If e-invoices are suspended by enforcement in Vietnam, how to issue invoices to customers?

If e-invoices are suspended by enforcement in Vietnam, how to issue invoices to customers?

According to item a.2, point a, clause 2, Article 13 of Decree 123/2020/ND-CP, it stipulates the issuance of e-invoices with tax authority codes on an occurrence basis as value-added invoices in cases such as:

- Enterprises, economic organizations, and other organizations subject to value-added tax under the credit method in cases like:

+ Cessation of business operations but have not completed the procedures for terminating the tax identification number, with asset liquidation requiring invoices for buyers;

+ Temporary cessation of business operations requiring invoices for customers to fulfill contracts signed before the tax authority's notification of business suspension;

+ Being compelled by the tax authority by the measure of stopping the use of invoices.

Based on point d, clause 4, Article 34 of Decree 126/2020/ND-CP, it is stipulated as follows:

enforcement by suspending use of invoices

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Procedure for implementing enforcement measures to cease the use of invoices

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d) In the event that a taxpayer is applying the enforcement measure of ceasing the use of invoices and submits a written request to use invoices for the purpose of paying salaries to workers and covering costs to ensure continuous business operations, the tax authority shall allow the taxpayer to use invoices on an occurrence basis, provided that the taxpayer must immediately remit at least 18% of the revenue on the invoices used to the state budget.

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Additionally, according to Official Dispatch 37935/CTHN-TTHT in 2023 from the tax authority, it also guides on using invoices during enforcement as follows:

Based on the above regulations, Hanoi Tax Department has the following opinion:

If a company pays value-added tax via the credit method and is enforced by the tax authority by ceasing the use of invoices, it falls under the case entitled to receive e-invoices with tax authority codes on an occurrence basis. They should submit a request for e-invoices with codes as per Form No. 06/DN-PSDT Appendix IA attached to Decree No. 123/2020/ND-CP of the Government of Vietnam to the tax authority and access the tax authority's e-invoice system to issue e-invoices as prescribed in Clause 2 Article 13 Decree No. 123/2020/ND-CP.

The procedure for receiving, processing, and issuing codes for e-invoices on an occurrence basis is conducted as per the guidelines in Article 12 of Decision No. 1447/QD-TCT of the General Department of Taxation.

Thus, under the above-mentioned regulations, if enforced to cease the use of invoices (enforced to cease issuing e-invoices) but there is a need to issue invoices to customers, the following actions should be taken:

- Immediately remit at least 18% of the revenue on the invoices used to the state budget.

- Submit a request for e-invoices with tax authority codes as per Form No. 06/DN-PSDT Appendix 1A attached to Decree 123/2020/ND-CP of the Government of Vietnam to the tax authority.

- Access the tax authority's e-invoice system to issue e-invoices as prescribed in Clause 2 Article 13 Decree 123/2020/ND-CP.

Note: Using invoices that are suspended during the enforcement of ceasing the issuance of e-invoices (except when permitted by the tax authority) can result in a penalty of 20 - 50 million VND and the mandatory cancellation of the already used invoices (as per Article 28 Decree 125/2020/ND-CP).

If e-invoices are suspended by enforcement in Vietnam, how to issue invoices to customers? (Image from the Internet)

What are cases of enforcement by suspending use of e-invoices in Vietnam?

According to clause 1, Article 34 of Decree 126/2020/ND-CP, enforcement by suspending use of invoices is one of the tax enforcement measures applied by the tax authority against violating organizations and individuals. Specifically, this enforcement method is used in the following cases:

(1) The taxpayer is enforced to execute an administrative decision on tax management and cannot apply the following enforcement measures:

- Deduct money from the accounts of the entity enforced to execute the administrative decision on tax management at the State Treasury, commercial banks, or other credit institutions; account freezing;

- Deduct a part of the salary or income;

- Stop customs procedures for export or import goods;

(2) The required enforcement measures stipulated in (1) have been applied but do not fully collect the owed tax revenue into the state budget, or in cases stipulated in clause 3 Article 125 of Law on Tax Administration 2019 or upon request by the customs authority.

When is the Decision for enforcement by suspending use of e-invoices issued in Vietnam?

According to clause 2, Article 34 of Decree 126/2020/ND-CP, the basis for issuing the decision to enforce by stopping the use of invoices is as follows:

- Information about the taxpayer's invoices subject to enforcement in the tax authority's database or data from other agencies or organizations (if available).

- Information on the invoicing situation by the enforced taxpayer and other related organizations or individuals (if available) provided upon the tax authority's request in the event the database at the tax authority is not complete.