Thông tư 128/1998/TT-BTC

CIRCULAR

AMENDING AND SUPPLEMENTING CIRCULAR No. 45-TC/TCT OF AUGUST 1st, 1996 GUIDING THE IMPLEMENTATION OF GOVERNMENT DECREE No. 22/CP OF APRIL 17, 1996 ON HANDLING ADMINISTRATIVE VIOLATIONS IN THE FIELD OF TAX

In implementation of the Government Decree No. 22/CP of April 17, 1996 on sanctions against administrative violations in the field of tax, the Ministry of Finance hereby provides the specific guidance as follows:

I. GENERAL PROVISIONS

1. Acts of administrative violation in the field of tax are those committed by organizations or individuals in violation of the provisions of tax laws, tax ordinances, the stipulations on drawing up of vouchers for purchase and sale of goods, opening and entering account books, the stipulations on collected charges, fees and the current stipulations on other State budget revenues, which are, however, not so serious enough for being examined for penal liability, but must be subject to administrative sanctions.

2. Subject to sanctions against administrative violations in the field of tax shall be:

2.1. All Vietnamese organizations and individuals that commit acts of administrative violations in the field of tax;

2.2. Foreign organizations and individuals that commit acts of administrative violation in the field of tax. Where international treaties which Vietnam has signed or acceded to provide otherwise, the signed treaties shall apply.

3. The tax collecting agencies stipulated in Decree No. 22/CP of April 17, 1996 shall comprise tax agencies and customs offices (for export, and/or import tax, special consumption tax and value added tax levied on import).

4. Principles and forms of sanctions against administrative violations in the field of tax.

4.1. Principles of sanctioning administrative violations in the field of tax shall comply with Article 3 of the Ordinance on Handling Administrative Violations of July 06, 1995.

4.2. Principal forms of sanction:

- Warning;

- Pecuniary fine.

Where organizations or individuals are found having committed more than one act of administrative violations in the field of tax in one discovery and inspection, and detection, penalty shall be meted out for each act of violation, then the fines shall be totaled.

Apart from application of either of the two principal forms of sanction, such forms of additional sanction as confiscation of exhibits and means used for administrative violations may apply, depending on the nature and seriousness of the violations by committed organizations and individuals in the field of tax.

5. Attenuating circumstances when sanctioning administrative violations in the field of tax:

Organizations and individuals committing administrative violations that have prevented and reduced the harms done by their violations or voluntarily mended or made compensation for damage.

6. Aggravating circumstances when sanctioning administrative violations in the field of tax:

6.1. Recidivism or violation for more than one occasion;

6.2. Taking advantage of one�s post or power, natural disasters, epidemic diseases or enemy-sabotage to commit violations;

6.3. Violations while serving penalty decisions;

6.4. Showing acts of evasion or concealing violations.

7. Cases where administrative violations shall not be sanctioned:

7.1. Expiration of statute of limitations for sanctioning administrative violations:

- The discovered acts of administrative violation in taxation have passed the statute of limitations for sanctions stipulated in Article 12 of Decree No. 22/CP of April 17, 1996 (counting two years with retrospective effect from the date of discovery of acts of violation). For acts of false declaration and evasion of taxes, the statute of limitations for sanctions shall be determined in according to the stipulations in tax laws and tax ordinances;

- Past the time limit of three months from the date of issue of decisions for suspension of investigation or of cases regarding individuals committing acts of administrative violation in taxation, against whom legal actions had been taken or a decision had been issued to bring the cases to trial according to criminal proceedings procedures but the bodies that carry out legal proceedings have decided to suspend investigation or the cases.

Within the statute of limitations for sanctions, if organizations and/or individuals commit new breaches or deliberately evade or hamper the sanction, the afore-mentioned statute of limitations shall not apply and all detected administrative violations in the field of tax shall be sanctioned.

7.2 Tax-related administrative violations which, according to law, show signs of offences and the dossiers of which have been forwarded by tax agencies to competent authorities for settlement.

