Short answer: the monetary threshold and violation history are the core dividing line. Tax evasion of VND 100,000,000 to under VND 300,000,000 (or under VND 100 million with a prior administrative sanction for evasion or an unexpunged conviction, and reoffending) → criminal prosecution under Article 200 of the Penal Code. Below that threshold without recidivism → administrative sanction under Decree 125/2020/ND-CP (consolidated document 27/2026/VBHN-ND-BTC): a fine of 1–3 times the evaded tax. One act is punished only once — once criminally prosecuted, the same act cannot also be administratively sanctioned (and vice versa).
The criminal track: tax evasion (Article 200, Penal Code)
Under Article 200 (2015 Penal Code, Law 100/2015/QH13; Consolidated Document 135/VBHN-VPQH dated 05/9/2025):
- Paragraph 1: evasion of VND 100,000,000 to under VND 300,000,000, or under VND 100,000,000 with a prior administrative sanction for tax evasion or a prior conviction (unexpunged) for this or the listed offences and reoffending → fine of VND 100–500 million or 3 months–1 year imprisonment.
- Paragraph 2: VND 300,000,000 to under VND 1,000,000,000 (or organized, abusing position, 2+ offences, dangerous recidivism) → fine of VND 500 million–1.5 billion or 1–3 years’ imprisonment.
- Paragraph 3: VND 1,000,000,000 or more → fine of VND 1.5–4.5 billion or 2–7 years’ imprisonment.
- Commercial legal entities (Article 76 covers Article 200): starting threshold of VND 200,000,000–under VND 300,000,000 (or VND 100–under 200 million with prior sanction/conviction) → fine of VND 300 million–1 billion.
Article 200 was most recently amended by Law 12/2017/QH14 (effective 01/01/2018); Law 86/2025/QH15 (effective 01/7/2025) did not amend Article 200.
The administrative track: Decree 125/2020/ND-CP
Critical validity warning: Decree 125/2020/ND-CP (promulgated 19/10/2020, effective 05/12/2020) has been amended 3 times: Decree 102/2021/ND-CP (effective 01/01/2022), Decree 310/2025/ND-CP (promulgated 02/12/2025, effective 16/01/2026), Decree 291/2026/ND-CP (promulgated 21/7/2026, effective 21/7/2026). The latest consolidated document is 27/2026/VBHN-ND-BTC (Ministry of Finance, 27/8/2026). All citations of Decree 125/2020 in this article follow this consolidated version — not the original 2020 text.
Second validity warning: Law on Tax Administration 38/2019/QH14 expired on 01/7/2026, replaced by Law on Tax Administration 108/2025/QH15 (promulgated 10/12/2025, effective 01/7/2026; Article 13 and the e-invoice rules for household businesses in Article 26 effective from 01/01/2026). Every reference to the “Law on Tax Administration” in this article means Law 108/2025/QH15.
Article 2(1): the qualitative boundary
An administrative tax violation is a culpable act violating tax administration/tax law “that does not constitute a crime” and is subject to administrative sanction. This is the root qualitative divide: conduct meeting the elements of a crime goes down the criminal track; it is no longer an administrative violation.
Article 17: sanctioning tax evasion (administrative level)
Fine of 1x / 1.5x / 2x / 2.5x / 3x the evaded tax, depending on circumstances: ≥1 mitigating circumstance → 1x; no aggravating or mitigating → 1.5x; 1 aggravating → 2x; 2 aggravating → 2.5x; 3+ aggravating → 3x; plus mandatory payment of the full evaded tax to the state budget.
The acts in Article 17(1) (points a–g) mirror the structure of Penal Code Article 200 but apply below the criminal threshold — under the Article 200 threshold and without recidivism.
Article 16: misdeclaration causing tax shortfall — not tax evasion
Misdeclaration causing a shortfall in tax payable (or overstated exempted/reduced/refunded tax) → 20% of the understated tax + mandatory payment of the shortfall and late-payment interest.
The pivotal point in Article 16(1)(c): where a record identifies the act as tax evasion but it is a first violation, with a supplementary declaration filed and the full tax paid before the sanctioning decision is issued → it is treated as misdeclaration (20% fine only), not tax evasion. This is the key practical boundary between “misdeclaration” and “tax evasion” on the administrative track.
