Vietnam: What is the VAT rate applicable to service provision invoices issued after December 31, 2022?
What is the VAT rate applicable to service provision invoices issued after December 31, 2022 in Vietnam?
Pursuant to Article 1 and Article 3 of Decree 15/2022/ND-CP on the VAT reduction and application period as follows:
VAT reduction
1. VAT on goods and services currently subject to 10% VAT shall be reduced, except the following goods and services:
a) Telecommunication, financial activities, banking activities, securities, insurance, trading of real estate, metal and precast metal products, mining products (excluding coal mining), coke mining, refined oil, chemical products. Further details are provided in Appendix I enclosed herewith.
b) Goods and services subject to excise tax. Further details are provided in Appendix II enclosed herewith.
c) Information technology as prescribed in the Law on information technology. Further details are provided in Appendix III enclosed herewith.
d) Reduction of VAT for each type of goods and services specified in Clause 1 of this Article shall be applied consistently in all stages, including import, production, processing and trading. Coal mined for sale (including coal mined and then washed, sieved and classified under a closed process) shall be eligible for VAT reduction. VAT on coal products in Appendix I enclosed herewith in stages other than the stage of mining and sale shall not be reduced.
In case goods and services in Appendixes I, II and III enclosed herewith are not subject to VAT or are subject to 5% VAT in accordance with the Law on value-added tax, regulations of the Law on value-added tax shall prevail and VAT on such goods and services shall not be reduced.
2. VAT reduction rates
a) Business establishments that pay VAT using the credit-invoice method shall pay 8% VAT on the goods and services specified in Clause 1 of this Article.
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Effect and implementation
1. This Decree comes into force from February 01, 2022.
The provisions in Article 1 of this Decree shall take effect from February 01, 2022 to December 31, 2022 inclusively.
The provisions in Article 2 of this Decree shall apply from the tax period of 2022.
Thus, the VAT rate of 10% is applicable to service provision invoices issued after December 31, 2022.
Specifically, in Official Dispacth 9301/CTHN-TTHT in 2023 on the same content, in case the enterprise completes the service provision or issues service provision invoices after December 31, 2022, it is not in the case of VAT reduction under Decree 15/2022/ND-CP.
In Vietnam, is it required to issue a new invoice in case the the buyer’s name or address on the issued invoice is wrong?
Pursuant to Article 19 of Decree 123/2020/ND-CP as follows:
Handling of erroneous invoices
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2. If an authenticated or unauthenticated e-invoice which has been sent to the buyer is detected by either the buyer or seller to contain errors, it shall be handled as follows:
a) If the buyer’s name or address is wrong but the TIN and other information are correct, the seller shall inform the buyer of the errors and is not required to re-issue the invoice. The seller shall inform the tax authority of the erroneous e-invoice by using Form No. 04/SS-HDDT provided in Appendix IA enclosed herewith, unless data about the erroneous unauthenticated e-invoice is not yet sent to the tax authority.
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Thus, in case the buyer’s name or address in the issued invoice is wrong or an unauthenticated e-invoice which has been sent to the buyer is detected by either the buyer or seller to contain errors, but theTIN and other information are correct, the seller shall inform the buyer of the errors and is not required to re-issue the invoice.
How to issue a VAT invoice for returned goods in Vietnam?
Pursuant to Article 4 of Decree 123/2020/ND-CP, the VAT rate for returned goods written on the e-invoice will be the corresponding VAT rate of such goods. To be specific:
Rules for issuance, management and use of invoices and records
1. When selling goods or providing services, the seller shall issue and send invoices to buyers (including goods/services used for sales promotion, advertising or as samples, goods/services gifted, donated, exchanged or used as salary payment to employees and internal use (except goods which are internally rotated in production process), and goods rented, lent or returned). Such invoices shall have adequate contents written according to the provisions in Article 10 hereof, except e-invoices which must follow the standard format prescribed by tax authorities as prescribed in Article 12 hereof.
In addition, the Hanoi Tax Department has instructions to refer to the same content in Official Dispatch 9301/CTHN-TTHT in 2023 as follows:
In case the enterprise that is an organization that pays VAT according to the deduction method arises the return of goods in accordance with the provisions of law when returning goods, the taxpayer shall make VAT invoices as prescribed in Article 4 of Decree 123/2020/ND-CP, the VAT rate for returned goods corresponds to the VAT rate for such goods stated on VAT invoices.
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