What is issuing invoices at the wrong time? What issues should be noted when issuing invoices at the wrong time in Vietnam?
What is issuing invoices at the wrong time in Vietnam?
Issuing invoices at the wrong time is also understood as the act of making invoices at the wrong time as prescribed in Article 9 of Decree 123/2020/ND-CP. Specifically:
No | Act | Invoicing time |
1 | Sale of goods | When the right to own or use goods is transferred to buys, whether the payment of the invoiced amount is made or not |
2 | Provision of services | - completion of the provision of services, whether the payment of the invoiced amount is made or not. - In case a service is provided with payments collected in advanced or during the provision of that service, an invoice shall be issued when each payment is collected (excluding payments of deposited amounts or advance payments which are made to ensure the execution of contracts for provision of accounting, audit, financial consulting or taxation services; valuation services; technical survey and design services; supervision consulting services; investment construction project formulation services). |
3 | Multiple deliveries are required, or each goods item or service phase is accepted | To issue an invoice showing quantity, value of goods or service for each respective delivery or acceptance |
4 | In cases where a service is provided regularly and in large quantities, and needs time for checking and verifying figures between the service provider and its clients/partners such as: + air transport support services; + supply of aviation fuel to airlines; + supply of electricity (except the case prescribed in Point h of this Clause), supply of water; + television services; + postal and delivery services (including agency services, cash collection and payment services); + telecommunications services (including value-added telecommunications services); + logistics services; + IT services (except the case prescribed in Point b of this Clause) | Invoices shall be issued upon completion of figures checking and verification between the parties but no later than the 07th of the month following the month in which the service is provided or within 07 days after the end of a cycle |
5 | With regard to telecommunications services (including value-added telecommunications services) and IT services (including intermediary payment services provided on telecommunications or IT platforms) of which the payments require checking and verification of data connections between the service providers | invoices shall be issued upon completion of service charge data under economic contracts signed between service providers but within 2 months following the month in which connection service charges arise |
6 | In case telecommunications services (including value-added telecommunications services) are provided by selling prepaid cards or collecting interconnection charges when clients register for use of services without requesting the issue of VAT invoices or providing name, address and TIN | at the end of each day or on the periodical basis of each month, the service provider shall issue a VAT invoice recording total revenue from each service provided to the buyer for which the buyer does not request invoice or does not provide name, address and TIN |
7 | Construction and installation | At the time of commissioning and acceptance of the finished work, work item or construction/installation amounts, whether the payment of the invoiced amount is made or not |
8 | For organizations trading real estate or building infrastructure facilities and houses for sale or transfer in case the ownership or use right is not yet transferred: | An invoice shall be issued every time an installment is made in accordance with the agreement or contract |
For organizations trading real estate or building infrastructure facilities and houses for sale or transfer in case the ownership or use right has been transferred: | When the right to own or use goods is transferred to buys, whether the payment of the invoiced amount is made or not | |
9 | Air tickets issued via websites or e-commerce systems | According to international practices shall be issued within 05 days from the day on which the ticket is issued on the website or e-commerce system |
10 | For exploration, extraction and processing of crude oil | When the official selling price is determined agreed upon between the buyer and the seller, whether the payment of invoiced amounts is made or not |
11 | For the sale of natural gas, associated gas or coal gas which is transported through the pipelines to buyers | When the buyer and the seller agrees upon the quantity of gas delivered every month but within 07 days after the seller notifies in writing the quantity of gas delivered in the month |
12 | For retailers, and foods and drinks trading establishments that sell foods and drinks directly to consumers through their stores but all business operations are recorded at their head offices (the head office directly enters into contracts for sale of goods/provision of services; each store shall issue sales invoices to clients through its POS cash register in the name of the head office), POS cash registers are connected to computers but incapable of transmitting data to tax authorities, bills are printed out and presented to clients who do not request for e-invoices and data thereof is stored on the system | at the end of a business day, the business establishment shall, based on bill data, issue e-invoices for goods or foods and drinks sold during the day, and send them to clients if requested |
13 | For the sale of electricity by electricity generators | According to the time of checking and verifying payment amounts between the electricity grid and market operator, electricity generator and buyer as prescribed by the Ministry of Industry and Trade or the power purchase agreement which has been instructed and approved by the Ministry of Industry and Trade but by the deadline for submission of tax declaration dossier for the month in which tax is incurred in accordance with regulations of the law on taxation |
14 | Retailing of oil and gas | Upon completion of each sale |
15 | Provision of air transport services or insurance services through agents | Upon completion of data checking and verification between the parties but by the 10th of the month following the month in which the service is provided |
16 | Provision of banking, securities, insurance or e-wallet money transfer services, electricity supply suspension and resumption services rendered by electricity distributors to non-business individuals (or business individuals) that do not request for invoices | At the end of each day or each month, the service provider shall issue a consolidated invoice based on details on each transaction conducted in the day or month at its data management system |
17 | Provision of passenger transport services by taxis equipped with using taxi fare calculation software | At the end of the trip |
18 | Health facilities that use software for managing medical examination and treatment, and hospital fees, if physical receipt (hospital fee receipt or medical service charge receipt) is printed out upon each provision of medical service or x-ray or testing services, and stored on the IT system, and the client (i.e. patient) does not request for invoices | At the end of each day, the health facility shall, based on information on medical services provided and contained in physical receipts, compile e-invoices for medical services provided in the day, and send e-invoices to clients at their request |
19 | Non-stop electronic toll collection (ETC) | On the day on which the vehicle charged runs through the tollbooth. If a client using the ETC service owns two or more vehicles using the service multiple times in a month, the ETC service provider may issue e-invoices to that client periodically but by the last day of the month in which the ETC service is provided. |
Accordingly, the case of failure to issue invoices at the time specified above is considered an act of issuing invoices at the wrong time.