7.3. For minors who commit acts of administrative violation in taxation, Article 6 of the Ordinance on Handling Administrative Violations of July 6, 1995 shall apply.

7.4. Persons committing acts of administrative violation in taxation while being affected by mental disease or other diseases that cause incognizance or loss of capacity to control their acts.

II. ACTS OF VIOLATION AND LEVELS OF SANCTION

Based on the stipulations in Articles 1, 2, 3, 4 and 5 of Chapter I, Government Decree No. 22/CP of April 17, 1996, the specific forms and levels of sanctions against acts of administrative violations in taxation shall be as follows:

1. Acts of violating the procedures for business registration, registration for tax payment, declaration for making account books and keeping of vouches and invoices relating to calculation, collection and payment of tax:

1.1. Warning for the first breach and a fine of from 20,000 VND to 200,000 VND for the second breach. Where aggravating circumstances are involved, a fine of up to 1,000,000 VND shall be imposed on one of the following acts:

a) Violations of the stipulations on business registration, registration for tax payment or making declarations to tax offices upon the expiry of the time limits prescribed in the current documents guiding the implementation of tax laws, ordinances on taxes, charges, fees and other State budget revenues.

b) Failure to make full declarations of items stipulated in the declarations for tax payment or in book-keeping documents provided to tax agencies.

1.2. A pecuniary fine of from 40,000 VND to 200,000 VND for the first breach. For the second breach, pecuniary fine of from 600,000 VND to 1,000,000 VND with regard to one of the following acts:

- Failure to comply fully with the regime on the management and use of sale invoices according to the State stipulations;

- Failure to make full inscription of details in accordance with each invoice, receipt and printed tax forms when delivering goods or providing services to clients.

1.3. A pecuniary fine of from 100,000 VND to 1,000,000 VND for the first violation and from 2,000,000 to 4,000,000 VND for the second violation; if one aggravating circumstance is involved, a fine of 6,000,000 VND may be imposed and if two aggravating circumstances are involved, a fine of up to 10,000,000 VND may be imposed on one of the following acts:

a) Failing to produce accounting books, vouchers and related documents at the request of the tax authorities;

b) Failing to submit tax declarations and book-keeping reports to tax collecting agencies within the time limit prescribed in the current documents that guide the implementation of tax legislation and law documents on State budget revenues;

c) Failing to observe or having not fully observed the accounting regulations as prescribed in the Ordinance on Accounting and Statistics.

d) Transport of goods without accompanied tax dossiers prescribed for each business subject (i.e. goods purchasing books, vouchers and other legal papers).

1.4. A pecuniary fine of from 1,000,000 VND to 10,000,000 VND for the first violation, and of up to 13,000,000 VND for second violation; if aggravating circumstances are involved, a fine of up to 20,000,000 VND may be imposed on one of the following acts:

- Deliberately not to submit tax declarations, book-keeping reports and other papers to tax collecting agencies in accordance with the provisions of law.

The circumstance in which an act is considered deliberate in this connection shall be as follows: When the time limit for submission of the above-said documents expires, the tax-collecting agencies shall send the first notice requesting the submission of these documents. After ten days from the date of sending the first notice, if the concerned establishments fail to submit the documents, the second notice shall be forwarded and if such documents are still not submitted, the tax-collecting agencies shall apply the sanctioning levels provided for in this point.

- Selling goods without invoices handed to customers as stipulated by the State;

- Organizations and individuals buying and using invoices and receipts of various types neither issued nor permitted to use by the Ministry of Finance;

- Losing or letting other persons make use of one�s invoices to carry out illegal business activities or to evade tax.