Article 5: the “one act” principle
Multiple administrative violations are each punished separately, except the combined cases: (a) same-day misdeclaration of multiple items across tax dossiers → only one act punished at the highest frame; (b) same-day late filing of multiple declarations for the same tax → only one act at the highest frame (dossiers falling under tax evasion separated); (đ/e) multiple acts of issuing invoices at the wrong time/not issuing invoices in the same case → one act punished by total invoice count; (g) misdeclaring multiple items on one dossier that falls under both tax-procedure rules and Article 16/17 → only one act punished under Article 16 or Article 17.
The bridge between the two tracks
One act, one punishment: once criminally prosecuted for tax evasion, the same act cannot also be administratively sanctioned — and vice versa. There is no “both an administrative fine and a criminal prosecution” for the same act.
Administrative first → recidivism → criminal: Article 200(1) of the Penal Code sets the condition “was administratively sanctioned for tax evasion… and reoffends”. Meaning: a prior violation at the administrative level (Article 17, Decree 125) is the springboard for a later violation — even under VND 100 million — to be criminally prosecuted.
Determining the evaded tax amount: per Article 2(3) of Decree 125 — the tax payable to the state budget as prescribed, detected and determined by a competent authority in the inspection/audit record. No self-invented formula.
Transitional note: under Article 3 of Decree 310/2025, administrative violations completed before 16/01/2026 are governed by the document in force at the time of the violation.
Summary table
| Criterion | Administrative (Decree 125) | Criminal (Article 200, Penal Code) |
|---|---|---|
| Evaded amount | Under VND 100M, no prior sanction/conviction | VND 100M–under 300M (p1); or under 100M + prior sanction/conviction and reoffending |
| Financial penalty | 1–3x evaded tax (Art. 17); 20% for misdeclaration (Art. 16) | Fine VND 100M–4.5B or 3 months–7 years’ imprisonment |
| Legal entities | Not applicable | Starting threshold VND 200M |
| Double punishment | No — one act punished once | No — one act punished once |
FAQ
1. How do misdeclaration and tax evasion differ?
Misdeclaration (Article 16): 20% of understated tax. Administrative-level evasion (Article 17): 1–3x the evaded tax. Article 16(1)(c) is the boundary: first violation + supplementary filing and full payment before the sanction decision → treated as misdeclaration only.
2. Can one act draw both an administrative fine and criminal prosecution?
No. The one-act-one-punishment rule: once criminally prosecuted, no administrative sanction for the same act (and vice versa).
3. Prior administrative sanction for evasion, now evading under VND 100M?
Criminally prosecuted under Article 200(1) — the prior administrative sanction is an alternative to the monetary threshold.
4. Is citing the original 2020 Decree 125 still correct?
No. Cite the consolidated document 27/2026/VBHN-ND-BTC (27/8/2026) — the decree has been amended 3 times.
5. Is the 2019 Law on Tax Administration still in force?
No. Law 38/2019/QH14 expired 01/7/2026; the current law is Law on Tax Administration 108/2025/QH15.
Practical recommendations
- Assess each case on two layers: qualitative (is it a crime? — Article 2(1), Decree 125) and quantitative (the Article 200 threshold).
- Do not overlook the Article 16(1)(c) “shield”: a first violation + proactive supplementary filing and full payment before the sanction decision can recharacterize “evasion” down to “misdeclaration”.
- A prior administrative sanction for tax evasion is the “bridge” to criminal liability — businesses should track their sanction history.
Legal basis (verified 14/10/2026)
- 2015 Penal Code (Law 100/2015/QH13) — Article 200, Article 76; per Consolidated Document 135/VBHN-VPQH dated 05/9/2025.
- Decree 125/2020/ND-CP — Articles 2(1), 2(3), 5, 16, 17; per Consolidated Document 27/2026/VBHN-ND-BTC dated 27/8/2026 (Ministry of Finance).
- Law on Tax Administration 108/2025/QH15 (effective 01/7/2026) — current law, replacing Law 38/2019/QH14 (expired 01/7/2026).
Suggested internal links: article on tax evasion under Article 200 (FLAW-P0027), article on VAT fraud (FLAW-P0029).
Need advice on tax risk? Contact FLAT Law Firm for an assessment of your specific situation.
For reference only, not legal advice. Content quality-checked by the AI Legal Council; not yet reviewed by a human lawyer.