Vietnam: May the parties agree to issue invoice after transferring 100% of the payment for services?

Vietnam: May the parties agree to issue invoice after transferring 100% of the payment for services?

Based on Article 9 of Decree 123/2020/ND-CP stipulates as follows:

Time of invoice issuance

1. The time of invoice issuance for the sale of goods (including sales of state assets, confiscated assets, contribution to state funds, and sales of national reserve goods) is the time of transferring ownership or right to use the goods to the buyer, regardless of whether payment has been received.

2. The time of invoice issuance for service provision is the time of completion of the service provision, regardless of whether payment has been received. If the service provider collects payment before or during the service provision, the time of invoice issuance is the time of payment (excluding cases of deposits or advances to ensure contract performance for services such as accounting, auditing, financial consulting, tax consultation; valuation; surveying, technical design; supervision consultancy; project construction investment).

3. In the case of multiple deliveries or delivery of each item, or service stage, each delivery or handover must be invoiced for the corresponding volume or value of goods or services.

Thus, the time of invoice issuance for the sale of goods is the time of transferring ownership or right to use the goods to the buyer, regardless of whether payment has been received.

The time of invoice issuance for service provision is the time of completion, regardless of whether payment has been received.

Therefore, in the aforementioned case, it is not necessary for the company to transfer the full amount before issuing an invoice (not based on the contents of the contract agreed by the parties).

Vietnam: May the parties agree to issue invoice after transferring 100% of the payment for services? (Image from the Internet)

Is the buyer's address on the invoice required to be as those written on the certificate of household business registration in Vietnam?

Based on point a, clause 5, Article 10 of Decree 123/2020/ND-CP stipulates as follows:

Contents of the invoice

...

4. Name, address, and tax code of the seller

The invoice must display the name, address, and tax code of the seller as per the name, address, and tax code recorded on the business registration certificate, branch registration certificate, household business registration certificate, taxpayer registration certificate, tax code notification, investment registration certificate, cooperative registration certificate.

5. Name, address, and tax code of the buyer

a) In the case where the buyer is a business establishment with a tax code, the name, address, and tax code of the buyer displayed on the invoice must be written according to the business registration certificate, branch operation registration certificate, household business registration certificate, taxpayer registration certificate, tax code notification, investment registration certificate, cooperative registration certificate.

In instances where the name or address of the buyer is too long, the seller on the invoice may abbreviate certain common nouns such as: "Ward" abbreviated to "P"; "District" abbreviated to "Q"; "City" abbreviated to "TP"; "Vietnam" abbreviated to "VN"; or "Joint Stock Company" abbreviated to "JSC", "Limited Liability Company" abbreviated to "LLC", "industrial zone" abbreviated to "IZ", "manufacturing" abbreviated to "MFG", and "Branch" abbreviated to "BR"... but must ensure full detail of house number, street, ward, district, city to accurately identify the name and address of the enterprise and consistent with the business registration, taxpayer registration of the enterprise.

b) In the case where the buyer does not have a tax code, it is not necessary to display the buyer's tax code on the invoice. In certain cases of selling goods or providing services to individual consumers stipulated in clause 14 of this Article, it is not necessary to display the name or address of the buyer on the invoice. In cases of selling goods or providing services to foreign customers visiting Vietnam, the information on the buyer's address can be replaced by passport number or immigration documents and nationality of the foreign customer.

Thus, in cases where the buyer is a business establishment with a tax code, the name, address, and tax code of the buyer displayed on the invoice must be written according to the business registration certificate, branch registration certificate, household business registration certificate as per regulations.

What are regulations on handling unauthenticated e-invoices sent to the buyer if errors are found?

Based on clause 2, Article 19 of Decree 123/2020/ND-CP stipulates that in the event of an e-invoice with a tax authority code or an e-invoice without a tax authority code sent to the buyer, if the buyer or seller discovers an error, the handling is as follows:

- In the case of errors regarding the name or address of the buyer but not the tax code, and no other content errors exist, the seller informs the buyer about the invoice error and does not need to reissue the invoice. The seller must notify the tax authority about the e-invoice error according to Form No. 04/SS-HDDT in Appendix IA issued with this Decree, except in cases where the e-invoice without a tax authority code has errors and no invoice data has been sent to the tax authority.

- In the case of errors such as tax code errors; errors in the amount recorded on the invoice, errors in tax rate, tax money, or the goods recorded on the invoice not being in the correct specifications or quality, the seller can choose one of the following two methods for using the e-invoice:

+ The seller issues an e-invoice to correct the error in the previously issued invoice. If the seller and the buyer agree to create a written agreement before issuing an adjustment invoice to the erroneous invoice, the seller and the buyer create a written agreement detailing the errors, after which the seller issues an e-adjustment invoice to the incorrect issued invoice.

The e-adjustment invoice must state "Adjustment for invoice Model No... symbol... number... date... month... year".

+ The seller issues a new e-invoice to replace the erroneous e-invoice except when the seller and the buyer agree to create a written agreement before issuing a substitute invoice for the erroneous invoice, the seller and the buyer create a written agreement specifying the errors, after which the seller issues a new e-invoice to replace the erroneous issued invoice.

The new e-invoice must state "Substitute for invoice Model No... symbol... number... date... month... year".

The seller digitally signs the new e-adjustment or substitute invoice for the erroneous issued e-invoice then the seller sends it to the buyer (for cases using unauthenticated e-invoices) or sends it to the tax authority for the tax authority to provide a code for the new e-invoice to send to the buyer (for cases using e-invoices with a tax authority code).

- In the aviation industry, the replacement or refund air transport document invoice is considered an adjustment invoice without needing the information "Increase/Decrease Adjustment for invoice Model No... symbol... date... month... year." Airlines are allowed to issue their own invoices for refund, replacement transport documents issued by agents.