When Is Tax Evasion a Criminal Offense in Vietnam?

Are you or someone close to you being suspected of tax evasion in Vietnam? When does such conduct lead to criminal charges? Is there any way to minimize legal risks and protect your legitimate rights?

When Is Tax Evasion Considered a Criminal Offense Under Vietnamese Law?

Many foreigners doing business or working in Vietnam assume that “tax evasion” is merely an administrative violation. However, in certain circumstances, it can be prosecuted as a criminal offense under Vietnamese law.

This becomes especially concerning when you receive a working invitation from the police or tax authorities. Feeling confused and uncertain about the risks you are facing is a very common reaction.

What Is Tax Evasion Under Current Vietnamese Law?

Under Article 200 of the Criminal Code 2015 (as amended in 2017), tax evasion is defined as intentionally using methods or schemes to avoid paying or underpay taxes that are legally due.

Common examples include:

• Failure to declare taxes or declaring incorrect revenue
• Using illegal invoices or supporting documents
• Recording fictitious expenses to reduce taxable income
• Failing to issue invoices when selling goods or providing services

For foreigners, these situations often arise when:

• Establishing a company in Vietnam without fully understanding tax regulations
• Running online businesses and receiving overseas income without proper declaration
• Acting as a legal representative without directly managing financial matters

When Does Tax Evasion Lead to Criminal Prosecution?

Not all tax evasion cases are treated as criminal offenses. Vietnamese law sets specific thresholds to determine when criminal liability applies.

You may face criminal prosecution if:

• The evaded tax amount is VND 100 million or more, or
• The amount is less than VND 100 million but you have previously been administratively sanctioned or convicted for similar conduct

The severity of the case may also depend on:

• The total amount of tax evaded (which can reach billions of VND)
• Whether the act was organized
• Whether sophisticated methods were used

Possible penalties include:

• Significant monetary fines
• Prohibition from conducting business or practicing certain professions
• In serious cases: imprisonment may apply

However, it is important to understand that each case is assessed based on multiple factors, and it is not possible to conclude at the outset that someone will “definitely go to jail.”

What Should Foreigners Do If Suspected of Tax Evasion in Vietnam?

If you or your loved ones are foreigners being investigated for tax evasion in Vietnam, the most important thing is not to panic — but to properly understand the situation and take timely action.

Commonly Underestimated Legal Risks

In practice, DEDICA has handled many cases where foreign clients faced serious risks simply because they:

• Signed accounting documents without reviewing them carefully
• Fully relied on internal accountants or external service providers
• Did not understand tax obligations in Vietnam
• Did not involve a lawyer from the early stages

A common mistake is only seeking legal counsel after formal charges are initiated. At that point, the opportunity to mitigate liability is significantly reduced.

In particular, in criminal cases in Vietnam:

• Initial statements are critically important
• Uncontrolled submission of documents may be disadvantageous
• Language barriers can lead to misunderstandings of key legal issues

Safe Handling Approach and Legal Strategy

If you are in this situation, consider the following steps:

1. Do Not Provide Explanations Without Full Understanding

You have the right to explain, but your statements must be carefully prepared to avoid unintended legal consequences.

2. Prepare Complete Financial and Accounting Records

This may include:

• Contracts
• Invoices
• Bank statements
• Business-related documents

3. Work with a Lawyer Experienced in Criminal Law and Cross-Border Matters

This is crucial to:

• Accurately assess your legal risks
• Determine whether the case involves criminal liability or administrative violations
• Develop an appropriate strategy when dealing with authorities

4. Consider Remedial Actions

In many cases:

• Paying outstanding taxes
• Cooperating with authorities

May be considered mitigating factors.

DEDICA – Protecting the Rights of Foreign Clients in Tax Evasion Cases

In tax evasion cases, especially those involving foreign elements, understanding the law alone is not enough — you need a practical and strategic legal approach.

DEDICA is a law firm based in Ho Chi Minh City, with lawyers who have experience working at international law firms and multinational corporations. We regularly:

• Advise foreign clients under investigation in Vietnam
• Provide defense in criminal cases involving business activities
• Support clients in working with police and prosecution authorities
• Protect the rights of foreign victims in criminal cases

We understand that for foreign clients, this is not only a legal issue — but also involves psychological pressure, language barriers, and differences in legal systems.

Therefore, DEDICA’s approach is always:

• Clear and easy-to-understand explanations
• No unrealistic promises, but practical legal direction
• Early involvement to minimize risks

Disclaimer: This article is for general informational purposes only. Each case has its own specific facts and should be assessed by a qualified lawyer before any legal conclusions are made.

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