Not automatically — but absolutely possible. A back-tax assessment is an administrative measure; criminal prosecution applies when the conduct meets all elements of the crime of tax evasion under Article 200 of the 2015 Penal Code. A company that has already paid back taxes and administrative fines can still face criminal charges — the two tracks run in parallel and do not exclude each other.
Back-tax assessment vs. criminal prosecution: two independent tracks
A back-tax assessment is administrative: the tax authority compels the taxpayer to pay the full amount of underpaid or evaded tax, plus administrative fines and late-payment interest. Criminal prosecution belongs to criminal law and applies only when tax evasion reaches the level of social danger described in Article 200 of the 2015 Penal Code (as amended by Clause 47, Article 1 of Law 12/2017/QH14; Law 86/2025/QH15 did not amend Article 200).
Accordingly, one case may be handled on both tracks at once: administrative (back-tax plus fines) and criminal (investigation, prosecution, trial). Having paid back taxes does not mean “the case is closed.”
Criminal thresholds for tax evasion (Article 200, Penal Code)
- Clause 1 (individuals): evading tax of VND 100 million to under VND 300 million; or under VND 100 million where the offender was previously administratively sanctioned for tax evasion and reoffends, or has an unexpunged criminal record → a fine of VND 100–500 million or imprisonment of 3 months to 1 year.
- Clause 2: evaded tax of VND 300 million to under VND 1 billion; or committed in an organized manner, abusing position or authority, repeat offending, etc. → a fine of VND 500 million–1.5 billion or imprisonment of 1–3 years.
- Clause 3: evaded tax of VND 1 billion or more → a fine of VND 1.5–4.5 billion or imprisonment of 2–7 years.
- Clause 4 (supplementary penalties): a fine of VND 20–100 million; a ban on holding positions, practicing a profession or performing certain work for 1–5 years; confiscation of part or all of assets.
- Clause 5 (commercial legal entities): evaded tax of VND 200 million or more → a fine of VND 300 million–10 billion; suspension of operations for 6 months–3 years; permanent suspension in the circumstances of Article 79 of the Penal Code.
Article 200 is among the 33 offences listed in Article 76 of the Penal Code for which commercial legal entities bear criminal liability. In other words, a company can be criminally prosecuted for tax evasion, while the individuals involved (organizers, practitioners, accomplices) are simultaneously prosecuted in their respective roles.
When does the tax authority transfer the file to investigators?
Law 108/2025/QH15 on Tax Administration (passed 10 December 2025, effective 1 July 2026, replacing Law 38/2019/QH14 which expired 1 July 2026) provides in Clause 5, Article 22 that the head of a tax administration agency shall transfer inspection files to the investigation agency upon discovering tax violations showing signs of tax evasion or fraud serious enough to warrant criminal prosecution.
The regulation issued with Decision 489/QD-TCT/2022 of the General Department of Taxation (Clause 1, Article 10) details this mechanism:
- Where an inspection or audit discovers tax evasion showing signs of a crime → transfer the file with a written prosecution proposal to the Investigation Agency within 05 working days.
- Where signs of a crime are discovered while considering administrative sanctions → transfer the file immediately and do not issue an administrative sanction decision for that conduct.
- Where a sanction decision has already been executed and signs of a crime are later discovered → still transfer the file to the investigation agency.
The governing principle: the same conduct is not subject to both administrative sanctioning and criminal prosecution.
Is a prior administrative sanction a shield against prosecution?
No. A prior administrative sanction does not bar investigators from opening a criminal case when signs of a crime exist. The law in fact treats reoffending more harshly:
A history of administrative sanctioning for tax evasion followed by reoffending (or an unexpunged criminal record) is itself an element of the offence for evaded amounts under VND 100 million under Clause 1, Article 200.
Two distinct situations must not be confused:
- A prior sanction record for tax evasion → an element of criminal liability under Article 200 (unfavourable to the offender).
- No administrative sanction for the same conduct already transferred for criminal handling → the principle in Decision 489/QD-TCT/2022 (avoiding “double punishment” for one act).
Does a criminal case extinguish the back-tax obligation?
No. The obligation to pay the full evaded tax, fines and late-payment interest exists independently of criminal proceedings — the company must still pay in full even while the case is under investigation, prosecution or trial.
Moreover, voluntarily paying the full tax due and remedying the consequences counts as a mitigating circumstance (Point b, Clause 1, Article 51 of the Penal Code: the offender voluntarily repairs, compensates for damage or remedies consequences).
Practical precedents
- The Asanzo case (2019): the company was administratively fined VND 26.3 billion with VND 40.5 billion in back taxes, while its file was simultaneously transferred for criminal handling — a textbook example of the two tracks running in parallel.
- Judgment 132/2025/HC-PT dated 4 September 2025: the court annulled an administrative sanction decision where the tax authority should have transferred the file to the investigation agency upon discovering signs of a crime instead of issuing the sanction.
Practical risks and recommendations
- Where conduct shows intentional deceit (fake invoices, double books, concealed revenue, fabricated expenses) and the amount reaches Article 200 thresholds, the risk of criminal prosecution is real — do not assume “it’s only back taxes.”
- Voluntarily declaring and paying the full tax before detection is a significant mitigating factor at sentencing.
- Upon receiving a tax inspection/audit decision or signs that the file may be transferred to investigators, engage counsel early to assess criminal exposure rather than handling the matter as a purely accounting-tax issue.
Frequently asked questions
After paying back taxes, is criminal prosecution certain?
No. The dividing line is the sign of a crime: the conduct must involve intentional deceit and the evaded amount must reach the Article 200 thresholds. Many cases stop at the administrative level (back-tax plus fines).
Does paying the full back-tax amount avoid criminal liability?
Not automatically. The payment obligation is independent of criminal liability; voluntary full payment is only a mitigating circumstance at sentencing, not a ground for exemption.
If the company is prosecuted, are managers personally exposed?
Possibly. Because Article 200 falls under Article 76 of the Penal Code, the legal entity bears criminal liability while the individuals involved (directors, chief accountants, direct perpetrators) may be prosecuted in their respective roles as organizers, practitioners or accomplices.
How fast must the tax authority transfer a criminal file?
Under Decision 489/QD-TCT/2022, when an inspection or audit discovers tax evasion showing signs of a crime, the tax authority transfers the file with a prosecution proposal to the Investigation Agency within 05 working days.
References
- Articles 200, 51, 76 and 79 of the 2015 Penal Code (as amended in 2017; Law 86/2025/QH15 did not amend Article 200).
- Clause 5, Article 22 of Law 108/2025/QH15 on Tax Administration (effective 1 July 2026; replacing Law 38/2019/QH14).
- Clause 1, Article 10 of the Regulation issued with Decision 489/QD-TCT/2022 of the General Department of Taxation.
- Judgment 132/2025/HC-PT dated 4 September 2025; the Asanzo case (2019).
See also: Preparing for Tax Inspections in Companies in Vietnam · Tax Compliance for Chinese Companies in Vietnam
FLAT Law Firm assists companies in assessing tax-criminal exposure and dealing with tax authorities and prosecution bodies in back-tax and tax-audit cases with criminal signs. 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.