Is it compulsory to issue an invoice for gifts for customers during Lunar New Year holiday in Vietnam?

Is it compulsory to issue an invoice for gifts for customers during Lunar New Year holiday in Vietnam?

According to Official Dispatch 40744/CTHN-TTHT in 2022, the issuance of invoices for gifts to customers is as follows:

Based on Law on Tax Administration No. 38/2019/QH14 dated June 13, 2019 of the National Assembly:

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Based on Decree No. 123/2020/NĐ-CP dated October 19, 2020 of the Government regarding invoices and documents:

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Based on the above regulations, in cases where a company uses invoices as specified in Decree No. 123/2020/NĐ-CP of the Government, when selling goods or providing services, the seller must issue an invoice to the buyer (including cases where goods or services are used for promotion, advertising, samples; goods or services used for giving, gifting, exchanging, or compensating employees and internal consumption (excluding goods for internal circulation to continue the production process) as regulated in Clause 1, Article 4 of Decree No. 123/2020/NĐ-CP. Enterprises and economic organizations using electronic invoices with tax authority codes when selling goods or providing services, regardless of the value of each sale, as stipulated in Clause 1, Article 90 of Law on Tax Administration No. 38/2019/QH14 of the National Assembly.

On the other hand, based on Official Dispatch 47499/CTHN-TTHT in 2022, the calculation of VAT on gifts is as follows:

Based on Decree No. 123/2020/NĐ-CP dated October 19, 2020 of the Government regarding invoices and documents.

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Based on Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance guiding the implementation of the Law on Value Added Tax and Decree No. 209/2013/NĐ-CP dated December 18, 2013 of the Government detailing and guiding the implementation of certain provisions of the Law on Value Added Tax.

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Based on the above regulations, the Hanoi Tax Department has the following opinions:

The company must issue an invoice for goods or services used for giving, gifting to customers, and the invoice must include all required information as prescribed in Article 10 of Decree No. 123/2020/NĐ-CP. The calculation of VAT for goods or services given as gifts by the company shall be carried out according to the guidance in Clause 3, Article 7 of Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance.

In addition, based on Official Dispatch 11505/CT-TTHT in 2019, the implementation of VAT on gifts is as follows:

Based on Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance guiding the implementation of the Law on Value Added Tax and Decree No. 209/2013/NĐ-CP dated December 18, 2013 of the Government detailing and guiding the implementation of certain provisions of the Law on Value Added Tax.

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Based on Circular No. 26/2015/TT-BTC dated February 27, 2015 of the Ministry of Finance guiding VAT and tax administration in Decree No. 12/2015/NĐ-CP dated February 12, 2015 of the Government detailing the implementation of the Law amending and supplementing certain provisions of tax laws and amending and supplementing certain provisions of tax decrees and Circular No. 39/2014/TT-BTC dated March 31, 2014 of the Ministry of Finance regarding sales invoices for goods and services.

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Based on the above regulations, the Hanoi Tax Department answers as follows:

1. In the case where the company incurs expenses for purchasing goods for giving gifts to customers, the company must issue invoices, make declarations, calculate and pay VAT as for sales invoices for goods to customers as prescribed in Article 3 of Circular No. 26/2015/TT-BTC dated February 27, 2015 of the Ministry of Finance. The VAT calculation is based on the selling price of goods or services of the same type or equivalent at the time of incurring expenses for giving gifts.

2. Regarding input VAT on goods or services purchased for giving gifts to customers:

- In the case where they serve for the production and business of goods and services subject to VAT and meet the conditions as prescribed in Clause 10, Article 1 of Circular No. 26/2015/TT-BTC dated February 27, 2015 of the Ministry of Finance, the company is eligible for VAT input deduction.

- In the case where they serve for the production and business activities of goods and services not subject to VAT, the company is not eligible for VAT input deduction as prescribed in Clause 7, Article 14, Section 1, Chapter III of Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance.

3. The VAT rate for bouquets/flower arrangements is 10% as prescribed in Article 11 of Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance.

Pursuant to Clause 1 Article 9 of the Decree 123/2020/ND-CP stipulating invoicing time as follows:

Invoicing time

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.

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As regulations above, when giving Tet gifts to customers, the company must issue invoices. The time of issuing the invoice is the time of transferring ownership of the gift to the customer.

In the case where the company purchases goods to be used as Tet gifts for customers, the VAT calculation for the goods, products, and services used for Tet gifts to customers is based on the VAT calculation of goods and services of the same type or equivalent at the time of incurring expenses for giving gifts.

