Is an invoice issued for sponsorship in Vietnam? What are regulations on security of e-invoices in Vietnam?

Is an invoice issued for sponsorship in Vietnam?

First, the issuance of invoices is regulated in Article 3 of Decree 123/2020/ND-CP as follows:

Interpretation of Terms

In this Decree, the following terms are understood as follows:

1. An invoice is an accounting document prepared by an organization or individual selling goods or providing services, recording information on the sale of goods or provision of services. An invoice can be presented as an e-invoice or one printed by the tax authority.

2. An e-invoice is an invoice either with or without a tax authority code, presented in e-data form, prepared by an organization or individual selling goods or providing services using e-means to record information on the sale of goods or provision of services as per the provisions of accounting and tax laws, including cases where an invoice is created from a cash register with a connection to transmit data electronically to the tax authority, in which:

a) An e-invoice with a tax authority code is one where the tax authority provides a code before the selling organization or individual sends it to the buyer.

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

b) An e-invoice without a tax authority code is one sent by the selling organization directly to the buyer without such a code.

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Preparing an invoice can be understood as issuing either a paper invoice or an e-invoice provided by the seller to the buyer.

Simultaneously, based on Official Dispatch 18553/CTHN-TTHT of 2023 which provides guidance on whether an invoice needs to be issued upon sponsorship as follows:

- Based on Decree 123/2020/ND-CP, regulations regarding invoices and documents:

+ Article 4 outlines the principles of issuing, managing, and using invoices and documents:

Principles of Issuing, Managing, and Using Invoices and Documents

1. When selling goods or providing services, the seller must issue an invoice to give to the buyer (including cases where goods and services are used for promotion, advertising, samples; goods and services used for donation, gifting, exchange, or compensation in wages to workers and internal consumption (except for internal circulation goods for further production processes); and goods provided under forms of lending, borrowing, or returning goods) and must record all required content as prescribed in Article 10 of this Decree. In cases of using e-invoices, the format must meet the data standards of the tax authority as defined in Article 12 of this Decree.

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+ Article 10 specifies the content of an invoice.

+ Article 12 specifies the format of e-invoices.

- Based on Clause 1, Article 5 of Circular 219/2013/TT-BTC guiding cases not required to declare, calculate VAT:

Cases Not Required to Declare, Calculate VAT

1. Organizations and individuals receiving compensation in money (including compensation for land and property on land when the land is recalculated according to a decision by a competent State authority), bonuses, support money, emissions rights transfers, and other financial receipts.

A business establishment receiving compensation money, bonuses, or support money, emissions rights transfer money, and other financial receipts must issue a receipt according to regulations. For business establishments disbursing money, the expense purpose determines the issuance of expenditure documents.

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In cases where the business establishment receives money from an individual or organization to provide services on their behalf, such as repairs, maintenance, promotion, or advertising, the necessary tax declaration and payment must be made according to regulations.

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Conclusion: Based on the above regulations, the Hanoi Tax Department advises as follows:

In cases where enterprises or organizations receive sponsorship money as specified in Clause 1, Article 5 of Circular 219/2013/TT-BTC of the Ministry of Finance, it is not required to issue an invoice for tax declaration or payment. Enterprises or organizations should issue a receipt as per regulations (invoice issuance is not required).

In cases where enterprises or organizations receive sponsorship money from other organizations or individuals to perform services on their behalf, such as repairs, maintenance, promotion, or advertising, they must issue an invoice for the buyer as prescribed in Clause 1, Article 4 of Decree 123/2020/ND-CP and record all required content according to Article 10 of Decree 123/2020/ND-CP. In the case of using e-invoices, they must conform to the tax authority’s data formatting standards as stipulated in Article 12 of Decree 123/2020/ND-CP and the necessary tax declaration and payment must be made according to regulations.

Thus, it can be seen that the receipt of sponsorship money does not require invoice issuance if it falls under specified categories.

Is an invoice issued for sponsorship in Vietnam? What are regulations on security of e-invoices in Vietnam? (Image from the Internet)

What are prohibited acts related to e-invoices in Vietnam?

According to Article 5 of Decree 123/2020/ND-CP, there are 7 prohibited actions related to e-invoices, including:

[1] Regarding tax officials

- Causing inconvenience and difficulty for organizations or individuals buying invoices and documents;

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

- Accepting bribery during inspections or audits of invoices.

[2] Regarding organizations, individuals selling or providing goods, services, and related parties

- Committing fraudulent acts such as using illegal invoices or using invoices illegally;

- Obstructing tax officials in the execution of their duties, specifically actions that harm the health or dignity of tax officials during invoice or document inspections;

- Unauthorized access, alteration, or destruction of the information system regarding invoices and documents;

- Offering bribes or engaging in other actions related to invoices and documents for wrongful benefits.

What are regulations on security of e-invoices in Vietnam?

According to Article 6 of Decree 123/2020/ND-CP, the regulations regarding the security of e-invoices are as follows:

* Invoices and documents must be preserved and stored ensuring:

- Safety, confidentiality, integrity, completeness, and unaltered state throughout the storage period;

- Proper and full-term storage according to accounting law regulations.

* e-invoices and documents are preserved and stored by e-means. Agencies, organizations, and individuals have the right to choose and apply methods of preserving and storing e-invoices and documents that fit the nature of operations and technological capabilities. e-invoices and documents must be readily available for printing or retrievable upon request.

* Invoices ordered by the tax authority, self-printed or pre-printed documents, must be preserved and stored in accordance with the following requirements:

- Untouched invoices and documents must be stored in warehouses following policies for the preservation of valuable documents.

- Issued invoices and documents in accounting units must be stored according to specific regulations for the preservation of accounting documents.

- Issued invoices and documents within organizations, households, or individuals not recognized as accounting units must be stored and preserved as private assets of those organizations, households, or individuals.