Are e-invoices required to have an authentication code in Vietnam?

Are e-invoices required to have an authentication code in Vietnam?

Based on Clause 2, Article 3 of Decree 123/2020/ND-CP, it is regulated that e-invoices are invoices with or without a tax authority’s authentication code, presented in e-data form created by organizations or individuals selling goods or providing services via e-means to record the information of goods sold or services provided according to the regulations of the law on accounting and tax law. This includes invoices created from cash registers that are connected and transfer e-data to the tax authority, wherein:

+ An authenticated e-invoice is an e-invoice that is issued an authentication code by the tax authority before the organization or individual selling goods or providing services sends it to the buyer.

The tax authority's code on the e-invoice includes a transaction number, which is a unique number generated by the tax authority’s system, and a string of characters encoded by the tax authority based on the seller's information on the invoice.

+ An unauthenticated e-invoice is an e-invoice issued by an organization selling goods or providing services to the buyer without a tax authority’s authentication code.

In accordance with the above provisions, e-invoices can be either with or without a tax authority’s authentication code. Thus, it is not mandatory for e-invoices to have an authentication code.

Are e-invoices required to have an authentication code? (Image from the Internet)

What principles must be ensured in the issuance, management and use of e-invoices in Vietnam under the Law on Tax Administration?

Based on Article 4 of Decree 123/2020/ND-CP, the principles for creating, managing, and using e-invoices are regulated as follows:

- When selling goods or providing services, the seller must issue an invoice to deliver to the buyer (including cases where goods or services are used for promotions, advertising, samples; Goods and services given, donated, exchanged, used for paying workers’ wages, or internally consumed, except for goods internally moved for continuing the production process); Goods exported in the forms of loans, leases, or returns and must fully record the contents according to the provisions at Article 10 of Decree 123/2020/ND-CP; In the case of using e-invoices, they must follow the standard data format of the tax authority stipulated in Article 12 of Decree 123/2020/ND-CP.

- When deducting personal income tax, collecting tax, fees, and charges, the tax deducting organization, fee-collecting organization, and tax collecting organization must issue a tax deduction certificate or receipts for tax, fees, and charges to the person whose income is subject to tax deduction, taxpayers, fee payers and must fully record the contents as specified in Article 32 of Decree 123/2020/ND-CP.

In case of using e-receipts, they must follow the standard data format of the tax authority.

In case an individual authorizes tax finalization, no tax deduction certificate is issued for personal income tax.

For individuals not signing a labor contract or signing a labor contract for less than 03 months, the organization or individual paying the income may choose to issue a tax deduction certificate for each tax deduction or issue one tax deduction certificate for multiple tax deductions in one tax period.

For individuals signing a labor contract of 03 months or more, the organization, or individual paying the income only issues one tax deduction certificate for one tax period.

- Before using invoices and receipts, businesses, economic organizations, other organizations, households, and individual businesses, tax collectors, fee collectors must register to use with the tax authority or notify issuance according to the provisions at Article 15, Article 34, and Clause 1 of Article 36 of Decree 123/2020/ND-CP.

For invoices and receipts printed by the tax authority, the tax authority shall notify issuance according to Clause 3 of Article 24 and Clause 2 of Article 36 of Decree 123/2020/ND-CP.

- Organizations, households, individual businesses during usage must report the usage status of invoices purchased from the tax authority, report the usage status of printed receipts, self-printed or purchased receipts from the tax authority according to the provisions at Article 29, Article 38 of Decree 123/2020/ND-CP.

- The registration, management, and use of e-invoices and e-documents must comply with the provisions of the laws on e-transactions, accounting, taxation, and tax administration as defined in Decree 123/2020/ND-CP.

- Invoice and document data when selling goods or providing services, document data when performing tax payment transactions, tax deductions, and paying taxes, fees, and charges form the database serving tax management work and provide invoice and document information to related organizations and individuals.

- Business organizations, economic organizations, and other organizations that sell goods and provide services can delegate third parties to issue e-invoices for sales and services.

Invoices delegated to third parties must still display the name of the selling entity as the delegating party.

Delegation must be confirmed by a written agreement between the delegating party and the delegate, fully detailing the delegation's purpose, duration, and payment method, and must notify the tax authority when registering to use e-invoices.

In the case of invoices delegated as e-invoices without a tax authority’s authentication code, the delegating party must transfer the e-invoice data to the tax authority through a service provider. The Ministry of Finance provides detailed guidance on this content.

- Fee-collecting organizations may delegate the issuance of fee receipts to third parties. Receipts delegated to third parties must still display the name of the fee-collecting organization as the delegating party. Delegation must be confirmed by a written agreement between the delegating party and the delegate, fully detailing the delegation's purpose, duration, and payment method, and must notify the tax authority when issuing receipts.

Which authority is responsible for developing the database on e-invoices in Vietnam?

Based on Article 93 of Law on Tax Administration 2019, it is regulated as follows:

Database on e-invoices

1. The tax authority is responsible for organizing the construction, management, and development of the database and technical infrastructure of the invoice information system; organizing the collection, processing of information, managing the invoice database, and ensuring the maintenance, operation, security, and safety of the invoice information system; creating a standard format for invoices.

The database on e-invoices is used to serve the tax management and provide e-invoice information to related organizations and individuals.

2. Enterprises and economic organizations specified in Clause 2, Article 91 of this Law using e-invoices without a tax authority’s authentication code must provide e-invoice data according to the regulations of the Minister of Finance.

3. The Ministry of Industry and Trade, Ministry of Natural Resources and Environment, Ministry of Public Security, Ministry of Transport, Ministry of Health, and other relevant authorities are responsible for connecting and sharing necessary related information and data with the Ministry of Finance to build the e-invoice database.

4. When inspecting goods circulating in the market, in cases of using e-invoices, state agencies and authorized persons access the tax authority's e-portal to search for e-invoice information to serve management needs, without requiring the provision of paper invoices. Related authorities are responsible for using equipment to access and search for e-invoice data.

5. The Minister of Finance regulates the model, management, and use of e-stamps; regulates the lookup, provision, and use of e-invoice information; regulates the provision of e-invoice information in cases where invoice data cannot be looked up due to incidents, natural disasters affecting Internet access.

Thus, the tax authority is responsible for developing the database on e-invoices.