Not automatically. This is one of the most common misconceptions in tax cases: many believe that “paying the full tax before prosecution means escaping punishment.” The truth under current law: Article 200 of the 2015 Penal Code contains no mechanism of “voluntary full payment of tax exempts criminal prosecution.” Paying back the tax is a mitigating circumstance — significant, but not a “get-out-of-jail card.”
Article 200 provides no exemption for payment
The full text of Article 200 of the 2015 Penal Code (Clauses 1–3: sentencing frames for individuals; Clause 4: supplementary penalties; Clause 5: penalties for commercial legal entities) contains no clause stating that “an offender who voluntarily makes supplementary declarations and pays the full tax before detection is naturally excluded from or exempted from criminal liability.”
A rule that “paying the full evaded tax and administrative fines before the case is prosecuted exempts criminal prosecution” once existed in the 1999 Penal Code — but it has been entirely removed and does not exist in the 2015 Penal Code. Any argument based on the old rule has no legal value.
This fundamentally differs from the special mechanism for bribery offences (Article 364 of the Penal Code), where the law does provide for exemption upon voluntary reporting. The two mechanisms must not be confused.
The real legal value of voluntary payment: a mitigating circumstance
Under Point b, Clause 1, Article 51 of the Penal Code, “the offender voluntarily repairs, compensates for damage or remedies consequences” is a mitigating circumstance. Voluntarily paying back evaded tax, late-payment interest and fines is the textbook form of remedying consequences.
The practical rule: the earlier the payment and the more cooperative the conduct, the more favourable at sentencing — but the criminal process (investigation, prosecution, trial) continues normally. Payment does not make the case “disappear.”
Exemption only in special cases (Article 29)
The law provides for exemption from criminal liability only in special cases under Article 29 of the Penal Code, with strict cumulative conditions, including: voluntary surrender before the act is discovered; full confession; effective contribution to detecting and investigating the crime; efforts to minimize consequences; voluntary remedy…
In practice, paying after an inspection/audit conclusion or a prosecution decision generally fails the “before discovery” condition — so the Article 29 door in tax evasion cases is very narrow.
The decisive timeline: before or after discovery
- Payment before discovery (voluntary surrender, proactive declaration and remedy before authorities detect the act): may lead toward considering exemption under Article 29 — but all strict statutory conditions must still be met; nothing is automatic.
- Payment after inspection, audit or prosecution: retains value only as a mitigating circumstance under Article 51 at sentencing.
Enforcement practice shows: where a taxpayer voluntarily makes supplementary declarations and pays the full tax, late-payment interest and fines before the tax authority conducts an inspection/audit or before the case is prosecuted, the matter is usually handled administratively (back-tax plus fines) for lack of criminal elements. But this is enforcement practice — it must be described as “a chance to avoid criminal handling,” never as “entitled to exemption” as a statutory right.
Even if prosecuted, the payment obligation survives
Even after a criminal case is opened, the obligation to pay the full evaded tax, late-payment interest and fines survives independently. Moreover, fulfilling this obligation is a condition for being considered for a reduced sentence — evading payment only worsens the situation.
Practical recommendations
- Upon discovering tax errors: voluntarily declare and pay the full tax, interest and fines as early as possible — before any tax inspection or audit.
- Do not harbour the illusion that “payment settles everything”: alongside financial remedy, seriously assess criminal exposure with counsel.
- Keep full documentation proving the voluntary, proactive nature of the supplementary declaration and payment — the basis for requesting mitigating circumstances (and, in special cases, Article 29 consideration).
- Distinguish your case from offences with special exemption mechanisms (such as bribery) — do not misapply one offence’s mechanism to another.
Frequently asked questions
Does paying the full tax before prosecution avoid imprisonment?
Not automatically. Article 200 has no payment-based exemption mechanism. Full payment is only a mitigating circumstance at sentencing; the criminal case may still proceed.
Did a “pay to avoid prosecution” rule exist before?
A similar rule existed in the 1999 Penal Code but has been entirely removed; the current 2015 Penal Code contains no such provision. The old rule may not be invoked.
When could payment lead to exemption from criminal liability?
Only by fully satisfying the special conditions of Article 29 of the Penal Code, the key one being voluntary surrender and remedy before the act is discovered. Payment after inspection or prosecution fails this condition.
What about voluntary supplementary declaration before a tax audit?
This is the most favourable scenario: the matter is usually handled administratively (back-tax plus fines) for lack of criminal elements. But understand it correctly — this is enforcement practice (“a chance to avoid”), not a statutory right of exemption.
References
- Article 200, Point b Clause 1 Article 51, and Article 29 of the 2015 Penal Code (amended 2017).
- Clause 5, Article 22 of Law 108/2025/QH15 on Tax Administration (effective 1 July 2026).
- Tuoi Tre newspaper (8 October 2026): legal commentary that Article 200 provides no automatic exemption ground for voluntarily paying the full tax before detection.
See also: Preparing for Tax Inspections in Companies in Vietnam · Tax Compliance for Chinese Companies in Vietnam
FLAT Law Firm accompanies companies in proactive supplementary declarations, remedying tax consequences, and assessing and managing criminal exposure. Contact us via our contact page.
This article is for general reference only and does not constitute legal advice. Each specific case should be assessed based on its actual records and the laws in force at the time of application.
For reference only, not legal advice. Content quality-checked by the AI Legal Council; not yet reviewed by a human lawyer.