What are the cases of suspension of use of electronic invoices in Vietnam?

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

1. Benefits of electronic invoices (e-invoice)

Currently, e-invoices are increasingly being widely used. The benefits that e-invoices bring are as follows:

- For businesses:

+ Cost reduction: e-invoices help businesses reduce costs compared to using paper invoices (reducing printing costs, ink costs, transportation costs, invoice storage costs, storage space, etc.).

+ Improved management efficiency: Easy retrieval and control of invoices, minimizing errors.
  
+ Enhanced brand reputation: Demonstrates the professionalism and modernity of the business.

+ Expanded business opportunities: Easy participation in e-commerce platforms, import-export activities.

- For consumers:

+ Easy invoice retrieval and control: Consumers can easily look up invoice information on the electronic portal of the General Department of Taxation.

+ Protection of rights: Limiting invoice forgery, ensuring consumer rights.

+ Environmental protection contribution: Reducing the use of paper documents.

2. What are the cases of suspension of use of e-invoices in Vietnam?

According to Clause 1, Article 16 of Decree 123/2020/ND-CP, enterprises, business entities, other organizations, household or individual businesses shall suspend their use of authenticated and unauthenticated e-invoices in the following cases:

- An enterprise, business entity, other organization, household business or individual business has its TIN invalidated;

- An enterprise, business entity, other organization, household business or individual business does not operate at the registered location as verified and announced by the tax authority;

- An enterprise, business entity, other organization, household business or individual business has sent a notification of business suspension to a competent authority;

- An enterprise, business entity, other organization, household business or individual business is banned from using e-invoices by the tax authority for the purpose of enforcement of payment of tax debts;

- E-invoices are used to sell smuggled goods, banned goods, counterfeits, goods violating intellectual property rights as detected and informed by competent authorities;

- E-invoices are used for short selling of goods or services for fraudulent purposes as detected and informed by competent authorities;

- A business registration authority or competent authority requests an enterprise to suspend operation in a conditional business line after finding that this enterprise does not fully satisfy the business conditions prescribed by law.

In addition, If the tax authority, through inspection, discovers that the enterprise is established for the purpose of trade and use of illegal e-invoices or illegal use of e-invoices for tax evasion purposes, the enterprise shall face administrative penalties and be suspended from use of e-invoices according to the decision issued by the tax authority.

3. What is the procedures for suspension of use of e-invoices in Vietnam?

According to Clause 2, Article 16 of Decree 123/2020/ND-CP, procedures for suspension of use of e-invoices are as follows:

- The supervisory tax authority shall send a notification requesting the taxpayer to provide explanation or additional documents about its use of e-invoices in the following cases:

+ E-invoices are used to sell smuggled goods, banned goods, counterfeits, goods violating intellectual property rights as detected and informed by competent authorities;

+ E-invoices are used for short selling of goods or services for fraudulent purposes as detected and informed by competent authorities;

+ A business registration authority or competent authority requests an enterprise to suspend operation in a conditional business line after finding that this enterprise does not fully satisfy the business conditions prescribed by law.

- The taxpayer must provide such explanation or additional documents within 02 working days from receipt of the notification from the tax authority. Such explanation or additional documents may be provided directly or in writing for the tax authority.

- The taxpayer shall continue using e-invoices or provide explanation. To be specific:

+ If the taxpayer provides adequate and convincing explanation or additional documents as prescribed, it shall continue using e-invoices.

+ If the explanation or additional documents provided by the taxpayer is/are not convincing, the tax authority shall continue requesting the taxpayer to provide additional documents. Additional documents must be submitted within 02 working days from receipt of the tax authority’s request.

+ If the taxpayer fails to provide explanation or additional documents within the requested period, the tax authority shall request the taxpayer to suspend its use of authenticated e-invoices or unauthenticated e-invoices, and take further actions as prescribed.

Best regards!

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