The Tax Department has recently released a comprehensive handbook on the prevention and mitigation of double accounting practices. This step was taken as a preventive measure to help business owners, including home-based business operators, identify legal compliance risks early on to avoid severe criminal consequences.
Tax authorities emphasized that there are nine main indicators serving as red flags for an entity's accounting integrity. These include discrepancies between actual revenue and issued invoices, unusual cash transactions relative to industry standards, and data misalignments between accounting systems, electronic invoices, and banking cash flows.
Furthermore, business owners are advised to watch out for the use of fragmented accounting software, consistent reporting of losses despite rising revenues, and glaring discrepancies between data reported to tax authorities and that provided to investors or banks. This also includes operational expenses unsupported by valid invoices, as well as the practice of reporting revenues below the tax threshold when actual realizations are significantly higher.
In response to these findings, authorities are urging entrepreneurs to immediately conduct self-audits of all their financial documents and tax systems. This proactive step is considered crucial for rectifying administrative errors before they are uncovered by audit teams, which could potentially trigger legal proceedings.
It should be noted that the threshold for criminal prosecution is quite strict, set at 100 million VND for individuals and 200 million VND for commercial legal entities. Moreover, offenders who have previously received administrative sanctions but repeat the same violation remain at high risk of facing criminal charges, as prior violation history serves as an aggravating factor in future legal proceedings.