1.5. A pecuniary fine of from 2,000,000 VND to 10,000,000 VND for the first violation and of up to 15,000,000 VND for the second violation; if one aggravating circumstance is involved, a fine of up to 20,000,000 VND may be imposed on one of the following acts:

- Destruction of vouchers, books or book-keeping reports related to tax calculation and tax collection when the prescribed time limit for maintenance and keeping has not expired;

- To make vouchers, books or book-keeping reports related to tax calculation and tax collection decrepit to the extent that they cannot be restored (i.e. impossible to read or make photocopy).

2. Acts of false declaration and evasion of tax

Organizations or individuals that commit acts of false declaration and evasion of taxes stipulated in the current tax laws and the Ordinance on Natural Resources Tax (amended), besides having to fully pay the taxes that have been falsely declared or evaded, shall be liable to pecuniary fines according to the number of times of committing these acts as stipulated by each tax law and by the Ordinance on Natural Resources Tax (amended).

Organizations or individuals that commit acts of false declaration and evasion of other taxes, besides having to fully pay the afore-said taxes that have been false declared or evaded shall be liable to pecuniary fines according to the number of times of making false declaration and evasion of taxes according to the levels mentioned below, the maximum fine level, however, shall not exceed 100,000,000 VND:

2.1. A pecuniary fine equal to the taxes evaded and where aggravating circumstances are involved (except for cases where acts of tax evasion have been dealt with but the violation is repeated), a pecuniary fine equal twice the amount of evaded tax shall be levied on one of the following acts:

a) Making wrong declarations of tax calculation basis prescribed for each kind of tax;

b) Drawing up account books, invoices and vouchers not true to the real situations that arise;

c) Leaving out of books accounting data or making accounting not in conformity with the stipulated accounts which result in determining tax calculation basis not true to the real situations;

d) Asking for temporary cessation of business for purpose of tax reduction or exemption but in fact still going on.

Where organizations and individuals committing acts of violation stipulated in this Point 2.1, if discovered prior to the time the committing subjects have to make final settlement of taxes or make full payment of taxes in accordance with law, the levels of fine set forth in this Point 2.1 shall not apply and the levels stipulated in Clause 2, Article 2 of Decree No. 22/CP of April 17, 1996 shall be applied instead.

2.2. A pecuniary fine equating twice the evaded tax amount and where aggravating circumstances are involved (except for cases where acts of tax evasion have been dealt with but violation is repeated), a pecuniary fine that triples the evaded tax amount shall be levied on one of the following acts:

a) Goods transported without sufficient dossiers evidencing that tax has been paid for them or they have been controlled by tax agencies according to the stipulations for each business subject.

The acts of violation referred to in this point shall be considered acts of false declaration and tax evasion only if the tax agencies still have doubts after the inspection and allow the violators a time limit for travelling to collect sufficient valid dossiers evidencing that tax has been paid for the goods (for those purchased, sold or exchanged) or the goods have been controlled by tax-collecting agencies (for goods transported from one warehouse to another within the same unit) but the violators still fail to produce all the valid dossiers.

Where within the time limit set by tax agency, the violators have produced all valid dossiers, the tax offices competent to sanction may only issue sanctioning decision according to the stipulations in Point b, Item 2, Article 2 of Decree No. 22/CP of April 17, 1996.

Where goods owners fail to abide by tax agency�s handling decisions or past the time limit by one day for fresh food and five days for other goods after the issuance of the handling decisions, the goods owners still fail to come up and pay tax or fines in order to take back their goods, the tax agency shall refer the matter to financial body of the same level from district level upwards to set up a council to sell the temporarily-held goods by auction for enforcement of penalties;

b) Doing business without making declaration and registration with tax offices;

c) Forging sale invoices, vouchers for receipt of money, tax receipts, copies of permits to transport goods and other documents relating to tax calculation.

2.3. For organizations and individuals engaged in production or/and export-import business activities, if violating regulations in Points 2.1, 2.2, Section II hereof shall, depending on violation, be subject to a pecuniary fine equal from 2 to five times to the evaded tax amount as stipulated by law.

