After the finalisation has been filed, the enterprise discovers a non-deductible expense, an unrecorded revenue item, or a wrongly applied incentive — actual taxable profit is higher than declared. Tax administration law provides a clear path for exactly this situation: the supplementary declaration. Handled properly and promptly, the enterprise pays only the tax difference plus late payment interest; if the tax authority finds it first, the same error attracts an additional 20% incorrect-declaration fine.
The supplementary declaration mechanism: the right and the decisive cut-off
Under the Law on Tax Administration 108/2025/QH15 (inheriting the supplementary declaration mechanism of the 2019 Law on Tax Administration), a taxpayer discovering errors in a filed tax dossier may file a supplementary declaration at any time, but before the tax authority announces an inspection/examination decision at the taxpayer’s premises (or before another competent authority detects and minutes the error). The supplementary dossier comprises the supplementary return and an explanatory statement — setting out the adjustment item, the affected original tax period and the tax change. This is the most important legal cut-off in this topic: before the inspection decision announcement, self-correction enjoys the preferential regime; after it, a supplementary filing no longer avoids the fine (see also topic FDI-LC-2047).
Upward adjustment: what amounts are payable?
- Additional tax: the difference between the correct tax and the amount declared for the original period, payable immediately upon the supplementary filing.
- Late payment interest: 0.03% per day on the additional tax, from the original period’s deadline to the actual payment date — unavoidable even for voluntary correction, because the State was kept out of the money for that period.
- The 20% incorrect-declaration fine: not applied where the enterprise files the supplementary declaration and pays in full before the tax authority announces an inspection/examination decision — this is the “reward” for self-detection and self-correction. If the tax authority finds the error first, the 20% fine on the shortfall under Article 16 of Decree 125/2020/ND-CP applies together with the clawback.
Must the financial statements be resubmitted with the tax adjustment?
No — the supplementary tax dossier is a standalone tax file; it does not carry a resubmission of the financial statements. But two error layers must be distinguished: if the difference is purely a tax matter (an accounting-valid expense that is non-deductible for tax, a wrongly applied incentive), the books and financial statements are not wrong and need no adjustment. If the root cause is an accounting error (unrecorded revenue, misstated costs in the books), the enterprise must simultaneously handle it under accounting standards: a material prior-year error is adjusted retrospectively in the current year’s financial statements, and the adjusted statements are retained and explained when next year’s audit reviews opening balances. The two layers are independent: a supplementary tax filing does not replace the accounting adjustment, and vice versa.
Frequently asked questions
How is a self-discovered tax under-declaration after finalisation handled?
File a supplementary declaration for the original finalisation period under the Law on Tax Administration 108/2025/QH15: a supplementary return with an explanatory statement, determining the correct tax and paying the additional difference immediately. This can be done at any time before the tax authority announces an inspection decision at the premises.
Does paying additional tax attract late payment charges?
Yes — late payment interest of 0.03% per day on the additional tax, from the original period’s deadline to payment; this is unavoidable. But if the supplementary declaration is filed and paid in full before the inspection decision is announced, the enterprise is not fined the 20% incorrect-declaration penalty under Article 16 of Decree 125/2020/ND-CP.
Must financial statements be resubmitted when taxable profit is adjusted upward?
No financial statements are resubmitted with the supplementary tax filing. If the difference is purely tax (non-deductible expense, wrong incentive), the statements are not wrong. If the root is a material accounting error, retrospective adjustment in the current year’s statements under accounting standards is required, in parallel with the supplementary filing.
How long is the window to self-adjust without a fine?
There is no fixed number of days: the legal cut-off is before the tax authority announces the inspection/examination decision at the taxpayer’s premises. A supplementary filing after that point still records the tax but no longer avoids the 20% incorrect-declaration fine where the error is found through inspection.
This article has been quality-reviewed by the FLAW AI Legal Council
