declaration for amending and supplementing information about goods name, type, quality, customs value, origin, and the code of imported goods subject to tax without affecting to the tax payable before the time of conducting a physical inspection. Will the company be sanctioned in this case?

With the above problems, the customs departments of the provinces and cities called for guidance and clarification of the concept of "doesn't affect the payable tax amount". In case of the incorrect information of quantity, name of goods, types, quality, customs value, origin, code of import goods subject to tax, resulting in an excess of payable tax or a reduction, exemption, refund in payable tax or not collected. Did it subject to manage as stated in the regulation?

Customs departments of the provinces and cities also gave examples. An X company imported Y item, declare a quantity of 100 units. Goods subject to tax with import tariff rate was 5%, VAT 5%. The amount of tax that needed to be paid was VND 20 million. However, in fact, imported goods were only 50 units and the amount of tax paid by enterprises was VND 10 million. Therefore, the incorrect information of the quantity of company X led to an excess of the payable tax amount. Thus, whether company X violated the regulations on incorrect information and the number of import goods was subject to tax but does not affect the payable tax amount or not?

In response to this question, according to the General Department of Vietnam Customs, in Clause 12, Article 4, Clause 2, Article 10, Point c, Clause 2, Article 18, and Clause 1, Article 29 of the Law on Customs stipulates that the customs declarant must be responsible for declaring accurately imported goods.

Also in the Law on Customs and the provisions of Circular 38/2015/TT-BTC, as amended and supplemented in Circular No. 39/2018/TT-BTC, the Customs authority should inspect and determine whether it is a violating regulation or not and handle violations in accordance with the provisions of law. Cases of making additional declaration outside the prescribed time limit would be sanctioned.

The phrase "incorrect information" specified at Point b, Clause 1, Article 8 of Decree 128 is inherited from Decree 127/2013/ND-CP (point a, Clause 2, Article 7 - violating regulations on customs declaration) and Decree 45/2016/ND-CP amending and supplementing Decree 127/2013/ND-CP (clauses 1, 2, Article 7- violating regulations on customs declaration). The phrase "without affecting the tax payable" is a sign to distinguish from acts specified at Point b, Clause 1, Article 8 from the acts of violations affecting the tax payable in Article 9, Article 14 of Decree 128.

The General Department of Vietnam Customs stated that incorrect information affecting payable tax (including cases of incorrect information leading to a lack of payable tax or an increase in the amount of tax exemption, reduction, refund, tax evasion) will be sanctioned in accordance with the provisions of Article 9, Article 14 of Decree 128. Regarding cases of incorrect information but not affecting the payable tax under Point b, Clause 1, Article 8 of Decree 128, General Department of Vietnam Customs suggested the Customs Departments of provinces and cities should base on the above provisions to understand and handle violations in accordance with regulations and case dossiers.

The Customs Departments of provinces and cities said in the process of implementing the provisions of Decree 128, some units claimed they were facing difficulties in applying the provisions of Clause 5, Article 9 of Decree 128 and Clause 5, Article 10 of Decision No. 166/QD-TCHQ. Clause 5, Article 9 of Decree 128 stipulates: "Implementation of sanctions as prescribed in Clauses 1, 2 and 3 of this Article only applies in case the tax amount is different from VND500,000/customs declaration for violations committed by individuals, from VND 2,000,000/customs declaration for violations committed by organisations”. Clause 5, Article 10 of Decision No. 166/QD-TCHQ dated January 18, 2021 stipulates: “Basis for determining the tax difference for violations specified in Article 9, Article 14 of Decree 128 is the tax amount declared by the taxpayer and the payable tax as shown in the tax assessment decision of the competent person or the tax payable as prescribed.

With these two provisions, many opinions arise. Firstly, the tax difference for the violations specified in Article 9, Article 14 of Decree 128 is calculated on the customs declaration (the total tax amount of the goods in the declaration, including the goods that are declared incorrectly in the customs declaration resulted in a lack of tax payable, and incorrect information led to an excess of payable tax). Secondly, tax difference for violations specified in Article 9, Article 14 of Decree 128 is calculated for items of goods declared incorrectly by enterprises, leading to a lack of tax payable.

