What is a VAT (red) invoice? When is the time to issue a VAT invoice in Vietnam?

What is a VAT (red) invoice in Vietnam?

A red invoice is the common term used to refer to a Value-Added Tax (VAT) invoice or VAT bill. It can be understood as a record issued by the Ministry of Finance or printed by enterprises themselves if they have registered the template with the Tax Authority.

According to Clause 1, Article 8 of Decree 123/2020/ND-CP, a VAT invoice is used by organizations declaring VAT by the deduction method for the following activities:

- Selling goods or providing services domestically;

- International transportation activities;

- Exporting to free trade zones and cases considered as exports;

- Exporting goods and providing services abroad.

What is a VAT (red) invoice? When is the time to issue a VAT invoice in Vietnam? (Image from the Internet)

When is the time to issue a VAT invoice in Vietnam?

Based on Article 9 of Decree 123/2020/ND-CP, the time to issue a VAT invoice is stipulated as follows:

- The time of issuing an invoice for selling goods (including selling state assets, confiscated assets, assets added to the state fund, and selling national reserve goods) is the time of transferring ownership or right of use of goods to the buyer, regardless of whether payment has been received or not.

- The time of issuing an invoice for providing services is the time of completing the provision of services, irrespective of whether payment has been received or not. In cases where the service provider collects payment before or during the provision of services, the time of issuing an invoice is the time of receiving payment (excluding cases of collecting deposits or advances to ensure the implementation of service contracts: accounting, auditing, financial consulting, tax consulting; valuation; survey, technical design; supervision consulting; preparing construction investment projects).

- In cases of multiple deliveries or handing over each item or stage of service, an invoice must be issued for each delivery or handover corresponding to the volume and value of goods or services delivered.

Additionally, the law also stipulates the time of issuing invoices in specific cases such as selling petroleum products at retail stores to customers, providing airline transportation services, insurance services through agents, etc.

What are regulations on the storage and preservation of invoices and records in Vietnam?

According to Article 6 of Decree 123/2020/ND-CP, the preservation and storage of invoices and records are regulated as follows:

Firstly, invoices and records must be preserved and stored, ensuring:

- Safety, security, integrity, and completeness, without alterations or discrepancies throughout the storage period;

- Storage in the right manner and for the adequate period as stipulated by the accounting laws.

Secondly, electronic invoices and records are stored using electronic means. Agencies, organizations, and individuals have the right to choose and apply the method of storage and preservation of electronic invoices and records suitable to their operational characteristics and technology application capability. Electronic invoices and records should be readily printable or retrievable upon request.

Thirdly, invoices printed by the tax authority, printed records, self-printed records must be stored and preserved in accordance with the following requirements:

- Unissued invoices and records should be stored and preserved in warehouses according to the policies for storing valuable records.

- Issued invoices and records in accounting units should be stored as per the regulations for storing and preserving accounting records.

- Issued invoices and records in organizations, households, or individuals that are not accounting units should be stored and preserved like the private assets of those organizations, households, or individuals.

What actions are prohibited in the field of invoices and records in Vietnam?

According to Article 5 of Decree 123/2020/ND-CP, the prohibited actions in the field of invoices and records are:

(i) For tax officials

- Causing trouble or difficulties for organizations or individuals purchasing invoices and records;

- Engaging in acts of covering up or colluding with organizations or individuals to use invoices and records unlawfully;

- Accepting bribes during inspection or investigation of invoices.

(ii) For organizations, individuals selling, providing goods, services, or those with related rights and obligations

- Performing fraudulent acts like using illegal invoices, using invoices illegally;

- Obstructing tax officials in exercising their public duties, specifically acts that harm the health or dignity of tax officials during inspection or investigation of invoices and records;

- Unlawfully accessing, altering, or destroying information systems related to invoices and records;

- Offering bribes or engaging in other acts related to invoices and records to gain illicit benefits.