Apartment management board fined nearly 120 billion: Many issues need to be clarified

Residents must pay management and operation fees, parking fees... when living in apartments - Photo: TTD

From this, there are many issues that need to be clarified to rectify the activities of the apartment management board or amend tax regulations and other issues to put these activities into order.

Only receipt, no invoice

According to research, the management boards of some apartment buildings said they had asked the tax authorities and were told that the management and operation costs of apartment buildings are, in principle, paid by the owners and users of the apartment buildings to the investors or the management boards, not from sales or service provision activities.

In addition, the fine of up to nearly 120 billion VND for the act of "tax evasion" of 453 million VND, according to experts, is too heavy.

Mr. Nguyen Tuan Vy (residing in Thu Duc City) said that for many years, the apartment building where his family lives has only sent monthly management fee payment notices by paper slip. This fee notice includes a management fee of 7,000 VND/m2, a parking fee of 70,000 VND/motorbike and water according to the rate prescribed by the water supply company.

After receiving the voucher, residents will pay directly or transfer money to the provided account number before the 30th of each month, otherwise the water will be cut off.

"Every time there is a notice that we will transfer the payment, the collection place does not send back a payment confirmation or any other invoice confirming the payment," Mr. Vy said.

Similarly, at another apartment building in Thu Duc City, resident Tran Minh Tung said that the management fee notification and fee payment transactions were all done online when the management board (because this place does not have a management board) sent the fee notification form online and residents transferred money to the personal account number of the head of the management board.

"The management board does not send any confirmation, invoice or receipt, but if the management fee is not paid on time within the month, the apartment's water will be cut off," said Mr. Tung.

Tuoi Tre's observations at many apartment buildings in districts 1, 4, 7, 10... show that recently residents have only received emails, paper slips or notifications via Zalo about the management fees to be paid. Some apartment buildings managed by foreign enterprises will have emails confirming the amount of fees paid each month without invoices.

Representatives of investors of many apartment projects in Ho Chi Minh City said that normally, when the Management Board has not been established, the investor will manage and operate the apartment building for a short period of time and directly collect management fees. At that time, the management fees will be fully invoiced according to regulations.

However, after transferring to the Board of Directors, the management and operation will be handed over to the Board of Directors to decide on management, fee collection and invoice issuance as agreed by the Board of Directors and the management board.

The head of the management board of an apartment building in Ho Chi Minh City said that there was a time when invoices were issued with a 10% VAT, but residents complained so the unit temporarily stopped.

Up to now, this unit is waiting for the Board of Management's opinion on getting residents' opinions because if invoices are issued, residents will pay an additional 10% VAT while the management board is only the unit collecting on behalf of the Board of Management.

"We are waiting for the Board of Directors' decision. If the Board of Directors and residents agree, we will issue invoices with an additional 10% VAT each month," he said.

People look for information from the management board at an apartment building in Ho Chi Minh City - Photo: TTD

Where to get money to pay?

The fact that the Management Board of Conic Southeast Asia apartment building was fined nearly 120 billion VND for not issuing invoices when selling goods and providing services to residents, evading taxes in the amount of 453 million VND, has caused confusion and worry for many businesses and the Management Boards of many apartment buildings in the area.

Because in reality, most management boards in apartment buildings do not declare or issue invoices when collecting money for providing services to residents.

Mr. Nguyen Van Duoc, General Director of Trong Tin Tax Consulting Services Co., Ltd., said that the local tax authorities and the Tax Department responded in writing that "Based on the provisions of Decree 125 issued in 2020 by the Government, administrative violations that are repeated at different times will be handled "for each violation" causing many difficulties for businesses.

Accordingly, if a taxpayer violates repeatedly, the following acts will be considered aggravating circumstances, each aggravating circumstance will increase the average fine by 10% of the fine bracket.

The above administrative fines are too large, making it impossible for businesses to fulfill their tax obligations. This not only affects the survival of businesses after completing their obligations to pay fines, but also affects the effectiveness and efficiency of handling violations.

According to Mr. Duoc, the penalty for tax violations under the 2015 Penal Code for tax evasion is a maximum fine of VND4.5 billion for individuals and VND10 billion for organizations (Article 200). Or, a maximum fine of VND500 million for individuals and VND1 billion for organizations for the crime of illegally printing, issuing, and trading invoices (Article 203).

"In other words, administrative sanctions are much higher than criminal sanctions, which is not consistent with the spirit of administrative and criminal sanctions," Mr. Duoc said.

The director of a tax consulting company in Ho Chi Minh City also said that the above administrative penalties are not in accordance with legal regulations and the actual situation.

