Scenario: a post-clearance audit finds that a company applied the wrong HS code to a component line for two years and omitted a dutiable charge from its declared values. The company asks: how much is the fine, and can anything reduce it? The answer lies in how Decree 169/2026/ND-CP layers the conduct (which replaced Decree 128/2020/ND-CP from 1 July 2026; conduct completed before that date remains governed by Decree 128/2020/ND-CP under Article 39 of Decree 169/2026/ND-CP) — the label “misdeclaration” is the same, but the financial consequences differ fundamentally depending on whether the error caused a duty shortfall.
Two tiers of misdeclaration: no shortfall versus duty shortfall
The first tier is declaring contrary to reality as to quantity, description, type, code or value without causing any duty shortfall — for example, picking a wrong HS code whose duty rate is equal or higher. This tier carries fines within the bands set by Decree 169/2026/ND-CP, the specific level depending on the nature of the conduct and the value of the offending goods. The second tier is misdeclaration that causes a duty shortfall or inflates exemption, reduction or refund amounts: the fine is calculated as a percentage of the very tax difference — under Article 10 of Decree 169/2026/ND-CP, 10% where the business detects the error itself and files a late supplementary declaration (Clause 2), and 20% where customs discovers it (Clause 3) — on top of full collection of the shortfall and late-payment interest. Where the conduct shows signs of evasion or fraud, the regime shifts to Article 15 of Decree 169/2026/ND-CP — one times the evaded tax, plus 0.2 times per aggravating circumstance, capped at three times — and possible criminal liability when the elements are met.
Related violations usually fined in the same sweep
An audit rarely stops at one declaration error. Decree 169/2026/ND-CP also penalises the conduct businesses most often commit alongside it: breaches of customs procedure deadlines — including late documents and temporary import or export beyond the period stated on the declaration; failure to re-export temporarily imported goods on time; breaches of customs supervision such as breaking seals without authority or removing goods from supervised areas; and failure to produce records during inspection. Understanding this structure lets a business self-audit comprehensively instead of patching only the error already flagged.
Mitigating factors: voluntary disclosure is the strongest card
Article 9 of the Law on Handling of Administrative Violations 15/2012/QH13 lists the mitigating circumstances: voluntarily remedying consequences and compensating damage; voluntary disclosure and sincere remorse; violations committed under provocation or in special hardship not of the violator’s making; and other circumstances provided by law. In customs practice, the most valuable circumstance is discovering the error yourself and filing a supplementary declaration, paying the tax in full, before customs discovers it or orders an inspection. Decree 169/2026/ND-CP goes further: under Point a, Clause 2, Article 7 there is NO penalty where the supplementary declaration is filed within the statutory windows (before customs notifies a direct inspection of the file, or within 60 days from clearance and before an inspection decision, or a finalisation report corrected within 60 days); a late supplementary filing outside those windows is fined 10% under Clause 2, Article 10. Voluntary disclosure of this kind both mitigates the fine within its band and evidences a compliance attitude in the company’s profile. Conversely, be clear-eyed: there is no rule that a first offence is exempt from fines. A first offence can only weigh in mitigation, and minor violations with mitigating circumstances may attract a warning instead of a fine in some light cases.
The penalty process and the business’s rights within it
On discovering a violation, customs draws up an administrative violation record; the business has the right to explain in writing and present evidence — the single most important stage for putting mitigating circumstances and classification arguments into the file. The penalty decision must state the conduct, the provision applied, the amount and the compliance deadline. Check the decision carefully: correct provision, correct goods value and tax shortfall computation, and whether the mitigating circumstances you raised were recorded — errors on these points are the most promising grounds of complaint.
Disagreeing with a penalty: complaint or court action
A business that disagrees with a penalty decision has two routes: a complaint under the Law on Complaints — to the decision-maker or the immediate superior customs authority within the statutory time limit, with a second-level complaint or court action if the outcome is unsatisfactory; or an administrative lawsuit before the competent People’s Court seeking annulment of the decision. A practical warning: complaining or suing does not automatically suspend enforcement — fines and tax remain payable on time unless a competent authority grants a stay, failing which enforcement measures and late-payment interest follow. The right strategy is to pay the undisputed part on time while pursuing the complaint on the part that has grounds.
Frequently Asked Questions
1. How much is the fine for misdeclaring value or HS code?
It depends on the consequence. Misdeclaration with no duty shortfall: fines within the bands of Decree 169/2026/ND-CP depending on the nature of the conduct and the value of the goods. Misdeclaration causing a shortfall: a percentage of the tax difference under Article 10 of Decree 169/2026/ND-CP (10% where the business detects the error itself and files a late supplementary declaration, 20% where customs discovers it), plus full collection of the tax and late-payment interest; a supplementary declaration filed within the window at Point a, Clause 2, Article 7 attracts no penalty. Misdeclaration showing evasion or fraud is fined in multiples of the evaded tax and may lead to criminal proceedings.
2. Which mitigating factors apply, including voluntary disclosure?
Under Article 9 of the Law on Handling of Administrative Violations 15/2012/QH13, voluntary remediation of consequences, voluntary disclosure and sincere remorse are formal mitigating circumstances. In customs practice, detecting the error yourself, filing a supplementary declaration and paying the tax in full before customs discovers it carries the greatest weight when the authority fixes the fine within its band and when your compliance profile is assessed.
3. Is a first offence exempt from fines?
There is no exemption merely because it is a first offence. A first offence may be weighed as a mitigating factor, and minor violations with mitigating circumstances can in some cases attract a warning instead of a fine. But the obligation to pay any tax shortfall and late-payment interest in full remains — that is a remedial measure, not a fine, and is never waived on first-offence grounds.
4. Where do I complain if I disagree with a penalty decision?
Complain under the Law on Complaints to the officer who issued the decision or to the immediately superior customs authority; if dissatisfied with the outcome, file a second-level complaint or bring an administrative action before the competent People’s Court. Remember that a complaint does not suspend enforcement, so pay fines and tax on time while the complaint proceeds to avoid enforcement measures and late-payment interest.
This article has been quality-reviewed by the FLAW AI Legal Council
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