Enterprises and business entities operating in Vietnam are required to follow strict and sometimes tedious compliance procedures in order to be aligned with the corporate legal framework set by the Vietnamese authorities. One of the important compliance provisions companies need to adhere to is the e-invoice and electronic records registration, which we cover in this article.
The most recent Decree that regulates e-invoice registration requirements is Decree 123/2020/ND-CP, which comes into effect from 1 July 2022. A significant change arising from Decree 123 is the delay to the deadline for compulsory e-invoice implementation, which has been extended from 1 November 2020 to 1 July 2022, providing more time for organisations operating in Vietnam to transition to the e-invoice system.
It is important to note that organisations using self-printed invoices, pre-printed invoices, e-invoices with or without a verification code, or which had purchased invoices from the Tax Authorities before the issuance date of the Decree, will be allowed to continue using such invoices until 30 June 2022.
Types of invoices and classification
According to article 8, invoices covered by the Decree include the following:
i. Value Added Tax Invoice, which is an invoice used for the domestic sales of goods and services by organisations and individuals that declare Value Added Tax (“VAT”) under the credit method; organisations in business cooperation with individuals
ii. Sales Invoice, which is an invoice used for the domestic sales of goods and services by organisations and individuals that declare VAT under the direct method; organisations in Vietnam which are partners of overseas digital platform providers (without a permanent establishment in Vietnam) pay income from digital information content products and services to individuals under agreements with the overseas digital platform providers
iii. Electronic invoice used for selling public assets
iv. Invoice used for selling national reserves
v. Other documents which are treated as invoices including: tickets, cards or documents which have other names.
E-invoice registration process
The registration process that companies operating in Vietnam need to undertake to register for e-invoice usage is regulated by Article 15, Decree 123/2020/ND-CP, and it is comprised of the following components:
The required Dossier for e-invoice registration submission should include:
- Decision on application of e-invoices
- Application for use of e-invoices (Form No. 01/DKTD-HDDT)
- E-invoice template
The accepted e-invoices will be listed in website: http://tracuuhoadon.gdt.gov.vn
Enterprises, other organisations, household and individual businesses should apply for use of e-invoices (including e-invoices for sale of public property or national reserve goods) through e-invoice service providers.
Applications for free-of-charge use of authenticated e-invoices may be submitted via the web portal of the General Department of Taxation (“GDT”) or an e-invoice service provider entrusted by the GDT. If enterprises transmit e-invoice data directly to tax authorities, they shall submit their application for use of e-invoices via the web portal of the GDT.
The application for use of e-invoices is to be made using Form No. 01/DKTD-HDDT. Within 1 working day from receipt of the application for use of e-invoices, the tax authority will send an electronic notice of approval or refusal of the application, prepared according to the form No. 01/TB-DKDT as presented below.
Destruction of printed invoices
From the receipt of the notice of approval of use of e-invoices from the tax authority, the relevant enterprise, business entity, other organization, household or individual business shall terminate the use of e-invoices whose issuance has been announced and destroy any unused physical invoices whose issuance has been announced. The destruction of unused physical invoices must follow procedures provided in Article 27 hereof.
Invoices must be destroyed within 30 days from the date on which the destruction is notified to the tax authority.
If an invoice is expired according to the tax authority’s notice (in case of enforcement of payment of tax debts), the relevant enterprise, business entity, household or individual business shall carry out the destruction of the invoice within 10 days from the date of the tax authority’s notice or the date on which the lost invoice is found. The notice of invoice destruction result must be sent to the supervisory tax authority within 5 working days from the date of invoice destruction.
Invoicing time
- Invoices for sale of goods are to be issued when the right to own or use goods is transferred to buyers, whether the payment of the invoiced amount is made or not
- Invoices for provision of services are to be issued when the service provision is finished whether the amount on the invoice is paid or not. Where services are prepaid or money is paid during service provision, the date of invoice is the payment date (excluding payments of deposited amounts or advance payments which are made to ensure the execution of contracts for provision of some services)
- Where multiple deliveries are required, or each item or service phase is accepted, it is mandatory to issue an invoice showing quantity, value of goods or service for each respective delivery or acceptance
- Refer to Clause 4, Article 9, Decree 123/2020/ ND-CP for more specific cases about invoicing timings
Content elements of the E-invoice
Article 10, Decree 123/2020/ND-CP has specific details on how to fill-in certain specific items in the e-invoice: name, address, tax code of seller/buyer, name of goods/services, unit, quantity, unit price, VAT rate, amount payable, electronic signature, currency, etc.
The text in an invoice must be written in Vietnamese language. If foreign language text is necessary, it must be placed between parentheses ( ) on the right or below the Vietnamese text and must be smaller than the Vietnamese text. If the text has to be written in Vietnamese without diacritics, it must not cause the readers to misunderstand its contents.
Numbers on the invoice must be written in Arabic numerals: 0, 1, 2, 3, 4, 5, 6, 7, 8, 9.
In case an authenticated or unauthenticated e-invoice contains errors, Article 19, Decree 123/2020/ND-CP details guiding on how to handle erroneous invoices in specific cases.
Suspension of use of e-invoices
According to Article 16 of Decree 123/2020/ND-CP, enterprises, business entities, other organisations, household or individual businesses are to suspend their use of authenticated and unauthenticated e-invoices in the following cases:
- An enterprise, business entity, other organisation, household business or individual business has its Tax Identification Number (“TIN”) invalidated
- An enterprise, business entity, other organisation, household business or individual business does not operate at the registered location as verified and announced by the tax authority
- An enterprise, business entity, other organisation, household business or individual business has sent a notification of business suspension to a competent authority
- An enterprise, business entity, other organisation, household business or individual business is banned from using e-invoices by the tax authority for the purpose of enforcement of payment of tax debts
- E-invoices are used to sell smuggled goods, banned goods, counterfeits, goods violating intellectual property rights as detected and informed by competent authorities
- E-invoices are used for short selling of goods or services for fraudulent purposes as detected and informed by competent authorities
- A business registration authority or relevant authority requests an enterprise to suspend operation in a conditional business line after finding that this enterprise does not fully satisfy the business conditions prescribed by law
For more details on e-invoices and Decree 123, please check out our previous article here.
We advise investors and businesses operating in Vietnam to peruse the e-invoice registration prerequisites and be familiar with the process of creating an e-invoice, preparing its content, setting the correct time of invoice and ensure that all the necessary compliance elements are met, in order to avoid any potential penalties or future compliance risks.
Reach out to our team of experts for more information on e-invoices provisions or any other compliance related matters in Vietnam.
Huynh Thi Minh Phuong – Accounting Supervisor – phuong.huynh@Vieter.com
Nguyen Hoang Y Hieu – Accounting Officer – hieu.nguyen@Vieter.com
Bui Phuong Chi – Accounting Officer – chi.bui@Vieter.com
Kevin Lam – Partner – k.lam@Vieter.com
Matthew Lourey – Managing Partner – m.lourey@Vieter.com