2.4. Where the evaded tax amount is large or the tax evasion is repeated though it has been administratively sanctioned, the tax-collecting agency shall refer the dossiers to People�s Procuracies of the same level for examining penal liability according to law.

3. Acts of violating the regime of collection and payment of taxes and fines:

3.1. A pecuniary fine of from 100,000 VND to 500,000 VND for the first violation and from 500,000 VND to 800,000 VND for the second violation; if one aggravating circumstance is involved, a fine of up to 3,000,000 VND may be imposed and if two aggravating circumstances are found, a fine of up to 5,000,000 VND may be levied on one of the following acts:

- Refusing to receive tax-collecting notice, tax-collecting orders or decisions sanctioning the tax-related administrative violations, in cases where these notices are directly handed by tax agencies.

When tax-collecting officials personally hand the tax payment notices, tax-collecting orders or tax-related sanctioning decisions to tax payers or the violating organizations and/or individuals, that refuse to take them, the tax agencies shall send for a witness and make a record on the administrative violation with reasons therefor clearly stated, to serve as the ground for sanctioning.

3.2. A pecuniary fine of from 200,000 VND to 500,000 VND for the first violation and from 500,000 VND to 1,000,000 VND for the second violation; if one aggravating circumstance is involved, a fine of up to 5,000,000 VND may be imposed and if two aggravating circumstances are found, a fine of up to 10,000,000 VND may be levied on one of the following acts:

- Delay in tax or fine payment specified in tax-notice or in the tax offices� decisions to handle tax-related violations.

Tax officials, organizations or officials entrusted to collect taxes, bank officials or officials from other credit organizations who, due to lack of responsibility, make tardy tax payment into the Treasuries shall also be subject to fines for tardy payment in accordance with this stipulation;

When enterprises pay taxes via their accounts at banks or other credit institutions and such accounts have a credit balance enough for tax payment, if such banks or credit institutions are late in deducting the money from the enterprises� accounts for tax payment into treasury accounts, such banks or credit institutions shall be fined for late payment according to this provision.

- Procrastination in tax or fine payment:

Shall be considered procrastination in tax or fine payment cases of late payment of taxes and fines which are more than 30 days overdue against the time limit stipulated in tax payment notices and sanctioning decisions.

3.3. Those organizations and individuals that breach the stipulations set out in Point 3.2, Section II hereof shall, besides being imposed with penalties pursuant to the stipulations in Point 3.2, Section II above, still be subject to a fine equal to 0.1% of the late payment amount.

4. Acts of breaching goods inspecting and goods sealing systems.

4.1. A pecuniary fine of from 100,000 VND to 400,000 VND for the first violation and from 500,000 VND to 1,000,000 VND for the second violation; if one aggravating circumstance is involved, a fine of up to 3,000,000 VND may be imposed and if two aggravating circumstances are found, a fine of up to 5,000,000 VND may be levied on the following act:

Not letting tax offices to inspect goods en route of transport or to inspect goods and goods and raw material warehouses in production and business places.

4.2. A pecuniary fine of from 200,000 VND to 500,000 VND for the first violation and from 600,000 VND to 1,200,000 VND for the second violation; if one aggravating circumstance is involved, a fine of up to 10,000,000 VND may be imposed on the act of breaking sealing, at one�s own will, of goods warehouses, raw material warehouses, machinery and workshops within the tax offices� sealing duration.

III. COMPETENCE AND PROCEDURES FOR SANCTIONING TAX-RELATED ADMINISTRATIVE VIOLATIONS.

1. Competence to sanction tax-related administrative violations

1.1. Tax officials on duty shall have the right to serve warning and/or impose pecuniary fine of up to 100,000 VND on acts of tax-related administrative violation in their control areas.

Heads of tax stations and heads of tax teams shall have the right to award warning and pecuniary fine of up to 200,000 VND for acts of tax-related administrative violation in their control areas.

