08 New Provisions on E-Invoices of Enterprises in Circular 68 in Vietnam

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In this Circular, there are noteworthy new contents that enterprises, organizations, individuals, households, and individual businesses in Vietnam need to be aware of:

1. Three important timelines regarding e-invoices in Vietnam

- From November 1, 2018, to October 31, 2020: If the tax authority has not notified enterprises, economic organizations, other organizations, households, and individual businesses to switch to using e-invoices according to Decree 119/2018/ND-CP and as guided in Circular 68/2019/TT-BTC, then the aforementioned entities still apply invoices according to Decree 51/2010/ND-CP, Decree 04/2014/ND-CP, and the guiding documents for implementation.

- From November 1, 2020: Enterprises, economic organizations, other organizations, households, and individual businesses must register to apply e-invoices as guided in Circular 68/2019/TT-BTC. Moreover, the following Decisions and Circulars will also cease to be effective from this date: Circular 32/2011/TT-BTC, Circular 191/2010/TT-BTC, Circular 39/2014/TT-BTC, Decision 1209/QD-BTC, Decision 2660/QD-BTC, and Circular 37/2017/TT-BTC.

- From the time enterprises, organizations, individuals, households, and individual businesses use e-invoices according to regulations in Circular 68/2019/TT-BTC: If errors are found in invoices issued according to Decree 51/2010/ND-CP, Decree 04/2014/ND-CP, and guiding documents from the Ministry of Finance, the seller and buyer must create a written agreement clarifying the errors, the seller must notify the tax authority using Form No. 04 Appendix issued with Decree 119/2018/ND-CP, and create a new electronic invoice (with or without the tax authority's code) to replace the erroneous one. Simultaneously, the seller must digitally sign the new electronic invoice and send it to the tax authority to get a code for the replacement electronic invoice (if using e-invoices with codes from the tax authority).

Note: The replacement electronic invoice for the erroneous one must have the statement “Replacement for invoice Form No... symbol... number... date... month... year”.

2. Eight cases where e-invoices do not need to have all mandatory elements in Vietnam

According to current law, e-invoices for goods sales and service provision must have all mandatory content listed in Clause 1, Article 3 of Circular 68/2019/TT-BTC. However, in the following eight cases, the invoice does not necessarily need to have all these elements:

- E-invoices do not necessarily need the buyer's digital signature (including cases of issuing e-invoices for selling goods or providing services to foreign customers). If the buyer is a business entity and there is an agreement between the buyer and seller on the buyer's capability to digitally sign and electronically sign the seller’s e-invoices, the invoice should have the digital signatures of both parties.

- For e-invoices for sales in supermarkets or shopping centers where the buyer is an individual not engaged in business, the invoice does not need to include the buyer's name, address, or tax code.

- For e-invoices for fuel sales to individual customers not engaged in business, the invoice does not need to include the invoice name, invoice form symbol, invoice symbol, invoice number; buyer’s name, address, tax code; buyer’s digital signature; seller’s digital signature, value-added tax rate. Sellers must ensure complete storage of e-invoices in the case of fuel sales to individual non-business customers according to regulations and ensure they are accessible upon request by competent authorities.

- For e-invoices as labels, tickets, cards, the invoice does not need to have the seller's digital signature, buyer’s details (name, address, tax code), tax amount, value-added tax rate. If electronic labels, tickets, cards already have a fixed price, they do not need to include the unit of measure, quantity, unit price elements.

- For electronic service documents for air transportation issued through websites and e-commerce systems as per international practices for non-business individual customers, the invoice does not need to include the invoice symbol, invoice form symbol, invoice order number, value-added tax rate, buyer’s tax code, buyer’s address, buyer’s digital signature.

For organizations purchasing air transportation services, the electronic service documents issued through websites and e-commerce systems according to international practices for non-business individuals of the organization are not regarded as e-invoices. The air transport service enterprise or agent must issue full-content e-invoices to the organization utilizing the services.

- For invoices of construction and installation activities; activities of selling houses for install and progressive payments as per contract, the invoice does not need the unit of measure, quantity, unit price elements.

- For electronic delivery cum transport invoices, they should not feature the buyer's details but should include transporter name, transportation means, warehouse of goods issuance address, warehouse receipt address; not showing tax amount, tax rate, total payment amount.

