When is the VAT invoice issued in Vietnam? What are penalties for refusing to issue a VAT invoice to customers in Vietnam?

When is the VAT invoice issued in Vietnam?

According to Article 9 of Decree 123/2020/ND-CP on the invoicing time:

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).

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.

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Based on the above regulations in Vietnam, the time of VAT invoice issuance is as follows:

[1] For sale of goods: The VAT invoice is 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] For provision of services: The VAT invoice is 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, except for cases 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, etc.

[3] For multiple deliveries or each goods item or service phase: The VAT invoice is mandatory to issue an invoice showing quantity, value of goods or service for each respective delivery or acceptance.

When is the VAT invoice issued in Vietnam? What are penalties for refusing to issue a VAT invoice to customers in Vietnam? (Image from the Internet)

What are penalties for refusing to issue a VAT invoice to customers in Vietnam?

Based on Article 24 of Decree 125/2020/ND-CP stipulating penalties for violations against regulations on issuance of invoices upon sale of goods or provision of services:

Penalties for violations against regulations on issuance of invoices upon sale of goods or provision of services

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5. Fines ranging from VND 10,000,000 to VND 20,000,000 shall be imposed for any act of failing to issue invoices upon sale of goods or provision of services to buyers as required by laws, except the acts prescribed in point b of clause 2 of this Article.

6. Remedies: Compelling the issuance of invoices according to regulations with respect to the acts specified in point d of clause 4 and 5 of this Article upon buyer's request.

Therefore, refusing to issue a VAT invoice to customers will result in a fine of VND 10,000,000 to VND 20,000,000. In addition, these establishments are required to reissue invoices to the buyer if requested.

Note: The above penalty applies to violations committed by organizations in Vietnam.

Is issuing an incorrect amount of tax in the VAT invoice subject to penalties in Vietnam?

Based on the provisions of Article 12 of Decree 125/2020/ND-CP, the following regulations apply:

Penalties for acts of making false or incomplete declaration of information contained in tax dossiers that do not lead to any deficiency in taxes payable or any increase in amounts of tax exemption, reduction or refund:

1. Fines ranging from VND 500,000 to VND 1,500,000 shall be imposed for acts of making false or incomplete declaration of information required in data fields of tax dossiers which are not related to the determination of tax obligations, except the acts prescribed in clause 2 of this Article.

2. Fines ranging from VND 1,500,000 to VND 2,500,000 shall be imposed for acts of making false or incomplete declaration of information required in data fields of tax declaration forms and enclosed annexes which are not related to the determination of tax obligations.

3. Fines ranging from VND 5,000,000 to VND 8,000,000 shall be imposed for one of the following violations:

a) Falsely or incompletely filling out data fields related to the determination of tax obligations in tax dossiers;

b) Performing the acts prescribed in clause 3 of Article 16; clause 7 of Article 17 herein.

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Furthermore, according to the provisions of Article 16 of Decree 125/2020/ND-CP regarding penalties for act of making false declaration that causes any deficiency in taxes payable or any increase in amounts of tax exemption, reduction or refund:

Penalties for act of making false declaration that causes any deficiency in taxes payable or any increase in amounts of tax exemption, reduction or refund:

1. A fine which equals 20% of the underpaid tax amount or the higher-than-prescribed amount of tax exemption, reduction or refund shall be imposed for any of the following violations:

a) Making false declaration of tax bases or deductible tax amounts or incorrectly determining cases of tax exemption, reduction or refund, resulting in any deficiency in tax amounts payable or any increase in amounts of tax exemption, reduction or refund though economic activities have already been fully recorded in legitimate accounting books, invoices and evidencing documents;

b) Making false declaration causing any reduction in payable tax amounts or any increase in amounts of tax exemption, reduction or refund, which does not fall into the case specified at point a of this clause though the violating taxpayer has voluntarily made a supplementary declaration and fully paid unpaid back taxes or tax arrears to the state budget prior to the deadline for the tax authority’s tax inspection and examination at taxpayers' offices or premises;

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Therefore, under current laws, there is no provision for penalties for act of making false declaration that causes any deficiency in taxes payable or any increase in amounts of tax exemption, reduction or refund. However, if a business or establishment issues an incorrect amount of tax in the VAT invoice but does not adjust or replace it, leading to incorrect tax declaration, they will be penalized according to each case:

- If the incorrect tax declaration results in a shortage of tax payable or an increase in tax exempted, reduced, refunded amounts: penalized according to the provisions of Article 16 of Decree 125/2020/ND-CP.

- If the incorrect tax declaration results in a shortage of tax payable or does not lead to an increase in tax exempted, reduced, refunded amounts: penalized according to the provisions of Article 12 of Decree 125/2020/ND-CP.

Best Regards!