When shall authenticated e-invoices be used without service charges for 12 months in Vietnam?

When shall authenticated e-invoices be used without service charges for 12 months in Vietnam?

Based on Article 14 of Decree 123/2020/ND-CP, the regulations are as follows:

Provision of e-invoicing services

1. The circumstances where authenticated e-invoices can be used without service charges for a period of 12 months from the commencement of using e-invoices include:

a) Small and medium-sized enterprises, cooperatives, households, and individual businesses located in areas with difficult socio-economic conditions, or areas with exceptionally difficult socio-economic conditions. These areas are specified in the List of investment incentive areas issued along with Decree No. 118/2015/ND-CP of November 12, 2015, by the Government of Vietnam, detailing and guiding the implementation of several provisions of the Investment Law and its amended, supplemented, or replaced documents if any.

b) Other small and medium-sized enterprises as proposed by the People's Committees of provinces and centrally-affiliated cities, submitted to the Ministry of Finance, except those operating in economic zones, industrial zones, and high-tech zones.

The General Department of Taxation shall execute or authorize an organization providing e-invoicing services to supply authenticated e-invoices without service charges to the aforementioned subjects.

2. Enterprises, economic organizations, households, and individual businesses not falling under Clause 1 of this Article, when using authenticated e-invoices, or using e-invoices without codes through an e-invoicing service provider, must pay service charges as per the contract signed between the parties.

According to the above regulation, the following enterprises and organizations will be allowed to use authenticated e-invoices without having to pay for 12 months from the start of using e-invoices:

- Small and medium-sized enterprises, cooperatives, households, and individual businesses located in areas with difficult socio-economic conditions, or areas with exceptionally difficult socio-economic conditions.

- Other small and medium-sized enterprises as recommended by the People's Committees of provinces and centrally-affiliated cities to the Ministry of Finance, except those operating in economic zones, industrial zones, or high-tech zones.

Note: The above-mentioned exemption from paying for authenticated e-invoices applies only for 12 months from when the e-invoices commence.

When shall authenticated e-invoices be used without service charges for 12 months in Vietnam? (Image from Internet)

Under what circumstances must the use of authenticated e-invoices be discontinued?

Based on Clause 1, Article 16 of Decree 123/2020/ND-CP, the cases for discontinuing the use of authenticated e-invoices are as follows:

- Enterprises, economic organizations, other organizations, households, and individual businesses that terminate the validity of their tax identification numbers;

- Enterprises, economic organizations, other organizations, households, and individual businesses in cases where the tax authority verifies and announces they are not operating at the registered address;

- Enterprises, economic organizations, other organizations, households, and individual businesses that notify the competent state authority of a temporary business suspension;

- Enterprises, economic organizations, other organizations, households, and individual businesses that receive a notice from the tax authority to discontinue the use of e-invoices for tax debt enforcement;

- Cases involving the use of e-invoices for selling contraband, banned goods, counterfeit goods, or goods infringing intellectual property rights, detected and reported by competent authorities to the tax authority;

- Cases involving the creation of e-invoices for the purpose of fictitiously selling goods or providing services to embezzle money from organizations or individuals, detected and reported by competent authorities to the tax authority;

- Cases where the business registration agency or competent state authority requires enterprises to temporarily suspend business operations in conditional business lines upon finding non-compliance with business conditions as prescribed by law.

Based on the results of inspections and investigations, if the tax authority determines that an enterprise was established to illegally purchase, sell, or use e-invoices, or illegally use e-invoices to evade taxes, the tax authority will issue a decision to discontinue the use of e-invoices; the enterprise will be penalized according to legal regulations.

What is the procedure for suspension of use of e-invoices in Vietnam?

Based on Clause 2, Article 16 of Decree 123/2020/ND-CP, the procedure for suspension of use of e-invoices is as follows:

- The direct tax authority sends a notice to taxpayers falling under points d, e, g of Clause 1 of this Article, requesting an explanation or supplementation of information and documents related to the use of e-invoices.

- Taxpayers must provide explanations or supplement information and documents within no more than 02 working days from the date the tax authority issues the notice. Taxpayers may directly visit the tax authority for explanations or provide additional information and documents either in person or by writing.

- Taxpayers may continue using e-invoices or supplement the explanations specifically:

+ If taxpayers fully explain or supplement required information and documents, and can verify compliance with legal regulations on using e-invoices, they may continue using e-invoices.

+ If taxpayers have explained or supplemented information and documents but cannot verify compliance with legal regulations on using e-invoices, the tax authority will continue notifying and requesting taxpayers to supplement information and documents. The deadline for supplementation is 02 working days from the date the tax authority issues the notice.

- If the deadline according to the notice expires and the taxpayer fails to explain or supplement information and documents, the tax authority will issue a notice requesting the taxpayer to discontinue the use of e-invoices with codes or without codes from the tax authority and will take measures according to regulations.