- For Interline payment invoices between airlines according to the regulations of the International Air Transport Association, the invoice does not need to include the invoice symbol, invoice form symbol, buyer’s name, address, tax code, buyer's digital signature, unit of measure, quantity, unit price.

3. Seven cases of electronic invoice code suspension

According to Circular 68, the tax authority will suspend issuing electronic invoice codes in the following cases:

- Termination of tax code validity for enterprises, economic organizations, other organizations, households, individual businesses.

- If the tax authority verifies and notifies that the enterprises, organizations, households, individual businesses are not operating at the registered address.

- If the enterprises, economic organizations, other organizations, households, individual businesses inform the competent state management agencies about a business suspension.

- If there is a notice from the tax authority about stopping the use of e-invoices to enforce tax debt collection.

- If there are acts of using electronic invoice codes from the tax authority to sell smuggled goods, prohibited goods, counterfeit goods, violating intellectual property rights, detected and reported by functional agencies to the tax authority.

- If there are acts of issuing invoice codes from the tax authority for fake sales or service provision to appropriate funds from organizations and individuals, detected and reported by functional agencies to the tax authority.

- If the business registration authorities or competent state agencies request enterprises to suspend conditional business lines upon detecting that the enterprise does not meet legal business conditions. Based on inspection results, if the tax authority determines that the enterprise was established to illegally purchase and use e-invoices or illegally use e-invoices, the enterprise will be administratively sanctioned, and the tax authority will issue a notification decision to suspend the use of electronic invoice codes.

4. Cases of stopping the use of e-invoices without tax authority codes

When subject to electronic invoice code suspension in any of the seven above-mentioned scenarios, the seller of goods/services, being an enterprise or economic organization, is not allowed to issue e-invoices without codes from the tax authority to the buyers.

The continuation of using e-invoices without the tax authority's codes will comply with Clause 2, Article 22 of Decree No. 119/2018/ND-CP.

5. Guidance on setting the time of issuing e-invoices for specific cases

According to Circular 68, the timing for issuing e-invoices for specific cases is regulated as follows:

- The time of issuing e-invoices for goods sales is when the ownership or usage rights of the goods are transferred to the buyer, regardless of whether payment has been received or not.

- The time of issuing e-invoices for service provision is when the service provision is completed or the invoice is issued, regardless of whether payment has been received or not.

- In case of multiple deliveries or handovers of each component or service stage, an invoice must be issued for each quantity and the value of delivered goods or services.

- The time of issuing e-invoices for providing utilities like electricity, water, telecommunication services, television services, and IT services sold at specified intervals is no later than seven days from the date recorded for consumption or the end of the agreed period for telecommunication, television, and IT services. The agreed period for determining the provided goods/services is according to the agreement between the service provider and the buyer.

- The time of issuing e-invoices for construction and installation activities is upon the acceptance and handover of the project, item, or construction volume completed, regardless of whether payment has been received or not.

- The time of issuing e-invoices for real estate business entities, infrastructure construction, house construction for sale, transfer without transferring ownership or use rights subject to project progress payments or contract-stipulated progress payments is the date of payment or the agreed payment time in the contract. If ownership or usage rights have been transferred, the invoice will be issued at the exact time of transfer, regardless of payment status.

- The time of issuing e-invoices for airline transport services purchased via websites and e-commerce systems according to international norms is no later than five days from the issuance date on the website and e-commerce system.

- For activities of searching, exploring, exploiting crude oil, condensate, and natural gas, the time of issuing invoices for selling crude oil, condensate, and processed gas is when the ownership or usage rights of the goods are transferred to the buyer, regardless of whether payment has been received or not. If there are multiple deliveries or component service phases, an invoice must be issued for each quantity and value of delivered goods or services.

6. Guidelines for handling erroneous e-invoices will be handled

E-invoices with tax authority code

- If the seller detects that an electronic invoice with a tax authority code that hasn't been sent to the buyer has mistakes, the seller must notify the tax authority to cancel the erroneous electronic invoice with a tax authority code and issue a new one, digitally signed, and send it to the tax authority for a new code. The tax authority will cancel the erroneous invoice stored in its system.

