How to handle output invoices from the previous period that were not declared in Vietnam?

How to handle output invoices from the previous period that were not declared in Vietnam?

According to Official Dispatch No. 4943/TCT-KK of 2015 issued by the General Department of Taxation, which provides guidance on tax declarations and supplementary tax declarations.

In cases where the taxpayer discovers that invoices and documents from previous periods were overlooked and not declared, they must declare and deduct them additionally as follows:

- For the seller, output invoices for sales occurring in a particular period should be declared additionally, adjusting the tax calculation period in which the invoice arose according to regulations.

Example 1: In April 2015, if a taxpayer discovers that an output VAT invoice from January 2015 was not declared, the taxpayer must submit a supplementary tax declaration and adjust the VAT tax return for the tax calculation period of January 2015 as per regulations.

- For the buyer, when they discover an unreported invoice from any period, they should declare and deduct it in the tax calculation period in which the invoice was discovered but before the tax authority or competent authority issues a decision, inspects, or audits at the taxpayer's headquarters.

Example 2: In May 2015, if a taxpayer discovers an invoice for purchases from December 2014 was not declared, the taxpayer should declare it in "Section I - Goods and services purchased during the period" on the 01/GTGT return for the tax calculation period of April 2015 (if still within the tax filing deadline) or May 2015 but must do so before the tax authority or competent authority announces a tax inspection or audit at the taxpayer’s headquarters.

How to handle output invoices from the previous period that were not declared in Vietnam?  (Image from the Internet)

When is the time for issuing VAT invoices in Vietnam?

According to Article 9 of Decree No. 123/2020/ND-CP, the timing of invoice issuance is specifically regulated as follows:

* Invoice issuance for goods sales

The time to issue an invoice for goods sales (including sales of state assets, seized assets, assets contributed to state funds, and sales from national reserves) is the time of transfer of ownership or right to use goods to the buyer, regardless of whether payment has been received or not.

* Invoice issuance for service provision

- The time to issue an invoice for service provision is when the service provision is completed, regardless of whether payment has been received or not.

- In cases where the service provider collects payment in advance or during service provision, the invoice is issued at the time of payment (excluding cases of deposits or advance payments to ensure the performance of services such as accounting, auditing, financial and tax consultancy, valuation, supervision consultancy, surveying, technical design, project investment preparation).

Note: Where goods are delivered multiple times or in partial sections, each delivery or handover must result in an invoice for the corresponding quantity and value of goods or services delivered.

* Invoice issuance timing in specific instances

(1) For providing services in large quantities or frequently, requiring time for data reconciliation between the service provider and customer, client.

The time to issue an invoice is upon completion of data reconciliation between parties but no later than the 7th day of the month following the month in which the service occurred or no more than 7 days from the end of the accounting period.

The accounting period as a base for calculating goods and services supplied is based on agreement between the seller and buyer.

(2) For telecommunications services (including value-added telecommunication services) and IT services (including payment intermediary services using telecom and IT platforms) requiring data verification between service businesses.

The time to issue an invoice is upon completion of data reconciliation of service charges according to economic contracts between service providers, but no more than 2 months from the month in which the service charge arose.

If telecommunication services (including value-added telecommunication services) are provided through prepaid card sales, service subscriptions where the customer does not require a VAT invoice or does not provide a name, address, tax code, at the end of each day, or periodically within the month, the service provider issues a general VAT invoice recording total revenue arising from services where the buyer does not take an invoice or does not provide a name, address, tax code.

(3) For construction and installation activities, the time to issue an invoice is upon acceptance and handover of completed works, construction items, or assembly volumes, regardless of whether payment has been received or not.

(4) For real estate businesses, infrastructure construction, house construction for sale or transfer, the timing of invoice issuance is specific to each case as follows:

- Not yet transferred ownership, usage rights: If payments are collected according to project progress or payment schedule in the contract, the invoice is issued on the payment day or according to the contract's payment agreement.

- Transferred ownership, usage rights: Invoice issuance coincides with the transfer of ownership or usage rights to goods to the buyer, regardless of whether payment has been received or not.

(5) For businesses that trade air transport services via websites and e-commerce systems:

Invoice issuance follows international conventions no later than 5 subsequent days from the issuance of service transport documents on the website and e-commerce systems.

(6) For oil exploration, extraction, and processing:

- The time to issue an invoice for crude oil, condensate, processed products from crude oil (including products consumed as pledged by the Government of Vietnam) is when an official sale price is determined by the buyer and seller, regardless of whether payment has been received or not.

- For the sale of natural gas, associated gas, coalbed methane delivered by pipeline:

Invoice issuance is at the time when buyer and seller determine the monthly delivered gas volume but no later than 7 subsequent days from the seller's notification of monthly gas volume delivery.

- If there are special warranties or commitments from the Government of Vietnam regarding invoice issuance timing, those terms are adhered to as per the warranty and commitment agreement by the Government of Vietnam.

How many types of invoices are there in Vietnam?

Based on the provisions specified in Article 8 of Decree No. 123/2020/ND-CP, the types of invoices are as follows:

(1) Value-added tax invoice

A value-added tax invoice is used by organizations applying value-added tax deduction methods for activities including:

- Selling goods, providing services domestically;

- International transportation;

- Exporting to non-tariff zones and cases deemed as exports;

- Exporting goods, providing services overseas.

(2) Sales invoice

A sales invoice is for organizations, individuals such as:

- Organizations, individuals calculating value-added tax via the direct method for activities:

+ Selling goods, providing services domestically;

+ International transportation;

+ Exporting to non-tariff zones and cases considered as exports;

+ Exporting goods, providing services overseas.

- Organizations, individuals in non-tariff zones when selling goods, providing services domestically and among each other in non-tariff zones, exporting goods, providing services overseas, must state “For organizations, individuals in non-tariff zones” on invoices.

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