What is Invoice Fraud?

According to the law, invoice fraud is an invoice or document that records economic business indicators and content, but the purchase or sale of goods or services stated on the invoice does not actually exist, either partially or entirely. In other words, these are invoices created for fraudulent purposes such as tax evasion or to serve other illegal objectives.

Consequences of Invoice Fraud

The act of creating fraudulent invoices is a form of illegal use of invoices and is subject to severe penalties as prescribed by law. Specifically:

• Administrative fines: Fines ranging from 20,000,000 VND to 50,000,000 VND and the mandatory cancellation of the used invoice.
• Percentage-based fines: A 20% fine on the amount of tax due or the amount of tax exempted, reduced, or refunded.
• Fines based on the amount of tax evaded: A fine of 1 to 3 times the amount of tax evaded in cases determined to be tax evasion.
• Criminal liability: For cases with signs of a crime, the competent authorities will conduct an investigation and prosecute criminal charges in accordance with the provisions of the Penal Code.

Remedial measures for invoice fraud

In addition to administrative and criminal penalties, violators must also implement remedial measures such as:

• Paying the full amount of unpaid taxes and late payment fees into the state budget.
• Adjusting the amount of losses and input value-added tax that can be deducted.

Why comply with invoice regulations?

Compliance with invoice regulations not only ensures fair competition but also contributes to building a healthy and transparent business environment. Moreover, the use of legitimate invoices provides buyers with a basis for deducting input value-added tax and determining deductible expenses when determining taxable income.

Advice

To avoid risks when using invoices, businesses and individuals should:

• Understand the legal provisions on invoices.
• Create invoices that are complete and accurate.
• Carefully store invoices.
• Learn about electronic invoice management software to ensure accuracy and efficiency.

Conclusion

Invoice fraud is a serious violation of the law, affecting the economy and society. Understanding invoice fraud and its legal consequences will help businesses and individuals enhance their awareness of compliance, contributing to a clean and sustainably developing economy.