"The tax authority has applied Clause 3, Article 5 of Decree 125/2020 to punish each act in cases of repeated violations, which are determined to be aggravating circumstances in accordance with Decree 125 but not in accordance with the Law on Handling of Administrative Violations," he said.

The current apartment buildings are managed by the Management Board and the Management Board. The Management Board is elected at the apartment building conference and operates for a term, with the function of representing residents and investors (if any) to supervise and ensure that the management and use of the building comply with legal regulations.

The apartment management board is the unit hired by the investor or the management board to perform the operational tasks for that apartment building. The apartment management board has the function of collecting fees for apartment management and operation services.

Not a sales activity

A representative of an apartment management and operation enterprise said that in April 2024, the Tax Department of Region 2 (formerly the Ho Chi Minh City Tax Department) issued an official dispatch stating that the management and operation costs of apartment buildings are, in principle, paid by the owners and users of the apartment buildings to the investor or the Management Board, this is not a sales or service provision activity.

Therefore, when collecting management and operation fees and other collections and payments according to the regulations on management and use of apartment buildings or agreements with owners and users of apartment buildings, the Management Board, investors or collection units shall prepare collection documents (without invoices), and shall not declare or pay VAT or corporate income tax on this revenue.

For other revenues, the apartment management board/management board shall base on the unit's tax calculation method to prepare invoices, declare and pay VAT and corporate income tax according to regulations.

Laws must be amended to suit reality.

According to Mr. Nguyen Van Duoc, the administrative handling viewpoint as applied by the tax authority above leads to very high fines, putting pressure on those who are subject to administrative violations (enterprises, taxpayers...) and are unable to enforce the administrative sanction decision, leading to the goal of handling administrative violations not being achieved.

This will also be the reason why administrative penalty decisions are not enforced within the prescribed 12-month period.

To ensure consistency with the 2012 Law on Handling of Administrative Violations and the 2020 amended Law on Handling of Administrative Violations, according to Mr. Duoc, it is necessary to unify the viewpoint: Multiple administrative violations are "aggravating circumstances" and are not punished for each violation.

The Ministry of Finance also needs to speed up the revision of Decree 125 to comply with the Law amending and supplementing the Law on Administrative Violations.

In addition, the maximum fine is applied to the total fine of all violations to ensure the principle of administrative handling is deterrent, while reducing pressure on those subject to administrative violations as well as being suitable for practice.

Tax authorities talk about the 120 billion VND fine

Talking to Tuoi Tre about the reason why the Management Board of Conic Southeast Asia apartment building was fined up to 119.8 billion VND, although it was determined that it only evaded more than 453 million VND in taxes due to not creating 7,260 invoices when providing services to residents, the Binh Chanh District Tax Team said the heaviest fine was for selling goods without creating invoices.

According to Article 52 of the Law on Administrative Violations, amended and supplemented in 2020, the penalty for selling goods without invoices will be calculated on each invoice.

The first ticket carries a fine of 15 million VND. From the second ticket, an aggravating circumstance of multiple violations is applied with a fine of 16.5 million VND/ticket.

People learn about the rules of an apartment building in Ho Chi Minh City - Photo: TTD

For the act of not making 7,260 invoices when collecting fees from apartment building management activities, the tax authority issued a decision to impose an administrative penalty with a total amount of more than 119 billion VND.

Binh Chanh District Tax Team has also transferred all tax evasion records of this apartment building's management board to the investigation agency.

Previously, in the process of handling an individual's complaint against the Management Board of this apartment building, the Binh Chanh District Tax Team recorded that the Management Board had two sources of income. One was revenue from the telecommunications station rental contract, the apartment building management and operation company had invoiced and declared value added tax (VAT) on all revenue according to the contract.

However, the Board of Directors did not declare corporate income tax (CIT) on the revenue shared from the above contract.

The second source of revenue is from apartment building management (management fees, parking fees, gas and water fees) of 242 apartments for 30 months, from May 2022 to October 2024, but there were also no invoices (7,260 sheets), no declarations, and no tax payments.

After receiving a written request for opinions on whether the revenue from apartment building management (management fee, parking fee, gas fee, water fee) must be invoiced, declared, and taxed or not, the Binh Chanh District Tax Team was confirmed by the Tax Department of Region 2 that "apartment building management and operation services are subject to VAT and corporate income tax according to regulations...".

Accordingly, if established to collect money from owners and users of apartment buildings and provide management and operation services, the Management Board must declare and pay VAT and corporate income tax according to regulations. The use of invoices by the Management Board is implemented according to the provisions of Decree No. 123-2020 of the Government...

ANH HONG - NGOC HIEN

Source: https://tuoitre.vn/vu-ban-quan-tri-chung-cu-bi-phat-gan-120-ti-nhieu-van-de-can-lam-ro-20250513232351807.htm