General Department of Taxation of Vietnam: What are guidelines for the prevention and control of e-invoice fraud?

What is an e-invoice?

According to Clause 2, Article 3 of Decree 123/2020/ND-CP, an e-invoice is defined as an invoice with or without a tax authority code, represented in e-data form. These invoices are created by organizations or individuals selling goods, providing services, using e-means to record the sale of goods or the provision of services as prescribed by the law on accounting and taxation. This definition includes cases where invoices originate from cash registers connected to the tax authority's e-data transmission system, where:

- An e-invoice with a tax authority code is an e-invoice for which the tax authority provides a code before the organization or individual selling goods or providing services sends it to the buyer.

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

- An e-invoice without a tax authority code is one that the selling organization or service provider sends to the buyer without the tax authority's code.

General Department of Taxation of Vietnam: What are guidelines for the prevention and control of e-invoice fraud? (Image from the Internet)

General Department of Taxation of Vietnam: What are guidelines for the prevention and control of e-invoice fraud?

On November 15, 2024, the General Department of Taxation of Vietnam issued Official Dispatch 5255/TCT-TTKT of 2024 regarding the strengthening of prevention and control of e-invoice fraud.

This involves enhancing information technology solutions to promptly detect and respond to cases of new technology, unreasonable invoice selling, or unlawful use of invoices to legitimize input costs, evade taxes, and take advantage of value-added tax (VAT) refunds from the state budget. The General Department of Taxation of Vietnam requests related units to focus on implementing the contents prescribed in Official Dispatch 5255/TCT-TTKT of 2024 as follows:

- Implement tasks, solutions, and directives by the General Department of Taxation of Vietnam in Directive 01/CT-TCT of 2023 on intensifying the review and inspection of invoices to prevent invoice fraud; Official Dispatch 2812/TCT-TTKT of 2023 on developing measures to combat the online trading of invoices; Official Dispatch 3638/TCT-VP of 2023 by the General Department of Taxation of Vietnam on enhancing e-invoice management.

- The Director of the Tax Department is fully responsible for assigning and organizing tasks down to each officer, team, or department to swiftly conduct controls and reconciliations according to lists of enterprises with outstanding issues on invoices or tax declarations that may lead to risks when using IT applications from the industry or local tax authority support systems. During control processes, when reconciling data, it is important to pay attention to the following content:

+ Incorrect invoice content recording as per Clause 7, Article 3 and Article 10 Decree 123/2020/ND-CP.

+ Tax VAT declaration adjustments and supplements occurring multiple times.

+ Review and reconcile the suitability and legality of filing between: limited supplementary declarations and supplementary explanations and related documents following Article 47 Tax Administration Law 2019 and Point 4, Article 7 Decree 126/2020/ND-CP.

+ Review invoices not declared in multiple periods but now declaring supplementary tax filing must comply with current regulations.

- Based on quick control and risk assessment at point 2 Official Dispatch 5255/TCT-TTKT of 2024, if the tax authority determines that an enterprise exhibits high tax invoice risk indicators, the tax authority conducts inspections either immediately at the tax office or adds them to the audit plan, checks the premises, and acts per regulations.

- Organize risk assessments, develop and execute specialized inspections and tax audits for taxpayers with high risks in using e-invoices, and identify enterprises conducting transactions with multiple-invoice users.

The development of public pricing, uniform implementation across the General Tax Department ensures that processes are handled consistently and optimally. In cases of discovering fraudulent practices during inspections, promptly transfer files to the appropriate authorities for handling according to regulations.

- Establish or reinforce the Steering Committee and Standing Task Teams to enhance management, prevention, and avoidance of difficulties in using e-invoices according to content in the Appendix attached to Official Dispatch 5255/TCT-TTKT of 2024.

Which are prohibited acts for tax officials concerning invoices and documents?

According to Article 5 of Decree 123/2020/ND-CP, prohibited acts in the field of invoice documentation for tax officials include:

- Causing inconvenience or difficulty to organizations or individuals purchasing invoices or documents;

- Engaging in acts of covering up or colluding with organizations or individuals to use illegal invoices or documents;

- Accepting bribes during inspections or audits regarding invoices.