If a sale invoice is issued with an 8% VAT under Decree 94 and contains errors, shall the replaced invoice issued after July 1, 2024 subject to 8% VAT in Vietnam?

If a sale invoice is issued with an 8% VAT under Decree 94 and contains errors, shall the replaced invoice issued after July 1, 2024 be subject to 8% VAT in Vietnam?

Decree 94/2023/ND-CP is a policy to reduce VAT to 8% from January 1, 2024, to June 30, 2024.

Currently, the VAT reduction policy is applied according to Decree 72/2024/ND-CP, effective from July 1, 2024, to December 31, 2024.

Regarding the time of invoice issuance for goods subject to an 8% VAT rate under Article 9 of Decree 123/2020/ND-CP, as follows:

Time of Invoice Issuance

1. The time of invoice issuance for the sale of goods (including state-owned assets, confiscated assets, national reserve goods) is the time of transfer of ownership or usage rights of goods to the buyer, regardless of whether payment has been made.

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Hence, the time of invoice issuance for the sale of goods is the time of transfer of ownership or usage rights of goods to the buyer, regardless of whether payment has been made.

Regarding the time of VAT determination for goods subject to an 8% VAT rate under Article 8 of Circular 219/2013/TT-BTC, as follows:

Time of VAT Determination

1. The time of VAT determination for goods is the time of transfer of ownership or usage rights of goods to the buyer, regardless of whether payment has been made.

Thus, the time of VAT determination for goods is the time of transfer of ownership or usage rights of goods to the buyer, regardless of whether payment has been made.

According to the above regulations, goods subject to an 8% VAT rate shall have the time of invoice issuance and the time of VAT determination coincide with the time of transfer of ownership of the goods.

Based on point b, clause 2, Article 19 of Decree 123/2020/ND-CP regarding handling invoices with errors, the seller is required to issue an adjusting or replacement invoice for the erroneous invoice.

Regarding the VAT rate recorded on the adjusted invoice issued after the 8% VAT policy under Decree 94/2023/ND-CP has expired, one can refer to Official Dispatch 2688/BTC-TCT in 2022 clarifying questions about transitioning between VAT rates of 8% and 10% as follows:

For invoices issued before February 1, 2022, with a 10% VAT rate, any adjustments due to errors in goods value, VAT, or returned goods occurring after February 1, 2022, must have the adjusted or return invoice issued at a VAT rate of 10%.

Thus, if the seller issues an 8% VAT invoice under Decree 93/2024/ND-CP and discovers errors after July 1, 2024, the adjusting invoice for the erroneous invoice will still apply the 8% VAT rate.

If a sale invoice is issued with an 8% VAT under Decree 94 and contains errors, shall the replaced invoice issued after July 1, 2024 be subject to 8% VAT in Vietnam? (Image from the Internet)

What are the current VAT rates in Vietnam?

Pursuant to Article 8 of Law on Value-Added Tax 2008 (amended by clause 3, Article 1 of the Law on Value-Added Tax Amendment 2013, Article 1 of the Law on Value-Added Tax, Special Consumption Tax, and Tax Management Amendment 2016, Article 3 of the Law Amending Laws on Tax 2014), and Decree 72/2024/ND-CP, the following VAT rates are applicable:

(1) The 0% tax rate applies to exported goods and services, international transportation, and goods and services exempt from VAT as stipulated in Article 5 of the Law on Value-Added Tax 2008, except in the following cases:

- Transfer of technology, transfer of intellectual property rights abroad.

- Reinsurance services abroad;

- Credit granting services;

- Capital transfer services;

- Derivative financial services;

- Postal and telecommunication services;- Exported products specified in clause 23, Article 5 of the Law on Value-Added Tax 2008.

Exported goods and services are those consumed outside Vietnam, in non-tariff areas; goods and services provided to foreign customers according to the regulations of the Government of Vietnam.

(2) The 5% tax rate applies to the following goods and services:

- Clean water for production and daily life;

- Ore for fertilizer production; pest and disease prevention substances and growth stimulants for livestock and plants;

- Dredging canal services, ponds, lakes serving agriculture; prevention, care, and eradication of pests for crops; preliminary processing and preservation of agricultural products;

- Crops, livestock, seafood products not yet processed, except for products specified in clause 1, Article 5 of the Law;- Semi-processed rubber latex; semi-processed rosin; mesh, nets, and fibers used for weaving fishing nets;

- Fresh food; unprocessed forest products, except wood, bamboo shoots, and products specified in clause 1, Article 5 of the Law on Value-Added Tax 2008;

- Sugar; by-products of sugar production, including molasses, bagasse, and mud sludge;

- Products made of jute, sedge, bamboo, rattan, leaves, straw, coconut shell, coconut husk, water hyacinth, and other handicrafts produced from agricultural by-products; semi-processed cotton; newsprint;

- Medical equipment and instruments, medical hygiene products; preventive and curative medicines; pharmaceutical products and raw materials for medicine production;

- Educational tools for teaching and learning, including models, drawings, boards, chalk, rulers, compasses, and specialized equipment for teaching, research, and scientific experiments;

- Cultural, exhibition, sports activities; art performances, film production; film importation, distribution, and projection;

- Children’s toys; various types of books, except those specified in clause 15, Article 5 of the Law on Value-Added Tax 2008;

- Scientific and technological services according to the provisions of the Law on Science and Technology.

- Selling, leasing, or leasing-purchasing social housing according to the provisions of the Housing Law.

(3) The 8% tax rate applies to certain goods and services subject to a VAT reduction (from 10% to 8%) according to Decree 72/2024/ND-CP.

(4) The 10% tax rate applies to goods and services not subject to 0%, 5% and 8% tax rates.

As such, depending on the taxable objects, the VAT rates effective from July 1, 2024, will be 0%, 5%, 10%, or 8%.

What are the basic contents of an e-invoice in Vietnam?

According to Article 10 of Decree 123/2020/ND-CP, the basic contents of an e-invoice include:

- Invoice name, invoice symbol, form number symbol

- Invoice copy name applicable to invoices printed by the tax authority as guided by the Ministry of Finance.

- Invoice number

- Seller's name, address, and tax code

- Buyer’s name, address, and tax code

- Name, unit of measure, quantity, unit price of goods, services, amount excluding VAT, VAT rate, total VAT by rate, total VAT amount, total payment including VAT.

- Seller's and buyer's signatures.

- Time of invoice issuance

- Time of digital signature on the e-invoice

- Tax authority’s code for e-invoices (if any).

- Fees, charges under the state budget, commercial discounts, promotion (if any), and other related contents (if any).

- Name and tax code of the organization printing invoices for tax authority-printed invoices.

- Script, digits, and currency displayed on the invoice.

- Other contents: In addition to the above contents, businesses, organizations, households, and individual businesses may add information about the emblem or logo to display the seller's brand or image. Depending on transaction characteristics and management requirements, the invoice can also show information about sales contracts, shipping orders, customer codes, and other information.

Furthermore, clause 14, Article 10 of Decree 123/2020/ND-CP stipulates that some cases of e-invoices do not necessarily include all the above-mentioned contents.