What are cases where a foreign currency is used in an invoice in Vietnam? What are cases where a company conduct foreign currency transactions within Vietnam?

What are cases where a foreign currency is used in an invoice in Vietnam?

Pursuant to point c, clause 13, Article 10 of Decree 123/2020/ND-CP, regulated as follows:

Contents of the invoice

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13. Script, numbers, and currency shown on the invoice

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c) The currency recorded on the invoice is Vietnamese Dong, with the national symbol as "đ".

- In cases where financial or economic transactions arise in foreign currency under the provisions of foreign exchange laws, the unit price, amount, total value-added tax amount per tax rate, total value-added tax amount, total payment are recorded in the foreign currency, with the monetary unit named after the foreign currency. The seller simultaneously displays on the invoice the exchange rate of the foreign currency against Vietnamese Dong according to the exchange rate stipulated by the Tax Administration Law and its guiding documents.

- The international standard code for the foreign currency (e.g., 13,800.25 USD - Thirteen thousand eight hundred US dollars and twenty-five cents, e.g., 5,000.50 EUR - Five thousand euros and fifty cents).

- In case the sale of goods arises in foreign currency under the provisions of foreign exchange laws and taxes are paid in foreign currency, the total payment amount shown on the invoice in foreign currency does not need to be converted to Vietnamese Dong.

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Thus, a business is only permitted to issue invoices in foreign currency in cases where financial transactions arise in foreign currency as permitted by law (specifically in Article 4 of Circular 32/2013/TT-NHNN), but must show the exchange rate with Vietnamese Dong, with the national symbol as "đ" on the invoice.

If the sale of goods is conducted in foreign currency and taxes are paid in foreign currency, conversion is not required.

What are cases where a foreign currency is used in an invoice in Vietnam? (Image from the Internet)

What are cases where a company conduct foreign currency transactions within Vietnam?

According to clause 12, Article 4 of Circular 32/2013/TT-NHNN, the cases allowing foreign currency transactions within the territory of Vietnam are prescribed as follows:

Cases of using foreign exchange within the territory of Vietnam

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12. Resident entities that are export processing enterprises shall comply with the following regulations:

a) They are allowed to state prices in contracts in foreign currency and make payments by wire transfer in foreign currency when purchasing goods from the domestic market for production, processing, recycling, assembling export goods or for exportation, except goods prohibited from export. Domestic companies are allowed to quote prices, set prices in foreign currency, and receive payments by wire transfer in foreign currency when selling goods to export processing enterprises;

b) They are allowed to quote prices, set prices, state prices in contracts in foreign currency and make payments, receive payments by wire transfer in foreign currency with other export processing enterprises.

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Thus, a company selling goods to an export processing enterprise for production, processing, recycling, assembling export goods or for exportation is allowed to quote prices, set prices in foreign currency, and receive payments by wire transfer in foreign currency.

What are cases where tax be paid in convertible foreign currency in Vietnam?

According to clause 1, Article 4 of Circular 80/2021/TT-BTC, there are four cases where tax declaration and payment can be made in convertible foreign currency. Specifically:

- Activities involving the exploration, extraction, and exploitation of oil and gas (except crude oil, condensate, natural gas sold in the Vietnamese market or otherwise regulated by the Government of Vietnam) include:

+ Natural resource tax, corporate income tax;

+ Additional charges for the shared profit of oil when the crude oil price rises; profit oil, gas divided between host country partners;

+ Signature bonuses;

+ Commercial discovery bonuses for oil, gas;

+ Production bonuses;

+ Fees for reading and using oil and gas data; compensation fees for not fulfilling minimum commitments;

+ Corporate income tax on income from transferring rights to participate in oil and gas contracts;

+ Special taxes, surcharges, and corporate income tax from the leftover portion of oil activities of Vietsovpetro Joint Venture in Lot 09.1 are declared and paid into the state budget in liberated foreign currency used in payment transactions.

- Fees, charges, and other revenues collected by representative offices of the Socialist Republic of Vietnam abroad:

Declared and paid into the state budget in convertible foreign currency as prescribed in the fee, charge, and other revenue regulation documents.

- Fees, charges collected by authorized institutions and organizations within Vietnam in foreign currency:

Declared and paid into the state budget in convertible foreign currency as stipulated in the regulation documents on fee and charge levels.

- E-commerce business activities, digital platform-based businesses, and other services provided by foreign suppliers without a permanent establishment in Vietnam:

Declared and paid into the state budget in convertible foreign currency.