The authorities have released a list of 637 companies identified as high-risk for engaging in the illegal sale of invoices.

o Recently, the authorities published a list of 637 enterprises assessed as high-risk for engaging in the illegal sale of Value-Added Tax (VAT) invoices. This is an important step in enhancing transparency, combating tax evasion, and protecting a healthy enterprise environment in Vietnam.

o The 637 high-risk enterprises involved in the illegal sale of invoices include:

- 524 enterprises were flagged for potential problems related to invoices in the Official Letter 1798/TCT-TTKT, issued on May 16, 2023.

- 113 enterprises involved in the illegal sale of invoices in Official Letter 3385/TCT-TTKT dated August 1, 2024.

Access the list of high-risk enterprises for tax purposes involved in the acquisition of invoices issued by the Tax Authorities.

o Through this initiative, the government continues to demonstrate its strong commitment to preventing budget leakage while also creating a fair and level playing field for legitimate enterprises operating within the legal framework.

Illegal sale of invoices and its severe impact on the economy

The illegal sale of VAT invoices is not only a serious violation of the law but also hurts the economy. Enterprises involved in such activities often create fictitious transactions to evade taxes, legitimize illicit funds, or assist other companies in committing tax fraud.

The main consequences of these actions include:

  1. Loss of government revenue: Each illegally traded invoice reduces the legitimate tax revenue that the government can collect.
  2. Unfair competition: Law-abiding enterprises face disadvantages in competition when their counterparts use fake invoices to reduce costs.
  3. Higher legal exposure for other businesses: Companies that unintentionally collaborate with or transact with enterprises on the high-risk list may be held liable, investigated, or lose credibility in the market.

Criteria for Identifying High-Risk Enterprises

The tax authorities and relevant agencies have established a stringent set of criteria to identify enterprises at high risk. These criteria include:

  • Unusual invoicing activity: A high volume of invoices issued that does not correspond with the actual scale of Enterprise operations.
  • Ambiguous Enterprise Information: Registered enterprise addresses that do not exist, frequent address changes, or the use of fictitious addresses.
  • Short operational lifespan: Many enterprises operate for a brief period before dissolving, fleeing, or changing their Enterprise structure.
  • Signs of tax fraud: Enterprises that report false revenue or profits, or intentionally falsify accounting records.

Enforcement Measures and Legal Consequences

Enterprises listed as high-risk will be closely monitored by the authorities, which may include regular or surprise audits of invoices, transactions, and financial statements. In the event of violations, enterprises could face severe penalties, including:

  1. Administrative sanctions: The imposition of substantial fines, including back taxes and penalties, if fraudulent conduct is detected.
  2. Criminal prosecution: In serious cases, the Enterprise or individuals involved may be subject to criminal prosecution by the law.
  3. Blacklisting: Violating enterprises will be publicly listed, severely damaging their reputation and future ability to engage in Enterprise partnerships.

Advice for enterprises and Partners

To safeguard Enterprise operations and mitigate legal risks when collaborating with high-risk companies, organizations and Enterprise entities should:

  • Verify the legal information of partners: Use publicly accessible tools provided by tax authorities or relevant regulatory bodies to verify Enterprise information.
  • Ensure transparent transactions: Only conduct transactions based on legitimate and clear documentation, such as valid invoices and receipts.
  • Enhance collaboration with advisory services: Enterprises should consult with professional legal or financial advisory firms to receive timely support and updates on regulatory matters.

Message from the Government and Authorities

The publication of the list of 637 enterprises identified as high-risk for engaging in the illegal sale of invoices serves not only as a warning but also as a strong message from the Government: "All acts of tax fraud will be strictly dealt with, without exception." This is also a call for enterprises operating in Vietnam to enhance their awareness of legal compliance and contribute to creating a fair and sustainable Enterprise environment.

For more detailed information or legal advice, please don't hesitate to contact us.