What is the right time to issue an invoice in Vietnam? What are the penalties for the act of issuing invoices at the wrong time?
Is the seller required to issue invoices and send them to the buyer in all cases?
According to the provisions of Article 4 of Decree 123/2020/ND-CP, the rules for issuance, management and use of invoices and records when selling goods or providing services are as follows:
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.
Thus, normally 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, and goods rented, lent or returned.
However, for goods which are internally rotated in the production process, there is no need to issue an invoice.
What is the right time to issue an invoice in Vietnam? What are the penalties for the act of issuing invoices at the wrong time?
What is the right time to issue an invoice in Vietnam?
Pursuant to Clause 1, Article 9 of Decree 123/2020/ND-CP stipulating the invoicing time in Vietnam when selling goods or providing services as follows:
Invoicing time in Vietnam
1. Invoices for sale of goods (including the sale of state-owned property, property confiscated and put into state fund, and the sale of national reserve goods) shall be issued when the right to own or use goods is transferred to buys, whether the payment of the invoiced amount is made or not.
2. Invoices for provision of services shall be issued upon 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).
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According to the above provisions, invoices for sale of goods shall be issued when the right to own or use goods is transferred to buys, whether the payment of the invoiced amount is made or not.
Invoices for provision of services shall be issued upon completion of the provision of services, whether the payment of the invoiced amount is made or not. However, 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
Specifically, in Official Dispatch 9297/CTHN-TTHT in 2023, the Hanoi Tax Department provides similar guidance on the invoicing time when selling goods and providing services to Willer Vietnam Co., Ltd. as follows:
- Pursuant to the provisions of Clause 1, Article 4 of Decree 123/2020/ND-CP and Article 9 of Decree 123/2020/ND-CP, invoices for provision of services shall be issued upon 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 advance or during the provision of that service, an invoice shall be issued when each payment is collected as prescribed in Clause 2, Article 9 of Decree 123/2020/ND-CP.
- In case of issuing invoices when selling goods and services at the wrong time as prescribed by law, penalties for violations of regulations on invoicing when selling goods and services will be imposed.
What are the penalties for administrative violations for the act of issuing invoices at the wrong time in Vietnam?
Pursuant to Article 24 of Decree 125/2020/ND-CP (added by Clause 3, Article 1 of Decree 102/2021/ND-CP) stipulating penalties for violations against regulations on issuance of invoices upon sale of goods or provision of services specifically 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;
b) Issuing a continuous series of invoices in ascending numerical order by exercising disagreeing invoicing authorizations (i.e. exercising authorizations to issue greater numbered invoices and not exercising authorizations to issue less numbered invoices) although entities or individuals have managed to cancel invoice books containing less numbered invoices after discovery of such situation;
c) Issuing wrong types of invoice that have already handed to buyers or been used for completion of tax declaration procedures although sellers and buyers have discovered the issuance of the wrong types of invoice and replaced them with the correct ones before competent authority’s issuance of their decisions to conduct tax inspection and examination at the defaulting taxpayer’s offices or premises, and this situation does not affect the determination of tax obligations.
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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;
b) Issuing invoices without conforming to the statutory ascending numerical sequence, except when the penalty in the form of caution prescribed in point b of clause 1 of this Article is imposed;
c) Issuing invoices with the invoicing dates coming ahead of the dates of purchase of invoices from tax authorities;
d) Issuing invoices not conforming to classifications prescribed in laws on invoices for sale of goods and provision of services if these invoices have already been handed to buyers or used for the completion of tax declaration procedures, except in the case of imposition of the penalty in the form of caution as provided in point c of clause 1 of this Article;
dd) Issuing e-invoices when having not yet receiving notices of consent from tax authorities or before the dates of consent to using e-invoices with/without tax authority’s codes from supervisory tax authorities;
e) Issuing invoices for sale of goods and provision of services during the period of temporary business closure, except when issuing invoices to clients for the purpose of implementing contracts signed before the date of notification of such temporary business closure;
g) Issuing e-invoices by using cash registers without network connection or transfer of electronic data to tax authorities.
h) Issuing invoices which do not contain all compulsory contents as prescribed.
Thus, when violating regulations on issuing invoices at the wrong time, warning shall be imposed if it does not lead to the extent of causing any deferred fulfillment of tax obligations, under any mitigating circumstance.
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 and without mitigating circumstances.
If the invoice is not issued at the right time and is not subject to a warning or a fine of between VND 3,000,000 to VND 5,000,000 above, a fine of between VND 4,000,000 between VND 8,000,000 shall be imposed.
The above-mentioned fine level applies only to individuals, in case organizations commit violations, the fine level is double that of individuals (according to Point a, Clause 4, Article 7 of Decree 125/2020/ND-CP and Clause 5, Article 5 of Decree 125/2020/ND-CP).
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