What are instructions for processing input invoices of enterprises that have shut down in Vietnam?

What are input invoices of enterprises in Vietnam?

Currently, there is no document that specifically defines an enterprise's input invoice. However, an enterprise's input invoice is understood as the papers and documents used to prove the purchase of goods and services from the enterprise during its operations.

An enterprise's input invoice is a document that records the time and transaction activities of the seller and buyer.

What are instructions for processing input invoices of enterprises that have shut down in Vietnam? (Image from the Internet)

What are instructions for processing input invoices of enterprises that have shut down in Vietnam?

Pursuant to Official Dispatch 11797/BTC-TCT of 2014 guiding input invoices of enterprises that have shut down, they will be handled as follows:

In case the enterprise has not declared value added tax deduction

- the tax authority shall send a written notification to the enterprise in order for the enterprise to suspend deduction of VAT on invoices suspected of violations of law and wait for official results from competent authorities. 

- The enterprise may only deduct input VAT on the invoices that are not suspected for violations of law.

In case the enterprise has declared value added tax deduction

- The tax authority shall send a written notification to the enterprise in order for the enterprise to reduce the deducted VAT. 

- If the enterprise asserts that the purchase of goods and the input VAT invoices used for deduction are conformable, the enterprise shall make a declaration that it is legally responsible for.

- Tax authority shall carry out an inspection at the enterprise in order to reach a verdict and handle violations as per regulations.

- During the inspection, verification and comparison shall be carried out with enterprises having buyer-seller relationships regarding some issues:

+ Inspection and verification of goods: Sale invoices (if any); delivery method; delivery location; means of transport; costs of transport; owners of goods and origins of goods (before delivery)

+ Inspection and verification of payment: transaction banks; account depositors; number of transactions; method of payment; payment receipts.

+ Inspection and verification of export: Customs declarations bearing the customs' confirmation of export; bank transfer confirmations; bills of lading (if any).

- Through inspection and verification, if it is determined that the goods are real and conformable with law, the enterprise will be permitted to deduct VAT and claims VAT refund;

- At the same time, the enterprise shall also make a declaration that it will be legally responsible if violations are later found in the documents presented to the tax authority.

- In case of criminal tax offences are suspected, the case shall be transferred to a competent authority for criminal prosecution.

Is it possible to issue output invoices for the sale of goods without input invoices in Vietnam?

Pursuant to Article 9 of Decree 123/2020/ND-CP regulating invoices and documents issued on the time of invoice issuance as follows:

Time of invoicing

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 buyers, 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).

3. In case where multiple deliveries are required, or each goods item or service phase is accepted, it shall be mandatory to issue an invoice showing quantity, value of goods or service for each respective delivery or acceptance.

Thus, issuing output invoices for the sale of goods without input invoices is a violation of the law on the time of invoice issuance in Vietnam.

Invoices may only be issued at the time of transfer of ownership or rights to use the goods to the buyer, regardless of whether payment has been received or not in Vietnam.

Best regards!