Regarding input VAT on goods or services purchased for giving gifts to customers:

- In the case where they serve for the production and business of goods and services subject to VAT and meet the conditions as prescribed in Article 15 of Circular No. 219/2013/TT-BTC, amended by Clause 10, Article 1 of Circular No. 26/2015/TT-BTC, the company is eligible for VAT input deduction.

- In the case where they serve for the production and business activities of goods and services not subject to VAT, the company is not eligible for VAT input deduction as prescribed in Clause 7, Article 14 of Circular No. 219/2013/TT-BTC.

Invoices issued for Tet gifts for customers must include the following information:

- Name of the invoice, invoice symbol, invoice template symbol.

- Name of the invoice form applicable to invoices printed by the tax authority according to the instructions of the Ministry of Finance.

- Invoice number.

- Name, address, tax code of the seller, buyer.

- Name, unit of measurement, quantity, price of goods, services; total amount without VAT, VAT rate, total VAT amount according to each VAT rate, total amount including VAT.

- Signature of the seller, signature of the buyer.

- Time of issuing the invoice, digital signature of the invoice.

- Tax agency code for electronic invoices with the tax agency code.

- Fees, charges belonging to the state budget, trade discounts, promotions (if any) according to the instructions at point e, clause 6 of this Article and other related contents (if any).

- Name, tax code of the organization receiving invoice printing for invoices ordered by the tax authority.

- Written text, numbers, and currency displayed on the invoice.

- Other content.

Is it compulsory to issue an invoice for gifts for customers during Lunar New Year holiday in Vietnam? What are types of invoices in Vietnam? - Image from Internet

What are types of invoices in Vietnam?

Pursuant to Article 8 of the Decree 123/2020/ND-CP stipulating types of invoices in Vietnam as follows:

Invoice types

Invoices prescribed herein are classified into the following types:

1. Value-added tax (VAT) invoice is an invoice which may be used by organizations making VAT declaration by employing the credit-invoice method for the following activities:

a) Domestic sale of goods or provision of services;

b) Provision of international transport services;

c) Export of goods to free trade zones and other cases considered as export of goods;

d) Export of goods or provision of services in a foreign market.

2. Sales invoice is an invoice which may be used by the following organizations and individuals:

a) Organizations or individuals that declare and calculate VAT by employing direct method for the following activities:

- Domestic sale of goods or provision of services;

- Provision of international transport services;

- Export of goods to free trade zones and other cases considered as export of goods;

- Export of goods or provision of services in a foreign market.

b) Organizations or individuals in free trade zones that sell goods or provide services to the domestic market, sell goods or provide services to other organizations/individuals in free trade zones, or sell goods or provide services to a foreign market. In such cases, invoices must bear the phrase “Dành cho tổ chức, cá nhân trong khu phi thuế quan” ("For organizations/individuals in free trade zones”).

3. Public property electronic sales invoice is used when selling the following types of property:

a) Public property at authorities, organizations or units (including state owned houses);

b) Infrastructure property;

c) Public property that is managed by enterprises as assigned by the Government, excluding state capital invested in enterprises;

d) Property of state-funded projects;

dd) Property under the established all-people ownership;

e) Public property appropriated under decisions issued by competent regulatory authorities or officials;

g) Raw materials and supplies obtained from the disposal of public property.

4. Electronic sales invoice on national reserve goods is used when a state reserves agency or unit sells national reserve goods in accordance with regulations and laws.

5. Other invoices, including:

a) Stamps, tickets and cards in the form and containing contents prescribed herein;

b) Air freight receipts; receipts of international transport charges; receipts of banking service charges, except the cases prescribed in Point a of this Clause where a record whose format and contents are made according to international practices and regulations of relevant laws.

6. Records printed, issued, used and managed in the same manner as invoices, including delivery and internal transfer note, and delivery notes for goods sent to sales agents.

7. The Ministry of Finance shall provide specific guidance on templates of invoices used by the entities prescribed in Article 2 hereof for reference purposes.

As regulations above, types of invoices in Vietnam are:

- Value-added tax (VAT) invoice

- Sales invoice

- Public property electronic sales invoice

- Electronic sales invoice on national reserve goods

- Other invoices, including: Stamps, tickets and cards in the form and containing contents prescribed by law; Air freight receipts; receipts of international transport charges; receipts of banking service charges

- Delivery and internal transfer note, and delivery notes for goods sent to sales agents.

What is the invoicing time for sale of goods in Vietnam?

Pursuant to Clause 1 Article 9 of the Decree 123/2020/ND-CP stipulating the invoicing time as follows:

Invoicing time

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).

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As regulations above, invoices for sale of goods shall be issued when the right to own or use goods is transferred to buyers.

Note: the invoices for sale of goods shall be issued at the correct timing whether the payment of the invoiced amount is made or not.

Best regards!