What is issuing invoices at the wrong time? What issues should be noted when issuing invoices at the wrong time in Vietnam?
How to handle issuing invoices at the wrong time in Vietnam?
Pursuant to Clause 8, Article 14 of Circular 219/2013/TT-BTC stipulating that if the taxpayer finds that the input VAT is incorrectly declared, an adjustment may be made before the tax authority or a competent authority announces the decision on tax inspection at the taxpayer’s premises.
However, for the seller, the invoice is processed at the wrong time as follows:
- The seller and the buyer make a written agreement specifying the error or informing about the error of the invoice (if the error is the responsibility of the seller).
- The seller issues an electronic invoice to adjust the issued invoice.
On the adjusted invoice, clearly write the content "Adjustment of invoice date, month and year number ... day ... month ... year ... from day month year to day month year" as the form below:
- Send adjusted invoice to buyer
- The seller and the buyer save the adjustment minutes for later explanation.
Are invoices issued at the wrong time included in the deducted expenses in Vietnam?
Pursuant to Article 6 of Circular 78/2014/TT-BTC (amended by Article 4 of Circular 96/2015/TT-BTC) stipulates that the deductible and non-deductible expenses when calculating taxable income as follows:
Deductible and non-deductible expenses when calculating taxable income
1. Except for the non-deductible expenses prescribed in Clause 2 of this Article, every expense is deductible if all of these following conditions are satisfied:
a) The actual expense incurred is related to the enterprise’s business operation.
b) There are sufficient and valid invoices and proof for the expense under the regulations of the law.
c) There is proof of cashless payment for each invoice for purchase of goods/ services of VND 20 million or over (including VAT).
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Besides, in Official Dispatch 2731/TCT-CS in 2016, the General Department of Taxation of Vietnamhas guided similar cases as follows:
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Pursuant to the above guidance, the case where KMW Vietnam Co., Ltd. purchased main materials from a supplier in January 2016 to serve production and business, but the supplier did not issue an invoice when delivering the raw materials in January 2016 but set of invoices in February 2016. If the company has documents and documents: quotation, economic contract and handover minutes in January 2016, it is recommended that the Tax Department of Ha Nam province check the reality of the Company's purchase and sale of goods to have the opportunity to The base guides the Company to calculate the deductible expenses when determining the taxable income for CIT for the above invoice number if it meets the prescribed conditions and coordinates with the tax authority to manage the supplier to impose penalties. administrative violations for the act of making invoices at the wrong time.
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Thus, in case the invoice is issued at the wrong time, then:
- The buyer: is included in the expenses when calculating CIT and declaring and deducting input VAT, provided that the purchase and sale is true; have invoices and payment vouchers in full; The seller has fully declared and paid tax.
- The seller: Will be sanctioned for the act of making invoices at the wrong time, depending on each case, the penalty will be different.
What are the penalties for the act of issuing invoices at the wrong time in Vietnam?
Pursuant to Article 24 of Decree 125/2020/ND-CP stipulates as follows:
Penalties for violations against regulations on issuance of invoices upon sale of goods or provision of services
1. Cautions shall be given as a form of penalty imposed for the following violations:
a) Issuing invoices at the wrong time, but not to the extent of causing any deferred fulfillment of tax obligations, under any mitigating circumstance;
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3. Fines ranging from VND 3,000,000 to VND 5,000,000 shall be imposed for any act of issuing invoices at the wrong time, but not to the extent of causing any deferred payment of tax obligations, except as prescribed in point a of clause 1 of this Article.
4. Fines ranging from VND 4,000,000 to VND 8,000,000 shall be imposed for one of the following violations:
a) Issuing invoices at the wrong time in breach of laws on invoices for sale of goods or provision of services, except as provided in point a of clause 1 and 3 of this Article;
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Accordingly, depending on the severity of the violation, businesses that issue invoices at the wrong time will be penalized as follows:
No | Act | Fine |
1 | Invoicing at the wrong time but does not lead to late performance of tax obligations and there are extenuating circumstances | Warning |
2 | Invoicing at the wrong time but does not lead to late payment of tax obligations | Fine from 03 - 05 million VND |
3 | Invoicing at the wrong time (except for the above 2 cases) | Fine from 04 - 08 million VND |
Note: the above fine level applies to organizations, in case of individual violations, the fine level is 1/2 of the organization.
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