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Are you feeling worried after being invited to work with the tax authorities or police in Vietnam? Are you unsure whether your actions may only result in administrative penalties or could lead to criminal charges? What exactly is the difference between an administrative tax violation and tax evasion in Vietnam – and where is the line that many foreigners unknowingly cross?
When working, investing, or doing business in Vietnam, tax compliance is one of the most important legal obligations—but also one of the most misunderstood, especially for foreigners.
Many clients at DEDICA have shared that they had no intention of violating the law, yet their cases were still reviewed under potential criminal liability.
The key issue is that the boundary between administrative tax violations and tax evasion is not always clear. A few changes in factors such as the amount involved, the nature of the conduct, or prior violations can shift the legal consequences from administrative penalties to criminal prosecution.
An administrative tax violation refers to errors or non-compliance in tax declaration or payment that do not yet constitute a criminal offense.
Under the Law on Tax Administration 2019 and Decree 125/2020/ND-CP, common violations include:
These violations are typically handled through administrative measures such as:
In practice, many foreign individuals and companies encounter these issues due to unfamiliarity with Vietnam’s tax system or reliance on unsuitable accounting services. While common, these risks can often be controlled if identified early.
Tax evasion is regulated under the Penal Code 2015 (as amended). It is a more serious offense involving intentional acts to reduce or avoid tax obligations.
A person or organization may face criminal liability if:
Common acts considered tax evasion include:
Penalties may include fines, business restrictions, and in more serious cases, imprisonment under Vietnamese law.
It is important to note that whether a case leads to criminal liability depends on a comprehensive assessment of documents, evidence, and the working process with competent authorities.
This is often the most concerning issue for foreigners undergoing inspection or investigation in Vietnam. In practice, authorities typically consider three key factors.
The tax amount is a critical factor:
However, this is not the only factor. Authorities will also consider cooperation, remedial actions, and other relevant circumstances.
With the right legal strategy, in many cases, individuals can significantly reduce legal risks.
The core distinction lies in the subjective element:
However, determining intent is not straightforward and often requires a detailed analysis of documents, context, and behavior. This is where legal counsel plays a critical role in shaping an appropriate defense strategy.
Even if the tax amount is below VND 100 million, criminal liability may still arise if:
This creates significant risk, particularly for businesses operating long-term in Vietnam without strong legal compliance systems.
If you or your loved ones are being invited to work with authorities or are under investigation, the most important thing is to stay calm and take the right steps from the beginning.
Foreigners in Vietnam have the right to:
Having a lawyer early can help avoid risks such as inconsistent statements or signing documents without fully understanding them.
Many people assume their case is “just a minor mistake.” However, during an investigation, the same conduct can be interpreted differently if not properly explained.
This is why an independent legal assessment is essential.
Taking steps such as paying outstanding taxes, providing explanations, and cooperating appropriately can help reduce legal risks.
However, cooperation should be guided by legal advice to avoid unintended negative consequences.
DEDICA is a law firm based in Ho Chi Minh City with experience advising and representing foreign clients in tax and criminal matters in Vietnam.
We understand that clients are not only concerned about financial penalties, but also about the risk of criminal charges and their impact on business, residency, and reputation.
DEDICA focuses on:
Disclaimer: Each case is unique. Whether a matter is handled administratively or criminally depends on specific facts and competent authorities. This article is for reference only and does not constitute legal advice.
You should seek legal assistance if:
The earlier you engage a lawyer, the better your chances of managing risks effectively.
📞 Hotline: (+84) 39 969 0012 (Available via WhatsApp, WeChat, Zalo)
🕒 Working Hours: Monday – Friday (8:30 – 18:00)
Contact us today for a free initial consultation with our experienced lawyers!
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