1.2. Heads of Tax Sub-Department shall have the following rights:

- To impose warning penalties and pecuniary fines of up to 2,000,000 VND for acts of tax-related administrative violation provided in Articles 2, 4 and 5 of Government Decree No. 22/CP of April 17, 1996 on sanctioning tax-related administrative violations;

- To impose pecuniary fines equal to the evaded tax amount, for acts of false declaration and tax evasion.

- To confiscate exhibits and means used for the tax-related administrative violations, which is valued up to 10,000,000 VND.

1.3. Heads of Tax Departments shall have the following rights:

- To impose warning and pecuniary fine of up to 20,000,000 VND for acts of tax-related administrative violation provided in Articles 2, 4 and 5 of Government Decree No. 22/CP of April 17, 1996 on sanctioning tax-related administrative violations;

- To impose pecuniary fines equal five times to the evaded tax amount, for acts of false declaration and tax evasion in strict conformity with the stipulations of each current tax law and tax ordinance;

- To confiscate exhibits and means used for tax-related administrative violations.

Tax-collecting agencies of all levels shall be the ones competent to sanction all acts of tax-related administrative violations within the scope of their power. Where the cases are deemed beyond their competence, they shall be referred to the competent levels for resolution. If the cases do not fall under the tax service�s competence for resolution, files shall be forwarded to the competent bodies for resolution accompanied by written proposals on sanctioning forms and levels.

Heads of village and ward (inter-village and inter-ward) tax teams formed by the Ministry of Finance�s Circular No. 64-TC/TCCB of October 29, 1992 shall also be competent to sanction tax-related administrative violations as heads of tax stations in accordance with the stipulations in Section 1, Article 7 of Government Decree No. 22/CP of April 17, 1996.

Where other agencies such as market management, police, border guards�, rangers and specialized State inspectorates discover acts of tax-related administrative violation in the course of performing their functions, they shall refer the cases to the tax offices of the same level for treatment.

2. Procedures for sanctioning tax-related administrative violations.

2.1. Warning is applicable to first violations stipulated in Point 1.1, Section II hereof.

Decision on warning shall be made in writing and where necessary, the competent bodies shall forward sanctioning decisions to the local administrations where violators reside or to the agencies that manage the violators.

2.2. Pecuniary fines.

- Where a pecuniary fine is 20,000 VND or under, the person competent to handle shall issue sanctioning decision on the spot and issue receipt for money collection. The sanctioning decisions must clearly state the names and surnames and addresses of violators, fine levels, places of fine payment as well as the names and surnames of issuers of sanctioning decisions, and one copy of the fine receipt must be handed to violators.

- Where a pecuniary fine is above 20,000 VND, the agency (person) competent to handle shall make a record on the administrative violation. Within 15 days from the date of making such record, the competent agency shall issue the sanctioning decision.

- Where a pecuniary fine is 2,000,000 VND or more, a copy of the fining decision shall be sent to the People�s Procuracy of the same level.

2.3. Enforcement of sanctioning decisions against tax-related administrative violations shall comply with Article 11 of Decree No. 22/CP of April 17, 1996. Additional guidance is hereby provided as follows:

- Sanctioning decisions must be forwarded to the sanctioned persons or organizations within 3 days at the latest from the date of issue of such decisions. The sanctioned organizations and individuals shall implement the sanctioning decisions within 5 days from the date of handing of such decisions.

- After 5 days from the date of receipt of sanctioning decisions, if the sanctioned organizations and individuals do not voluntarily implement such decisions, Heads of tax agencies which have issued the sanctioning decisions shall have the following rights:

+ To request banks, State Treasuries or other credit organizations to deduct money from these organizations� and individuals� accounts for the payment of taxes and fines.

Tax agencies shall send official letters attached with handling decisions to serve as the ground for banks, State Treasuries or other credit organizations to deduct money from such organizations� and individuals� accounts for payment of taxes and fines;

+ To temporarily seize goods and exhibits as a guarantee for full collection of taxes and fines. This measure shall be applicable only where without such seizure, taxes and fines shall not be collected.

