Yes. Violations of the State’s accounting regulations causing serious consequences may lead to criminal prosecution for the crime of violating State regulations on accounting causing serious consequences under Article 221 of the 2015 Penal Code — an offence introduced by the 2015 Penal Code, with three sentencing frames reaching up to 20 years’ imprisonment. Notably, commercial legal entities do not bear criminal liability for this offence.
The legal framework: Article 221 of the 2015 Penal Code
Article 221 (per consolidated text 135/VBHN-VPQH dated 5 September 2025; Law 86/2025/QH15 did not amend Article 221) provides:
Clause 1 — basic frame: non-custodial reform up to 3 years or 1–5 years’ imprisonment
A person who abuses position or authority to commit any of the following acts, causing damage of VND 100 million to under VND 300 million, or under VND 100 million where previously disciplined for the same conduct and reoffending:
- Forging, misrepresenting, agreeing with or coercing others to forge, misrepresent or erase accounting documents;
- Enticing, agreeing with or coercing others to provide or certify false accounting information or figures;
- Keeping assets of the accounting unit or related assets off the books;
- Destroying or intentionally damaging accounting documents before the retention period prescribed by the Accounting Law;
- Maintaining two or more sets of financial accounting books to keep assets, capital or funds off the books.
Clause 2 — aggravated frame: 3–12 years’ imprisonment
Committed for profit; in an organized manner; using sophisticated schemes; or causing damage of VND 300 million to under VND 1 billion.
Clause 3 — especially serious frame: 10–20 years’ imprisonment
Causing damage of VND 1 billion or more.
Clause 4 — supplementary penalties
Ban on holding positions or performing certain work for 1–5 years; confiscation of part or all of assets. Note: under the original text, Clause 4 does not include a monetary fine — some secondary sources adding “a fine of VND 10–50 million” are inaccurate.
Subject of the offence: individuals abusing position or authority
This offence applies to individuals abusing position or authority within an accounting unit — chief accountants, directors, persons entrusted with financial or accounting management, etc. It applies generally to all types of units obliged to organize accounting work, not only state-owned enterprises.
The major difference from tax evasion (Article 200): Article 221 is not among the 33 offences in Article 76 of the Penal Code — therefore commercial legal entities bear no criminal liability for accounting violations. Only the individuals committing the acts are prosecuted.
The boundary between Article 221 and Article 200 (tax evasion)
- Article 221 focuses on falsifying the accounting regime and causing damage — not necessarily aimed at tax evasion. Example: maintaining double books to conceal assets, or destroying accounting documents to cover up management misconduct.
- Article 200 focuses on tax evasion — schemes to reduce tax payable.
The two offences may concur on the same chain of conduct: e.g., double books that both falsify accounting (Article 221) and serve tax evasion (Article 200). In practice, investigators typically commission damage assessments and seize books and electronic accounting data to draw the line. This is a complex borderline area requiring case-by-case assessment rather than rigid formulas.
Article 221 should also be distinguished from neighbouring provisions: Article 220 (violations on management and use of State assets causing loss and waste) and Article 222 — always verify the exact article number when citing.
The Accounting Law — the referenced specialized statute
Article 221 directly refers to the “State regulations on accounting,” chiefly Accounting Law 88/2015/QH13 (amended by Law 56/2024/QH15 and Law 108/2025/QH15). A typical reference is the statutory retention period for accounting documents cited at Point d, Clause 1, Article 221 (destroying accounting documents before the retention period). Full compliance with the accounting regime under the Accounting Law is the “safe zone” against Article 221 exposure.
Practical risks and recommendations
- Never maintain two sets of books in any form — the conduct is expressly listed at Point dd, Clause 1, Article 221.
- Do not destroy or damage accounting documents before the statutory retention period under the Accounting Law, including electronic records.
- All adjusting entries and off-book records must be supported by valid vouchers and approved through proper authority.
- Managers and chief accountants must understand: accounting misconduct does not stop at administrative sanctions — once damage thresholds are met, individual criminal liability (up to 20 years in the especially serious frame) is a real possibility.
- Upon discovering systemic accounting errors, proactively review, remedy and consult counsel before authorities intervene.
Frequently asked questions
Can unintentional accounting errors trigger Article 221?
Article 221 requires “abusing position or authority” to commit the listed acts — i.e., deliberate, intentional conduct (forging, coercing, intentional destruction). Ordinary unintentional bookkeeping errors do not constitute the crime, though the line is assessed by prosecution bodies on evidence.
Can a company be criminally prosecuted for accounting violations?
No. Article 221 is not under Article 76 of the Penal Code, so commercial legal entities bear no criminal liability for this offence — only the individuals committing the acts are prosecuted. This fundamentally differs from tax evasion (Article 200).
What if conduct both falsifies accounting and evades tax?
Both offences may concur where the conduct both distorts the accounting regime and aims at tax evasion, with all elements of each offence met. Prosecution bodies draw the line based on damage assessments and collected evidence.
Is destroying old vouchers to “clear storage” a violation?
Possibly — destroying them before the retention period under the Accounting Law, with damage reaching the threshold, falls under Point d, Clause 1, Article 221. Accounting documents may only be destroyed after the retention period and following proper procedures.
References
- Article 221 of the 2015 Penal Code (per consolidated text 135/VBHN-VPQH dated 5 September 2025; Law 86/2025/QH15 did not amend Article 221).
- Article 76 of the 2015 Penal Code (33 offences for which commercial legal entities bear criminal liability — excluding Article 221).
- Accounting Law 88/2015/QH13 (amended by Law 56/2024/QH15 and Law 108/2025/QH15).
See also: Preparing for Tax Inspections in Companies in Vietnam
FLAT Law Firm advises on accounting-regime compliance, reviews criminal exposure in corporate finance-accounting governance, and defends managers and chief accountants where violations are alleged. 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.