Vietnam: Are household businesses allowed to issue VAT invoices? Can household businesses purchase tax authority-ordered printed invoices?
Can household businesses in Vietnam issue VAT invoices?
Pursuant to Clause 1, Article 8 of Decree 123/2020/ND-CP as follows:
Invoice types
Invoices prescribed herein are classified into the following types:
1. Value-added tax (VAT) invoice is an invoice that may be used by organizations making VAT declaration by employing the credit-invoice method for the following activities:
a) Domestic sale of goods or provision of services;
b) Provision of international transport services;
c) Export of goods to free trade zones and other cases considered as export of goods;
d) Export of goods or provision of services in a foreign market.
Accordingly, a VAT invoice is an invoice which may be used by organizations making VAT declaration by employing the credit-invoice method for activities according to the above provisions.
On the other hand, according to the provisions of Clause 2, Article 10 of the Law on Value Added Tax 2008 (amended and supplemented by Clause 4, Article 1 of the Law on amendments to Law on VAT in 2013) as follows:
Article 10. Tax deduction method
...
2. The deduction method is applicable to the business establishments that comply with the regime for accounting and invoicing according to the laws on accounting and invoicing, including:
a) Business establishments that earn annual revenue of at least 1 billion VND from goods sale, except for household and individual businesses;
b) Business establishments that voluntarily employ the deduction method, except for household and individual businesses.
According to the above provisions, household businesses are not subject to the VAT deduction method and are not allowed to issue VAT invoices.
Thus, household businesses wishing to issue VAT invoices must convert the type to enterprises.
.png)
What is the way to issue VAT invoices for household businesses in Vietnam?
Pursuant to Article 23 of Decree 123/2020/ND-CP stipulating as follows:
Use of tax authority-ordered printed invoices
Departments of Taxation in provinces and centrally-affiliated cities (hereinafter referred to as “provincial Departments of Taxation”) may order the printing of invoices resold to the following entities:
1. Enterprises, business entities, and household or individual businesses mentioned in Clause 1 Article 14 hereof if they do not have electronic transactions with tax authorities, IT infrastructure, accounting software systems or e-invoicing software functioning as the tools of using e-invoices and transmitting e-invoice data to purchaseers and tax authorities.
Enterprises, business entities, and household or individual businesses may purchase invoices from tax authorities for a period of up to 12 months while tax authorities must have solutions for gradually converting to the use of e-invoices. Before using e-invoices, business entities, and household or individual businesses must apply for use of authenticated or unauthenticated e-invoices (if eligible) in accordance with the provisions in Article 15 hereof.
2. Enterprises, business entities, and household or individual businesses during the period of failure of the tax authority’s authentication code issuing system as prescribed in Clause 2 Article 20 hereof.
Accordingly, household businesses in Vietnam may order tax authority-ordered printed invoices.
Thus, household businesses in Vietnam are not allowed to purchase invoices from tax authorities instead of issuing VAT invoices.
Therefore, household businesses in Vietnam can use tax authority-ordered printed invoices to declare VAT.
What are the procedures for purchasing tax authority-ordered printed invoices for household businesses in Vietnam?
Pursuant to the provisions of Clause 1 Article 24 of Decree 123/2020/ND-CP as follows:
Selling tax authority-ordered printed invoices
1. An enterprise, business entity, or household or individual business that is eligible to purchase invoices from the tax authority (hereinafter referred to as “purchaser”) shall submit an application for invoice purchase (using Form No. 02/DN-HDG in Appendix IA enclosed herewith), accompanied by the following documents, to the tax authority:
a) The purchaser (the applicant or person authorized in writing by the enterprise, business entity, or household or individual business as prescribed by law) shall present his/her unexpired ID card or citizen’s identity card;
b) The purchaser that purchases invoices for the first time shall provide a commitment (using Form No. 02/CK-HDG in Appendix IA enclosed herewith) on its business location which must be the same as that specified in the certificate of enterprise registration, certificate of branch registration, certificate of household business registration, taxpayer registration certificate, TIN notification, investment registration certificate, certificate of cooperative registration or establishment decision issued by a competent authority;
c) The purchaser shall take responsibility to write or stamp name, address, and TIN on copy 2 of every purchased invoice before taking them from the tax authority’s premises.
Thus, a household business wishing to purchase tax authority-ordered printed invoices must submit the application form for purchasing invoices to the tax authority when purchasing invoices and accompanied by the following documents:
- The purchaser or authorized person shall present his/her unexpired ID card or citizen’s identity card;
- Have a written commitment on its business locations which must be the same as that specified in the certificate of enterprise registration, certificate of branch registration, certificate of household business registration, taxpayer registration certificate, TIN notification, investment registration certificate, certificate of cooperative registration or establishment decision issued by a competent authority.
LawNet
.png)