All cases of temporary seizure of goods and exhibits shall be effected with written decisions of the heads of tax-collecting agencies at district (or equivalent) level(s) upwards. When implementing decisions for temporary holding of goods and exhibits, a record thereon must be made. Where sealing is necessary, it must be done immediately in the presence of goods owners or representatives of business establishments. Procedures of handing and receiving temporarily seized goods and exhibits shall be effected between tax officials, and keepers shall be liable for any fraudulent exchanges, losses or damages should they occur.

+ Inventorying of properties for auction.

Where the inventory of properties is needed, the tax agencies that have issued the sanctioning decisions shall make reports to People�s Committees of the same level and the superior tax-collecting agencies for comments. After a decision to this effect was signed by People�s Committees of the same level, tax agencies shall co-ordinate with the police forces and People�s Procuracies to conduct the inventory of the properties whose value is corresponding with the fine and tax amounts, for auction sales as prescribed by laws. Proceeds from such auction of goods and exhibits involved in the tax-related administrative violations, which are abandoned by goods owners or the owners of which are unknown shall be used in the following order: to cover expenses for investigations, verifications, transports, handling and sales of goods, etc. (if any) which must be evidenced by valid vouchers; deduction for rewards on the discovered sum of the tax evaded as stipulated and the rest shall be fully remitted into the State budget.

- All cases of administrative violations subject to fines, the fine-collecting bodies, when collecting fines, shall use receipts for money collection issued by the Ministry of Finance. The fines collected must be paid into the State budget in strict conformity with chapters, categories, items, grades and entries according to the stipulations of the Indexes of State Budget. The regime of managing receipts for money collection and the principles of deduction for reward from fines actually collected shall comply with the State�s current documents.

The settlement of exhibits and means used in committing administrative violations shall comply with the stipulations in Article 52 of the Ordinance on Handling Administrative Violations.

A copy of decision for confiscating violation exhibits and means valued at from 5,000,000 VND upwards shall be forwarded immediately to the People�s Procuracies of the same level.

3. Complaints, denunciations and their settlement

The procedures for lodging complaints and settlement of complaints about decisions on sanctions against tax-related administrative violations; the procedures for resolution of denunciations against acts of abuse of power or other illegal acts of tax-collecting agencies and persons competent to sanction tax-related administrative violations shall comply with the stipulations in Article 13 of Decree No. 22/CP of April 17, 1996.

IV. OPENING OF ACCOUNTS AND COLLECTION AND PAYMENT OF FINES

Tax agencies at all levels, which include the General Department of Tax, Tax Departments and Tax Sub-departments shall be entitled to open custody accounts at the State Treasuries of the same level for depositing and settlement of the evaded tax amounts and fines directly inspected and discovered by tax agencies including cases of receiving penalty transferred from market management agencies, police, border guards, rangers and specialized State inspectorates.

Customs Offices of the provinces and centrally-run cities shall be entitled to open accounts for temporary holding of money for their own branch at the provincial and municipal State Treasuries for depositing and settlement of the evaded tax amount and fines directly inspected and discovered by customs offices.

a) With regard to confiscated goods and exhibits:

When auctioning goods and exhibits confiscated, receipts for money collection issued by the Ministry of Finance must be used. The entire proceeds must be deposited in custody accounts opened at State Treasuries.

Dossiers on confiscated goods and exhibits shall comprise receipts for temporary seizure of goods; handling decisions by competent agencies, receipts for money collection, tickets for delivery of confiscated goods and exhibits, paying in slips to budgets, reports on auction sales, decisions for deduction of sums to form funds and other papers on expenses (if any) such as for investigation, handling, transport, maintenance, calibration, survey and expenses incurred in organizing auction sales.

b) With regard to the evaded tax amounts and fines (except fines for late payment of taxes):

- With regard to fines, based on sanctioning decisions and receipts of money collection issued to sanctioned subjects, the fines shall be deposited in custody accounts at State Treasuries.