Some units gave practical examples, company X import two items. Item one, company X declared incorrectly the amount, leading to a lack of tax payable of VND 50 million, and in item two, company X declared the quantity incorrectly, resulting in a tax excess of VND 50 million.

Some stated that the difference in tax amount on the customs declaration is 0 VND. The reason was that, according to Clause 5, Article 9, there was no penalty for company X for making incorrect declarations in quantity, leading to a lack of payable tax. However, many said that company X made an incorrect declaration of quantity, leading to a lack of tax payable for item one and sanctioning company X for this violation.

Regarding this problem, the General Department of Vietnam Customs said that the provisions of Article 9 of Decree 128 (including Clause 5) were applied to violations of regulations on tax declaration leading to lack of payable tax or increase the amount of tax exemption, reduction, refund. In other cases of incorrect declaration (did not understate the payable tax, did not increase the amount of tax exemption, reduction, refund), the provisions of Article 9 of Decree 128 would apply.

By Nụ Bùi/Thanh Thuy

Related News

Consulting on customs control for e-commerce imports and exports

Consulting on customs control for e-commerce imports and exports

VCN- The General Department of Vietnam Customs (GDVC) consults widely on the draft Decree regulating customs control for e-commerce imports and exports.
Customs administrations coordinate to seize nearly 20,000 endangered wildlife

Customs administrations coordinate to seize nearly 20,000 endangered wildlife

VCN – About 20,000 live animals, all endangered or protected species, have been seized in a global operation against wildlife and forestry trafficking networks, jointly coordinated by the World Customs Organization (WCO) and INTERPOL.
Hai Phong Customs sets out 15 tasks to achieve the revenue target of VND 72,000 billion

Hai Phong Customs sets out 15 tasks to achieve the revenue target of VND 72,000 billion

VCN – Hai Phong Customs Department has issued Directive No. 624/CT-HQHP dated January 21, 2025 on drastically implementing solutions to facilitate trade, improve the effectiveness of state management, and strive to achieve the revenue target of 2025.
GDVC sets goal of widely disseminating Customs policies

GDVC sets goal of widely disseminating Customs policies

VCN – The General Department of Vietnam Customs (GDVC) has issued a plan to disseminate and educate the law; and support and provide information in 2025.

Latest News

Flexible tax policy to propel Việt Nam’s economic growth in 2025

Flexible tax policy to propel Việt Nam’s economic growth in 2025

The Vietnamese government has extended and enhanced tax relief for 2025, offering reductions and deferrals to boost economic growth.
Brandnew e-commerce law to address policy gaps

Brandnew e-commerce law to address policy gaps

The proposed law seeks to address gaps in existing regulations and keep pace with technological advancements and evolving business models.
From January 1, 2025: 13 product codes increase export tax to 20%

From January 1, 2025: 13 product codes increase export tax to 20%

VCN - According to the Export Tariff (XK) issued with Decree 26/2023/ND-CP, from January 1, 2025, there will be 13 commodity codes with an export tax rate of 20%.
Export tax rates of 13 commodity codes to increase to 20% from January 1, 2025

Export tax rates of 13 commodity codes to increase to 20% from January 1, 2025

VCN – According to the Export Tariff issued with Decree 26/2023/ND-CP, the tax rates of 13 commodity codes will increase to 20% from January 1, 2025.

More News

Proposal to reduce 30% of land rent in 2024

Proposal to reduce 30% of land rent in 2024

VCN - The Ministry of Finance has finalized a draft Government Decree outlining the reduction of land rent for 2024. The draft is currently under review by the Ministry of Justice before being submitted to the Government for approval.
Resolve problems related to tax procedures and policies for businesses

Resolve problems related to tax procedures and policies for businesses

VCN - Immediately after the end of the Dialogue Conference between the Ministry of Finance and enterprises on tax and customs policies and administrative procedures in 2024, the General Department of Customs proactively removed obstacles related to tax procedures and policies for the business community.
New regulations on procurement, exploitation, and leasing of public assets

