Make false declaration for tax fraud of billion VND

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A Chinese shipment with false declaration seized by Ho Chi Minh Customs Department on May 15. Photo: T.H

20%-tax rate of goods declared 0%

Recently, Sai Gon Seaport Customs Branch of Zone 1 inspected imported goods under three customs declarations of PN. Agricultural Trading Service Co., Ltd (HCM City) and detected this company falsely declared code and tax rate of goods, leading to a shortage of more thanVND 400 million in tax. Specifically, thecompany implemented customs declarations to import agricultural machinery and products with HS code 84351010 and a tax rate of 0%. Through physical inspection, Customs discovered that the HS code goods is84361010 and tax rate is 20%. Sai Gon Seaport Customs Branch of Zone 1 issued a decision to collect tax arrears and fined the company with an amount of 20% of the difference of tax arrears of VND 85 million.

Similarly, K.L.P Import-Export Joint Stock Company falsely declared the code and import tax rate of goods and was detected and fined more than VND 300 million by the Sai Gon Seaport Customs Branch of Zone 1. The company’s infringing goods werenon-alloy steel (carbon content less than 0.6% by weight) with animport tax rate of 10% but the company declared 0%-tax rate, leading to the tax arrears. The value of the infringing goods is more than VND 2.1 billion.

According to Ho Chi Minh City Customs Department, per the Customs Law, enterprises candeclare and take responsibility for import-export goods, some enterprises declared the name and code of goods to reduce tax payable. Some enterprises enjoyed preferential tax rates and still falsely declared, with large tax arrears. Typically, V.Y Trading and Services Co., Ltd was chargedthe tax arrears of VND 1.5 billion for false declaration of goods name, code andtax rate, leading to a shortage of tax payable. This company imported flexographic printing plates, Toyobo Printight plates and declared the HS code 8712.00.10, and the tax rate of goods with C/O form E of 5%. Through physical inspection, Customs detected the actual HS code of goods was8712.00.30 and the tax rate with C/O form E 10%.

In addition, Sai Gon Seaport Customs Branch of Zone 1 collected tax arrears of VND 2.5 billion and fined LM Machine Tool Co., Ltd more than VND 512 million for false declaration of code and tax rate of goods.

Declaring with fraud purpose

According to Deputy Director of Ho Chi Minh City Customs Department Nguyen Huu Nghiep, the department detected many cases of tax fraud by making false customs declaration such as intentionally declaring many commodities but in fact there was only one commodity or vice versa for tax fraud; or declaring as other commodities with low tax rate and low price to be classified into Green, Yellow and Red channels or intentionally declaring with high tax rates but goods are banned, fake goods and conditional import goods.

The case of importing two containers of kid’stoys from China with a false declaration of name, code and trademarks goods detected by the Customs Enforcement Team of the Ho Chi Minh City Customs Department and the Sai Gon Seaport Customs Branch of Zone 1 on May 15 is typical. This shipment was named by ND Import Export Trading Investment Co., Ltd. on the customs declaration. According to the declaration, the imported goods were toys. However, through physical inspection, Customs detected the goods in these containers were kid’s toy motorcycles, big toy cars and kid’s bicycles with volume of thousands, including non-branded items.

According to the Customs Enforcement Team, the company falsely declared the name, code and trademark of goods for tax fraud. The team has worked with other forces to clarify the the tax fraud of this company.

Recently, the Customs Enforcement Team coordinated with the border gate customs branches to develop a specialised inspection and supervision plan. Many suspicious shipments have shifted inspection channel and detected the company has evaded hundreds of VND millions per shipment. According to the leader’s Customs Enforcement Team, some enterprises abused the risk management policy and intentionally made false declarations of goods names, categories, volumes, values, codes and tax rates, with the purpose of hiding the names of actual exported or imported goods for tax fraud.

Notably, some firmslocated in Ho Chi Minh City exported goods at seaports of Ho Chi Minh City, but opened customs declaration in other places to avoid detection by customs, such as the fraud of Saigon Asia Trading Co., Ltd., located at Binh Thanh District, Ho Chi Minh City, the company exported goods at Cat Lai port but opened 14 declarations and carried out procedures at Binh Phuoc Customs. This company declared to export 25 containers of veneer made from rubber wood, with the export tax rate of 10%, but the actual exported goods wassawn timber with the export tax rate of 25%. The value of the shipment is more than VND 11 billion, the amount of tax evasion nearly VND 3 billion.