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Official Gazette

Thursday, June 30, 2022

Businesses must entirely use e-invoices from late 2020

Updated: 16:27’ - 07/12/2019
One year after the release of Government Decree 119 of 2018 on e-invoices in goods sale and service provision, the Ministry of Finance on September 30 issued a circular providing more detailed guidelines on this matter.

Circular 68, which takes effect on November 14, is hoped to help enterprises switch from paper invoices to electronic ones more easily and quickly.

Worthy of note, the circular requires all business entities to entirely use e-invoices from November 1 next year.

In light of this, the period from November 1, 2018, the effective date of Decree 119, through October 31, 2020, will be the transitional period for preparation for e-invoice issuance. During this period, entities that have not yet received a tax office’s request for conversion of paper invoices into e-invoices may continue to use paper invoices under current regulations.

Talking about the advantages of e-invoices, Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry (VCCI), said in a forum held in late July in Hanoi that with e-invoices, enterprises can reduce by up to 70 percent of invoice issuance steps and 90 percent of invoice-related disputes, shorten up to 99 percent of the time for payment and invoice management, and save 80 percent of the cost for each invoice.

However, according to Loc, the application of e-invoices required technical infrastructure facilities which not all enterprises are able to equip. In addition, the cash-using habit of Vietnamese people was also the reason why e-invoices were slow to be applied on a large scale.

VCCI Vice Chairman Hoang Quang Phong delivers a speech at conference on new tax policies and e-invoice regulations on November 5__Photo: Internet

Optional contents of e-invoices

According to Circular 68, not all contents of an e-invoice are compulsory. For instance, the buyer’s digital signature is not required, even when making e-invoices for goods sale or service provision to customers abroad.

In case the buyer is a business establishment and meets the technical conditions for making a digital or electronic signature on the e-invoice made by the seller, the e-invoice must bear digital or electronic signatures of the seller and buyer as agreed upon.

For e-invoices at supermarkets and trade centers issued to buyers being non-business individuals, they are not required to state the names, addresses and tax identification numbers of the buyers.

For an e-invoice for the sale of petroleum to non-business individuals, it is not needed to include such details as title, form code, code and number of the e-invoice; name, address, tax identification number and e-signature of the buyer; digital or electronic signature of the seller; and value-added tax rate. However, the seller must store all e-invoices issued to such individuals under regulations and make these invoices available for search at the request of competent agencies.

For e-invoices being stamps, tickets or cards, they are not required to contain electronic or digital signatures of sellers; names, addresses, and tax identification numbers of buyers, tax amounts, and VAT rates. In case electronic stamps, tickets and cards are printed with par values, the units of calculation, quantities and unit prices do not have to be shown.

For e-documents for air transport services issued via websites and e-commerce systems according to international practices to individual non-business buyers and identified as e-invoices, they do not need to show their codes, form code and ordinal numbers, VAT rates, tax identification numbers and addresses of the buyers, and digital or electronic signatures of the sellers.

If the above e-documents are issued to individuals of business or non-business organizations, they will not be regarded as e-invoices. In this case, air transport service providers or their agents must issue e-invoices to the service users with the contents prescribed by law.

Under the circular, other e-documents which are not required to contain all prescribed contents include invoices for provision of construction and installation services, goods delivery-cum-transport notes in electronic form, and invoices for payment of interline services among airlines. 

E-invoicing time

In the spirit of Decree 119, the time for issuance of an e-invoice is the time of transfer of the right to own or use goods to the buyer, in case of goods sale, or the time of completion of service provision or the time of issuance of the service provision invoice, in case of service provision, regardless of whether the payment is made or not.

In case of multiple deliveries or handover of each goods item or service provision stage, an invoice showing the volume and value of the goods or services must be issued upon each delivery or handover.

For the cases not mentioned in Decree 119, the new regulation provides specific instructions below.

For electricity, water, telecommunications, television or information technology services which are provided for a certain period, e-invoices must be made within seven days from the date of reading the water or electricity meters or the last date of the service provision period as agreed upon between the service providers and users.

In the meantime, for provision of construction and installation services, e-invoices must be issued at the time of conducting the pre-acceptance test and handover of construction works or work items or completed construction and installation volumes, regardless of whether the payment is made or not.

As for real estate business, in case payments are made according to a project’s phases or under the signed contract and the ownership or use rights of the real estates have not been transferred to buyers or users, e-invoices will be made at the time of making payment or as agreed upon in the contract.

In case the ownership or use rights of the real estates have been transferred to buyers or users, the time of e-invoice issuance must comply with the provisions applicable to goods sale and service provision, or multiple deliveries or handover of each goods item or service provision phase as mentioned above.

For air transport services with e-documents issued according to international practices via websites or e-commerce systems, e-invoices will be made within five days after such e-documents are issued.

Suspension of use of e-invoices

Under Circular 68, tax offices will suspend the grant of e-invoice identification numbers to enterprises, economic or other organizations, or business households or individuals if they (i) have their tax identification numbers invalidated; (ii) are not operating at the registered addresses as detected by the tax offices; (iii) inform their business suspension to a competent state agency; or (iv) receive the tax offices’ notices of suspension of the use of e-invoices for the purpose of coerced payment of tax arrears.

Tax offices will also suspend the issuance of e-invoice identification numbers if detecting that the above entities use e-invoices for sale of smuggled, banned or counterfeit goods or goods infringing upon intellectual property rights; or use e-invoices for sham sale or provision of goods or services in order to appropriate others’ money.

Businesses will be administratively sanctioned and have to suspend the use of e-invoices with tax offices’ identification numbers if they are detected as having been established for purchase and sale or use of unlawful e-invoices or for illegal use of e-invoices.

Handling of e-invoices containing errors

As regulated in the circular, when the seller detects that an e-invoice with the tax office’s identification number not yet sent to the buyer contains errors, the former must notify the tax office of the cancellation of such e-invoice, then prepare a new one bearing the authorized person’s digital or electronic signature and send it to the tax office for grant of a new e-invoice identification number.

If the tax office finds an error in the e-invoice, it will send a notice to the seller. Within two days after receiving the notice, the seller will have to notify the tax office of the cancellation of the e-invoice and issue the new one bearing the authorized person’s digital or electronic signature.

However, if an e-invoice containing errors has been sent to the buyer, the seller will have to handle it on a case-by-case basis, depending on what the error is.

Specifically, if the error is made in the buyer’s name or address, the seller should inform it to the buyer and the tax office. In this case, another e-invoice is not required.

If the error is related to tax identification number, invoiced amount, tax rate, tax amount or goods description, a new e-invoice will be issued in replacement of the old one.-

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