Vietnam: Handling of e-invoices with errors detected by the buyer

Regarding this matter, LawNet would like to answer as follows:

1. What is an electronic invoice (e-invoice)?

E-invoices are defined according to the provisions of Clauses 1 and 2, Article 3 of Decree 123/2020/ND-CP as follows:

- “invoice” means an accounting record which is created by a goods seller or service provider to record information about the sale of goods or service provision. Invoices are represented in the electronic form or are printed according to orders placed by tax authorities.

- “e-invoice” means an invoice, with or without the tax authority’s authentication code, in the form of electronic data, issued by the goods seller or service provider by using electronic instruments to record information on the sale of goods or service provision in accordance with regulations of the Law on accounting and the Law on taxation, including the invoices generated by POS cash registers that are digitally connected to tax authorities. To be specific:

+ “authenticated e-invoice” means an e-invoice that is granted an authentication code by the tax authority before it is sent to the buyer by the goods seller or service provider.

The authentication code on an e-invoice is a unique serial number generated by the tax authority’s system and a series of characters encoded by the tax authority based on the information specified by the seller on the invoice.

+ “unauthenticated e-invoice” means an e-invoice that is sent to the buyer by the goods seller or service provider without the tax authority’s authentication code.

2. Regulations on handling of e-invoices with errors detected by the buyer in Vietnam

Pursuant to Clause 2, Article 19 of Decree 123/2020/ND-CP, if an authenticated or unauthenticated e-invoice which has been sent to the buyer is detected by the buyer to contain errors, it shall be handled as follows:

- If the information about TIN, amount, tax rate, tax amount or goods on the invoice is wrong, the error shall be handled by adopting one of the following methods:

+ The seller shall create an e-invoice to correct the erroneous one. The seller and the buyer shall prepare a document specifying the errors as agreed upon between them before the seller issues a correction e-invoice.

The correction e-invoice shall bear the text “Điều chỉnh cho hóa đơn Mẫu số... ký hiệu... số... ngày... tháng... năm” (“This invoice corrects the invoice form No……….., reference No………, No………dated……….”).

+ The seller issues a new e-invoice to replace the erroneous one. The seller and the buyer shall prepare a document specifying the errors as agreed upon between them before the seller issues a new e-invoice to replace the erroneous one.

The replacing invoice shall bear the text “Thay thế cho hóa đơn Mẫu số... ký hiệu... số... ngày... tháng... năm” (“This invoice replaces the invoice form No……….., reference No………, No………dated……….”).

The seller shall add the digital signature on the e-invoice which is issued to correct or replace the erroneous one, then send it to the buyer (in case of unauthenticated invoices) or send it to the tax authority for its issue of a new authentication code (in case of authenticated invoices).

3. Supplementation to the tax declaration dossier in Vietnam

Pursuant to Clause 1 and Clause 4, Article 47 of the Law on Tax Administration 2019, in case the tax declaration dossier submitted to the tax authority is erroneous or inadequate, supplementary documents may be provided within 10 years from the deadline for submission of the erroneous or inadequate tax declaration dossier but before the tax authority or a competent authority announces a decision on tax document examination.

Supplementary documents include:

- The supplementary tax return;

- The explanation for the supplementation and relevant documents.

According to the provisions of Clause 4, Article 7, Decree 126/2020/ND-CP on tax declaration documents as follows:

- The taxpayer may submit supplementary documents if the tax declaration dossier is found erroneous as prescribed in Article 47 of the Law on Tax Administration 2019 using the set form provided by the Minister of Finance. To be specific:

+ If the supplementation does not lead to a change in tax obligations, only a written explanation and relevant declaration is required while a supplementary tax return is not required.

+ If the annual tax finalization dossier has not been submitted, the taxpayer shall provide supplementary tax documents of the erroneous month or quarter and include the rectification in the annual tax finalization dossier.

+ If the annual tax finalization dossier has been submitted, only supplementation to the annual tax finalization dossier is required. In case of supplementation of the income payer’s terminal personal income tax return, the erroneous monthly or quarterly tax return shall also be supplemented.

- If the supplementation leads to an increase in the amount of tax payable or decrease in the amount of refundable tax, the arrears or excessively refunded tax plus late payment interest (if any) shall be paid to state budget.

+ If the supplementation only increases or decreases the deductible VAT which will be carried forward, it must be included in the current tax period. The taxpayer may only increase the refundable VAT if the tax declaration dossier of the next period and the application for tax refund is not submitted.

Thus, the company shall handle e-invoices with errors when discovered by buyers as follows:

- Regarding invoices: The company that issues e-invoices to correct/replace invoices that have been issued with errors, the e-invoice that correct/replaces e-invoices that have been issued with errors must have the words “Điều chỉnh/Thay thế cho hóa đơn Mẫu số... ký hiệu... số... ngày... tháng... năm” (“This invoice corrects/replaces the invoice form No……….., reference No………, No………dated……….”)

- Regarding supplementation to the tax declaration dossier: After issuing an electronic invoice to correct/replace the invoice that was issued with errors, the Company shall supplement the tax declaration dossier for the tax period with corresponding errors. In cases where the supplementary declaration results in an increase in the amount of tax payable or a decrease in the amount of tax already refunded by the state budget, the taxpayer must fully pay the additional amount of tax payable or the excess amount of tax refunded, along with any late payment penalties (if applicable), into the state budget. In cases where the supplementary declaration only increases or decreases the amount of value-added tax (VAT) that can be carried forward to subsequent periods, it must be declared in the current tax period. The company shall comply with Article 1, Article 4 of the Law on Tax Administration 2019 and Article 4 of Decree 126/2020/ND-CP to make supplementary declarations for tax returns that contain errors or omissions in accordance with the provisions of the law.

Best regards!

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