Decree No. 310/2025 NĐ-CP: a breakthrough in penalties on invoices & key changes businesses need to know

The Government has recently issued Decree No. 310/2025/NĐ-CP (hereinafter referred to as “Decree 310”) to amend and supplement Decree No. 125/2020/NĐ-CP (“Decree 125”), bringing breakthrough reforms in the administrative penalties for tax and invoice-related violations. Decree 310 officially takes effect from 16 January 2026.

Below is a summary of the most significant changes that businesses should take note of:

1. A “Revolution” in Penalties on Invoice Violations: From “Per Invoice Fines” to “Quantity-Based Framework Penalties”

This is regarded as the most substantial “liberation” introduced under Decree 310, easing financial pressure on taxpayers in determining penalty amounts.

Under Decree 125: Tax authorities often consider each wrong-timing invoice or unissued invoice as a separate violation. As a result, taxpayers face extremely large total penalties if multiple invoices are involved.

Under Decree 310: Where a taxpayer commits multiple violations within the same case, only one violation shall be penalized based on a fine framework corresponding to the total number of violated invoices.

The fine framework follows a progressive structure, enabling clearer classification of violation severity.

1.1. Violations for issuing invoices at the wrong time when selling goods or providing services:

• Lowest penalty: VND 500,000 – 1,500,000 (for 01 invoice).
• Progressive penalty increases for larger quantities (e.g., from 02, 10, 20, 50 to less than 100 invoices).
• Maximum penalty: VND 50,000,000 – 70,000,000 (for 100 invoices or more).

1.2. Violations for failure to issue invoices when selling goods or providing services:

• Lowest penalty: VND 1,000,000 – 2,000,000 (for 01 invoice).
• Maximum penalty: VND 60,000,000 – 80,000,000 (for 50 invoices or more).

2. Changes in Principles for Determining a “Single Violation”

Decree 310 replaces the term “at the same time” with “on the same day”. Specifically:
Where a taxpayer makes multiple incorrect declarations within the same day, or delays multiple reports of the same type, such violations will be treated as one violation, and only the highest fine framework will be applied.

3. Simplified Calculation of Aggravating and Mitigating Circumstances

• If one mitigating circumstance applies: the fine shall be reduced by 10% compared to the average penalty framework.
• If one aggravating circumstance applies: the fine shall be increased by 10% compared to the average penalty framework.

In addition:

• Where there are two or more mitigating circumstances, the minimum fine level will be applied.
• Where there are two or more aggravating circumstances, the maximum fine level will be applied.

4. Supplemented Definition of Force Majeure Events

Decree 310 provides explicit definitions of force majeure events (added under Clause 10, Article 2 of Decree 125), rather than referring to general administrative penalty regulations.

Circumstances considered force majeure include:
natural disasters, catastrophes, epidemics, fire or explosion, unexpected accidents, war, strikes, or other objective and unforeseeable events that cannot be overcome despite all necessary measures taken by the taxpayer

5. Other Notable Updates:

• New penalties (warnings or mandatory remedial measures) are introduced for late or non-submission of notifications by constituent units responsible for declarations under Resolution No. 107/2023/QH15 on Global Minimum Tax.
• No penalties shall apply to individuals who delay updating tax registration information when switching from identity cards/citizen ID cards to chip-based citizen ID cards/electronic ID cards

6. Key Notes on Transitional Provisions

As Decree 310 becomes effective from 16 January 2026, businesses must pay special attention to transitional application principles:

• For violations completed before 16 January 2026, penalties shall be applied in accordance with regulations in effect at the time of the violation.
• For violations committed before 16 January 2026 but identified after this date, penalties shall follow Decree 310.

• For violations already penalized before 16 January 2026 and currently under complaint or litigation, settlement shall comply with the law at the time of the violation.

BAKER TILLY A&C COMMENTS AND RECOMMENDATIONS

To ensure compliance and mitigate risks relating to new administrative penalties for tax and invoice violations, we recommend that our clients:

        ♦ Continue reviewing and standardizing procedures: Assess invoice issuance processes to ensure invoices are issued at the correct timing and in line with current regulations.

     ♦ Evaluate the financial impact of the new policy: Quantify potential financial exposure under the new penalty framework and assess implications on operational processes and decision-making.

        ♦ Stay updated with forthcoming guidance: Closely monitor additional regulations and instructions that may be issued in the upcoming period

This is an important time for businesses to review and adjust financial and commercial strategies to ensure alignment and efficiency amid a changing legal environment. Please contact Baker Tilly A&C for the latest updates and tailored advisory on compliance with VAT legislation for your business operations in Vietnam.

Contact Information

Mr. Nguyen Bao Anh – Deputy General Director in charge of Tax, Transfer Pricing & Outsourcing Services
Email: anh.nb@a-c.com.vn