- If the electronic invoice with a tax authority code sent to the buyer has errors in the buyer's name or address but not in the tax code or other contents, the seller notifies the buyer of the mistake, notifies the tax authority, and does not need to re-issue the invoice.

- If the electronic invoice with a tax authority code sent to the buyer has errors in the tax code, amount, tax rate, tax amount, or in the product's specifications and quality, the seller and buyer must create a written agreement clarifying the errors and the seller notifies the tax authority to cancel the erroneous electronic invoice and issues a new one to replace it.

After receiving the notification, the tax authority cancels the erroneous invoice stored in its system. The new electronic invoice replacing the erroneous one must have the statement “Replacement for invoice symbol… number…, date…”. The seller signs the new electronic invoice digitally and sends it to the tax authority for a code.

- If the tax authority detects an erroneous electronic invoice with a code, it will notify the seller to check the error. Within two days from the notification date, the seller must notify the tax authority to cancel the erroneous invoice and issue a new electronic invoice, digitally signed, and send it to the tax authority for a new code as guided above. If the seller doesn’t notify the tax authority, it will continue to inform the seller about the erroneous invoice to be corrected or canceled.

e-invoices without a tax authority code already issued

- If an electronic invoice without a tax authority code sent to the buyer has a mistake in the buyer's name or address but not in the tax code or other contents, the seller notifies the buyer of the mistake and does not need to re-issue the invoice. If the data was sent to the tax authority, the seller informs them of the mistake.

- If an electronic invoice without a tax authority code sent to the buyer has mistakes in the tax code, amount, tax rate, tax amount, or product specifications and quality, the seller and buyer must create a written agreement clarifying the errors and the seller issues a new electronic invoice to replace the erroneous one.

The new electronic invoice must have the statement “Replacement for invoice symbol… number…, date…”. The seller signs the new electronic invoice digitally and sends it to the buyer. If the data was sent to the tax authority, the seller informs them of the correction per the method and timing in Article 16 of Circular 68.

- If, after receiving the electronic invoice data, the tax authority detects an erroneous invoice, it will notify the seller to check the error. Within two days from the notification date, the seller notifies the tax authority to cancel the erroneous invoice (if applicable). If the seller informs of the cancellation, a new invoice is issued and sent to the buyer with the updated data to the tax authority. If the seller doesn’t notify, the tax authority will continue to notify the seller of the erroneous invoice to be corrected or canceled.

Note: In such cases, the tax authority will notify the seller about the acceptance and result of the handling via Form No. 04 (Appendix issued with Decree 119/2018/ND-CP). Canceled e-invoices are not valid for use but must be retained for reference when needed.

7. Regulations on 08 mandatory contents on e-invoices

According to the provisions of Circular 68, e-invoices must contain the following contents:

- Invoice name, invoice symbol, invoice form number, invoice number;

- Seller’s name, address, tax code;

- Buyer's name, address, tax code (if the buyer has a tax code);

- Goods/service name, unit of measurement, quantity, unit price; amount excluding value-added tax (VAT), VAT rate, total VAT amount per VAT rate, total VAT amount, total amount including VAT;

- Digital signatures, electronic signatures of both the seller and the buyer;

- Time of issuance of the electronic invoice;

- Tax authority’s code for e-invoices with the tax authority’s code as prescribed in Clause 5 Article 3 of Decree No. 119/2018/ND-CP;

- Fees, charges under the state budget, trade discounts, promotions (if any).

For detailed guidelines on how to present the 08 mandatory contents on e-invoices CLICK HERE.

8. Specific regulations on electronic invoice format

According to Article 5 of Circular 68, the electronic invoice format is the technical standard that stipulates the data type, data length of the information fields for transmission, storage, and display of e-invoices. The electronic invoice format uses XML document format language; comprising two components: the component containing the transactional data of the electronic invoice and the component containing the digital signature data. For e-invoices with the tax authority’s code, there is an additional component containing data related to the tax authority's code. The General Department of Taxation builds and publishes the components containing the transactional data of the electronic invoice, the component containing the digital signature data, and provides tools to display the contents of the electronic invoice as prescribed in this Circular.

Nguyen Trinh

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