- With regard to evaded tax amounts, based on inspection reports, the competent agencies shall issue handling decisions to collect arrears of the evaded taxes and send a copy of the same to the sanctioned so as to request immediate payment of the evaded tax amounts into the custody accounts at State Treasuries.

The evaded tax amounts discovered and collected are the tax amounts discovered outside the tax calculation declaration, the final settlement reports on enterprises� quarterly and yearly business returns and outside the tax amount inscribed monthly in tax offices� books. The taxes collected from consignment trading shall not be calculated in circulation stage (except where tax arrears are collected together with fines for evasion of turnover profit taxes in the circulation stage with regard to consignment traders who have not paid turnover tax and profit tax before transport of goods).

- Where the evaded taxes and fines arise, the same shall be paid to custody accounts in such localities. Regulation and transfer of such evaded taxes and fines among localities shall be prohibited

V. COMMENDATION, REWARDS AND HANDLING OF VIOLATIONS

After sanctioning decisions or complaint decisions take effect, deduction for rewards shall be made from the discovered sum of evaded taxes.

The levels of tax deduction for rewards shall be as follows:

- 2% (two per cent) for cases of discovery of tax evasion in the State economic sector;

- 5% (five per cent) for cases of discovery of tax evasion in non-State economic sector, foreign investment and in other economic organizations.

- 30% (thirty per cent) on fines for tax-related administrative violations.

The agencies entitled to open accounts at State Treasuries to monitor the deduction for the establishment and use of funds against acts of false declarations for tax evasion shall comprise market management agency, police, border guards, rangers and specialized State inspectorates.

Those agencies entitled to make deductions for forming funds shall have to abide by the following principles:

Deductions shall be made only after handling decisions are issued by State competent agencies and no complaints are made during the period stipulated by law. Where claims are lodged, deductions for forming funds shall be made only after resolution of such complaints.

Reward funds shall be distributed as follows:

- A 30% deduction to form units� reward funds;

- A 60% deduction to form supplementary funds to cover expenses incurred in units� activities against tax evasion. Where more than one agency co-ordinate in inspection, the sponsoring agency shall be entitled to such deduction for forming funds.

- A 10% deduction to deliver to the immediate-higher agencies of the handling units to form funds against acts of false declarations for tax evasion to reward the co-ordinating units. Where there are no such immediate higher agencies, the deduction shall be kept at the units to supplement their operation expenses.

Based on the sums paid to custody accounts pursuant to advice slips by the State Treasuries and the related dossiers, tax offices and Customs Departments - owners of such custody accounts - shall make payment to cover expenses (if any) and issue decisions for deduction to form funds for units according to the prescribed percentages. Deductions to form funds shall be made according to cases that have been dealt with.

- To make vouchers to be forwarded to State Treasuries where custody accounts are opened for transferring the deducted sum from the custody accounts to the fund accounts of the inspection units. At the same time, procedures shall be effected for immediate payment of the remaining sums after deductions to cover expenses (if any) and to make rewards to entry 051 (for the item of fines on account of administrative violations) and entry 052 (for the item of confiscation) in accordance with the sub-entries of the corresponding chapters, categories, items, grades and entries of the Indexes of the State Budget.

Where the subjects of inspection must pay the arrears of taxes, the taxes evaded and fines simultaneously, inspection units shall inscribe clearly each category to be paid in inspection reports and handling decisions to avoid confusion when making deduction to form funds.

If inspection units deliberately act against the regulation in order to make deduction for reward they shall, besides having to refund the sum deducted, be disciplined, administratively sanctioned or examined for penal liability.

Where more than one agency co-ordinates in inspecting one case, the agency which sponsors the organization of inspection shall be responsible for considering payment of expenses and rewards for co-ordinating units in an open, democratic and rational manner according to the efficiency of the coordination.

