On November 2, 2022, the Ministry of Finance has issued Circular No. 65/2022/TT-BTC detailing Clause 2, Article 91 of Decree No. 98/2020/ND-CP dated August 26, 2020 of the Government prescribing penalties for administrative violations against regulations on commerce, production and trade in counterfeit and prohibited goods, and protection of consumer rights.
The new Circular details Clause 2, Article 91 Decree No. 98/2020/ND-CP on illegal benefits obtained from administrative violations against regulations on commerce, production and trade in counterfeit and prohibited goods, and protection of consumer rights in case of imposition of the remedial measure which is enforced transfer to state budget of money, financial instruments, objects and other assets obtained from administrative violations or amounts equivalent to the value of the exhibits and instrumentalities sold, liquidated, hidden or destroyed inconsistently with the law.
– The illegal benefits obtained from administrative violations as prescribed in Article 37 of the Law on penalties for administrative violations, Point e Clause 3 Article 4 of the Decree No. 98/2020/ND-CP , and Clause 2 Article 3 of the Decree No. 17/2022/ND-CP are objects, money, financial instruments or other assets that violating entities obtain from the violations against regulations on commerce, production and trade in counterfeit and prohibited goods, and protection of consumer rights.
– The amount of illegal monetary benefits obtained from a violation is total amount of money obtained by the violating entity from that violation and equals the proceeds earned from the illegal transfer, sale or provision of goods or services after deducting direct costs of such goods or services which are determined according to documents and records provided by the violating entity to prove the legitimacy and validity of such costs.
– The amount of money obtained by the violating entity from the violation equals (=) the quantity of goods or volume of services illegally transferred, sold or provided multiplied by (x) the unit price minus (-) direct costs of such goods or services (if the violating entity has provided adequate documents and records to prove the legitimacy and validity of such costs). To be specific:
1) The quantity of goods or volume of services transferred, sold or provided shall be determined on the basis of declaration by the violating entity and inspection and verification by the officer competent to impose penalties;
2) The unit price of goods or services shall be determined on the basis of documents and records provided by the violating entity. If such documents and records are not available, the unit price shall be determined according to the market price of similar goods or services applied at the time of detection of the violation.
– In case the quantity, volume and unit price cannot be determined, the amount of illegal benefits is total amount of money earned by the violating entity from the illegal transfer, sale, destroy or provision of goods or services.
A notable change of the new Circular is that direct costs of goods or services are minus if the violating entity has provided adequate documents and records to prove the legitimacy and validity of such costs.
This Circular comes into force from January 01, 2023 and supersedes the Circular No. 149/2014/TT-BTC dated October 10, 2014 of the Minister of Finance.
Enforcement Department