Investigate a company showing signs of illegally invoice trading

Hai Phong Tax Department informs on case of trading illegally invoice relating to a petrol tycoon

Issuing invoice without operation

According to Long Xuyen City Tax Branch (An Giang Tax Department), through monitoring tax declaration dossiers at the Tax authority and reporting on the status of taxpayers’ use of invoices to the Tax authority, Long Xuyen City Tax Branch discovered that Ngoc Hung Dung AG Co., Ltd. (Tax code: 1602170057, at Tay Khanh 4, My Hoa ward, Long Xuyen city, An Giang province) has signs of high-risk on tax and invoice.

The company was established in May 2023 with the business line of constructing residential house, and charter capital of VND1.1 billion.

Through reviewing the report on the use of printed invoices and e-invoices and referring tax declaration data of Ngoc Hung Dung AG Co., Ltd., Long Xuyen City Tax Branch detected that the company registers its business line as a residential house construction but the e-invoices issued by the company show that the company operates various businesses lines such as trading backfill sand and concrete sand, mountain soil transportation, land, ….

Ngoc Hung Dung AG Co., Ltd. also issues VAT invoices with high value and large number of invoices in a short time; e-invoices for selling backfill sand to many units with high value, and then the company deleted the invoices; and re-issued many adjusted invoices and replaced invoices.

For example, the company issued invoice No. 220 on March 21, 2024 with an exclusive tax value of over VND4.6 billion and VAT of over VND460 million. By March 30, 2024, the company issued invoice No. 285 to replace invoice No. 220 with the reduced exclusive tax value at more than VND139 million; and VAT at over VND13 million...

On March 21, the company issued invoice No. 219, with an exclusive tax value of about VND3.5 billion, VAT of about VND350 million. However, on March 30, the company issued invoice No. 284 to replace invoice No. 219 with the reduced exclusive tax value of more than VND139 million, at VAT of over VND13 million.

The Tax authority determined that the data declared on the company's quarterly VAT declarations and the electronic invoice data show large difference. The company does not register warehouses or factories, and does not incur transportation costs and does not have warehouses for delivering and receiving goods.

Issuing e-invoice through agents

According to Long Xuyen City Tax Branch, to clarify the above information, the branch had a working session with representatives of Ngoc Hung Dung AG Co., Ltd. at the end of May to request the company to explain and add information and documents.

At the working session, the company informed about the company’s trade and delivery of goods, and admitted to issuing e- invoices for a variety of industries.

Specifically, invoices issued from the second quarter of 2023 to May 23, 2024 on e- invoices and tax declaration documents were introduced by agents. The company only issues sales invoices and receives purchase invoices for tax declaration. In fact, the company has no goods. The company will enjoy 3.5% of the total value of each issued e-invoice and the introducer will enjoy 0.5%

The company’s director also admitted that the company had no sales contract or payment documents; no arising shipping or delivery costs; and without warehouse for goods delivery.

Ngoc Hung Dung AG Co., Ltd. does not register warehouses or factories, has no labor costs to serve production and business... but the company has sold e-invoices with high value and large number in short time.

From the results of working with Ngoc Hung Dung AG Co., Ltd., Long Xuyen City Tax Branch realized that there are risks in using invoices and documents of other organizations and individuals to legalize purchased and sold goods and services for tax evasion.

Currently, the branch has issued a decision to stop using invoices for the company. At the same time, the branch has also reported to Long Xuyen City Police for investigation.

In order to promptly prevent violations of tax laws by organizations and individuals that have used the illegal e-invoices issued by Ngoc Hung Dung AG Co., Ltd. to deduct, refund taxes, and account for input costs, Long Xuyen City Tax Branch requests tax authorities to conduct inspection, verification and handling for these individuals and organizations.