Use of funds: Heads of agencies entitled to form funds shall be responsible for considering rewards for individuals directly or indirectly involved in the combat against acts of false declarations and tax evasion. The highest level of reward for individuals shall not exceed 300,000 VND/a case and 900,000 VND/month/person. In special cases, heads of units shall have the right to decide deduction higher than 900,000 VND/month/person and be liable for such decisions.

Where the reward amounts for forming units� reward fund are not large, therefore the level of reward for individuals is little, heads of units may deduct from "Supplementary funds to cover expenses incurred in units� activities against tax evasion" to reward those who make merits in combating acts of false declarations and tax evasion.

Where one case of inspection lasts several months, the number of months calculated for considering reward deduction shall be equal to the number of the inspecting months inscribed in inspection reports. Splitting of a big case into small ones for reward deduction shall be prohibited. Reward deduction must be done definitely for each case.

Rewards for officials outside the branch who co-ordinate in direct inspection shall be the same as those in the branch.

For officials indirectly engaged in inspections (those who engage in direction, synthetic and supporting activities), if proposed by inspecting units for rewards, the reward shall not exceed 150,000 VND/case and 500,000 VND/month/person. In special cases, heads of units may decide reward deduction higher than 500,000 VND/month/person.

In order to bring into full play the positive effect of rewards, heads of units shall have the right to make reward deduction and they shall be responsible for making the right decisions and liable for such decisions, including decisions on higher deductions.

The remaining sums after deduction for rewards shall be kept in the reward funds for use as rewards for officials who make merits in fulfilling inspection tasks in the year.

* Supplementary funds to cover expenses incurred in units� activities against tax evasion shall be used for the following purposes:

- Covering additional expenses for the procurement of working facilities;

- Covering expenses for review of emulation campaigns;

- Supplementing expenses for propaganda.

- Rewarding co-ordinating units and officials taking an indirect part in combating acts of tax evasion in business activities;

- Covering additional expenses for rewarding where reward funds are small;

- Supplementation to localities that meet with budget difficulties in order to boost the combat against tax evasion.

* Branch�s funds shall be used for the following purposes:

- Covering additional expenses for propagation work;

- Covering additional expenses for procurement of working facilities;

- Covering additional rewards for emulation campaigns, review of branch� work and for co-ordinating branches that participate in combating tax evasion.

Heads of tax agencies at various levels entitled to make deduction for forming reward funds shall be responsible for considering rewards for individuals who directly or indirectly take part in combating acts of tax evasion.

Handling of tax-related administrative violations shall comply with Articles 91 and 92 of the Ordinance on Handling Administrative Violations of July 06, 1995 and Article 14 of Decree No. 22/CP of April 17, 1996. Where a wrong penalty has been imposed and the fine paid to a custody account at the Treasury, the issuer of the penalty decision shall issue a decision to abrogate the wrong penalty decision and request the State Treasury to return the sum that has been paid for the wrong penalty.

VI. ORGANIZATION OF IMPLEMENTATION

1. Based on the guidance provided herein, the ministers, the heads of ministerial-level agencies and agencies attached to the Government and the presidents of People� Committees of all various levels shall have to organize, guide and inspect the implementation of Decree No. 22/CP of April 17, 1996.

Thorough grasping and widespread dissemination of the basic contents of the afore-said documents shall be made to the leadership at various echelons, executives, tax-collecting officials, the various branches, production and business establishments and among population for strict implementation of Decree No. 22/CP of April 17, 1996 and this Circular.

2. The General Department of Customs shall have to organize the collection of export, import, and special consumption taxes as well as the value-added tax at import stage. The Customs Office shall be the one competent to sanction the tax-related administrative violations vis � vis acts of breaching the stipulations of export, import and special consumption taxes as well as the value-added tax at import stage.

3. This Circular shall take effect 15 days from the date of its signing and Circular No. 45-TC/TCT of August 1, 1996 is hereby abrogated.