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Exposing tax evasion at Viet Dai Company

14:02 | 12/05/2019

VCN - Viet Dai Spare Parts Co., Ltd (headquartered in Ho Chi Minh City) took advantages of loopholes in import-export activities for trade fraud.

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Officials of Huu Nghi Border Gate Customs Branch (Lang Son Customs Department) inspect imported goods. Photo: H.Nu

Declared 3 items but imported 39 items

On January 21, 2019, representatives of Viet Dai Company came to Huu Nghi Border Gate Customs Branch (Lang Son Customs Department) to conduct import procedures. Accordingly, imported goods are declared under three items, namely: 1,000 iron carriages, accessories for 1-wheel motorcycles; 750 sets of car wheels outside diameter from 20 cm to 32 cm; 1,000 sets of iron supports (not including other accessories) of motorcycles.

The shipment is registered to transport on 3 Chinese transport vehicles and then is transferred to 5 Vietnamese transport vehicles. However, through inspection and supervision of imported goods and inspection of import and export goods of Xuan Cuong Co., Ltd. at Huu Nghi international border gate, and collected information, the Customs Monitoring Division (The Customs Department of Huu Nghi border gate) detected the imported goods of Viet Dai Company had signs of violating the customs law. Afterwards, the Huu Nghi Border Gate Customs Branch decided to suspend procedures and inspect.

On January 22, Huu Nghi Border Gate Customs Branch coordinated with the Economic Security Department (Lang Son Provincial Police Department) to inspect goods on 5 vehicles. As a result, the functional force discovered 39 items, instead of 3 items as declared by enterprises.

For further clarification, Huu Nghi Border Gate Customs Branch requested the Customs Inspection Branch No.6 (Customs Inspection Department) to verify the names and types of imported goods. On January 31, the Customs Inspection Branch No.6 announced: Only 2 items were declared with correct name and quantity. However, the declaration of these items’ codes is incorrect. Accordingly, Viet Dai Company declared code of item was 8714.10.30, but the classification of goods showed it was 8714.10.50.

Based on the classification results of the Customs Inspection Branch No.6, Huu Nghi Border Gate Customs Branch determined that the value of imported goods of Viet Dai Company was nearly 2.9 billion VND and the amount of tax was nearly 1.5 billion VND. Viet Dai Company declared on the customs declaration the tax amount of over 45.2 million VND, which lacks of over 1.4 billion dong of tax.

Unclear explanation

According to Mr. Tran Bang Toan, Director of Huu Nghi Border Gate Customs Department, in order to clarify the case, the unit conducted verification. At the meeting with the Customs, Mr. Nguyen Van Thom, Director of Viet Dai Company, said that he was the one who directly met and negotiated with Chinese partners. After his Chinese partner finished the contract and sent to Vietnam, Thom stamped it and returned it to the partner.

Regarding delivery of the shipments, Thom said, from January 20 to noon of January 21, the Chinese partner sent the images of Chinese cars, phone numbers of Chinese drivers, shipments (without images of each items).

Thom confirmed that the quantity of goods in the customs declaration could be transported by 3 Vietnamese tractor trailers, but he did not know the actual situation of goods at the border gate, so he had to load on 5 tractor trailers.

Huu Nghi Border Gate Customs Branch continues to work with Pham Thi Lan Anh (Mr. Thom's wife and accountant of Viet Dai Company). Ms. Lan Anh said, after receiving information from Mr. Thom, she called Mr. Nguyen Xuan Duoc who was hired for transport to arrange vehicles. After checking, Mr. Duoc responded that it needed 6 tractor trailers to transport these shipments. Ms. Lan Anh also informed Mr. Thom. Mr. Thom thought that the goods were bulky, so the number of such vehicles was suitable. However, in fact, these items only filled 5 tractor trailers.

On February 14, Viet Dai Company sent a written explanation to the Huu Nghi Border Gate Customs Branch about the wrong delivery and overcapacity.

According to Mr. Tran Bang Toan, based on the case’s documents and the results of verification and evidence, Huu Nghi Customs realized that Mr. Nguyen Van Thom knew the actual number of goods imported to Vietnam on 3 vehicles that do not match the number of goods declared on the customs declaration. Instead of declaring the excess of the goods, he continued to do the procedures to receive and transport the above goods for tax evasion.

Customs authorities assess that the reason for the wrong loading of the goods that Viet Dai Company has claimed is unreasonable because since the time the violating shipment was discovered and arrested, Viet Dai Company has not submitted any additional documents of the partner showing the wrong delivery. Therefore, the explanation of Viet Dai Company is unreasonable.

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Based on the results of actual inspection and value of evidence, Huu Nghi Customs discussed with Cao Loc District People's Procuracy to agree on the handling plan. Accordingly, it is determined that Viet Dai Company has made customs declaration not in accordance with regulations. Viet Dai Company has deliberately imported the above infringing goods.

Prosecuted criminal case for Viet Dai Company Through the analysis and determination, total value of goods including 39 items of Viet Dai Company was nearly 2.9 billion VND. Accordingly, Viet Dai Company is subject to criminal liability for commercial legal entities stipulated in Clause 1, Article 75 and tax evasion offenses of the Criminal Code (amended and supplemented in 2017). Therefore, after agreeing with the People's Procuracy of Cao Loc District (Lang Son), on 18 March 2019, the Head of Huu Nghi Border Gate Customs Department issued a decision to prosecute the criminal case No. 01/QD-HQLS for smuggling at Huu Nghi international border gate of Viet Dai Company. Huu Nghi Customs also transferred the entire documents to the Investigation Police Department (Lang Son Provincial Police) to investigate.

By Dao Le/ Kieu Oanh