New regulations on procurement, exploitation, and leasing of public assets

VCN - Decree No. 114/2024/ND-CP, which amends and supplements certain articles of Decree No. 151/2017/ND-CP detailing the implementation of the Law on Management and Use of Public Assets, introduces significant changes. These include updates on authority, methods of asset exploitation in agencies and units, plans for leasing, joint ventures, and partnerships in public service units, as well as centralized procurement procedures.
Actively listening to the voice of the business community

Actively listening to the voice of the business community

VCN - Recognizing the Customs-business relationship as a long-term partnership, the Customs authority has organized hundreds of dialogues with businesses since the beginning of the year. These efforts aim to promptly address challenges, resolve obstacles, and facilitate import-export activities. Such meetings offer an opportunity for the Customs authority and the business community to exchange, share insights, and find solutions to enhance operational quality and efficiency.
Step up negotiations on customs commitments within the FTA framework

Step up negotiations on customs commitments within the FTA framework

VCN - Promoting negotiations on customs commitments within the framework of free trade agreements (FTAs) plays an important role in facilitating import and export activities. These commitments not only help optimize the customs clearance process but also minimize costs and risks for businesses, opening up great opportunities for Vietnamese goods to access deeper into the international market.
Proposal to amend regulations on goods circulation

Proposal to amend regulations on goods circulation

VCN - To perfect the policy on customs procedures, inspection and supervision, enterprises and associations have contributed many ideas from practical activities. Thereby, the Drafting Committee (General Department of Customs) has more perspectives to build policies to meet the goal of facilitating trade and ensuring state management of customs.
Review of VAT exemptions for imported machinery and equipment

Review of VAT exemptions for imported machinery and equipment

VCN - The General Department of Vietnam Customs has directed provincial and municipal customs departments to review, inspect, and address issues related to the implementation of VAT exemption policies for specialized machinery and equipment used in agricultural production.
Customs tightens oversight on e-commerce imports

Customs tightens oversight on e-commerce imports

VCN - The General Department of Vietnam Customs has issued new directives to enhance the management of imported goods transacted through e-commerce platforms, addressing ambiguities and ensuring consistent enforcement across provincial and municipal customs departments.
Bringing practical experience into customs management policy

Bringing practical experience into customs management policy

VCN - At the workshop to collect opinions from Southern Customs units on the draft Decree amending and supplementing Decree 08/2015/ND-CP dated January 21, 2015 of the Government; the draft Circular amending and supplementing Circular 38/2015/TT-BTC dated March 25, 2015 and Circular 39/2018/TT-BTC dated April 20, 2018 of the Minister of Finance, organized by the General Department of Customs last weekend, many Southern Customs units contributed specific contents from practical operations in the locality.
Read More

Your care

Latest Most read
Consulting on customs control for e-commerce imports and exports

Consulting on customs control for e-commerce imports and exports

VCN - The Decree provides regulations on inspection and specialized management for e-commerce imports and exports; electronic customs data processing system for e-commerce imports and exports.
Flexible tax policy to propel Việt Nam’s economic growth in 2025

Flexible tax policy to propel Việt Nam’s economic growth in 2025

The Vietnamese government has extended and enhanced tax relief for 2025, offering reductions and deferrals to boost economic growth.
Brandnew e-commerce law to address policy gaps

Brandnew e-commerce law to address policy gaps

The proposed law seeks to address gaps in existing regulations and keep pace with technological advancements and evolving business models.
From January 1, 2025: 13 product codes increase export tax to 20%

From January 1, 2025: 13 product codes increase export tax to 20%

VCN - According to the Export Tariff (XK) issued with Decree 26/2023/ND-CP, from January 1, 2025, there will be 13 commodity codes with an export tax rate of 20%.
Export tax rates of 13 commodity codes to increase to 20% from January 1, 2025

Export tax rates of 13 commodity codes to increase to 20% from January 1, 2025

VCN - 13 commodity codes with export tax rates increased to 20% from January 2025 include:
Mobile Version