What Is a Legal Electronic Invoice and What Is an Illegal Electronic Invoice?

Decree 119/2018/ND-CP issued by the Government of Vietnam on September 12, 2018, regulates electronic invoices when selling goods and providing services. This is considered a significant step to help the State manage taxes more effectively and reduce the situation of enterprises evading taxes.

Legal Electronic Invoice is an invoice that meets the conditions as stipulated by law. To be specific, Decree 119 specifies the following conditions:

  1. For Invoices Generated from a Computer:

- Recognizable as an invoice printed from a cash register connected electronically to the tax authority;- Not required to have a digital signature;- Expenditure on the purchase of goods and services using the invoice (or copies of the invoice or information retrieval from the General Department of Taxation's electronic information portal) generated from the cash register is considered as having lawful invoices and vouchers when determining tax obligations.

  1. Regarding Content:

- Invoice name, invoice symbol, form number symbol, invoice number;- Name, address, tax identification number of the seller;- Name, address, tax identification number of the buyer (if the buyer has a tax identification number);- Name, unit of measure, quantity, unit price of goods and services; the amount before value-added tax, value-added tax rate, total value-added tax according to each tax rate, total value-added tax, the total amount of payment including value-added tax in the case of value-added tax invoices;- Total amount of payment;- Digital signature, electronic signature of the seller;- Digital signature, electronic signature of the buyer (if any);- Time of issue of the electronic invoice;- Tax authority code for electronic invoices with a tax authority code;- Fees, charges belonging to the state budget and other related content (if any).

  1. Time of Issue of the Electronic Invoice:

- For the sale of goods, it is the time of transfer of ownership or the right to use the goods to the buyer, regardless of whether the money has been collected or not;- For the provision of services, it is the time of completion of the service provision or the time of issuing the service provision invoice, regardless of whether the money has been collected or not;- In case of multiple deliveries or handovers of individual items or service stages, an invoice must be issued for each delivery or handover for the quantity and value of the goods and services delivered accordingly.

  1. The format of the electronic invoice must comply with the data standards for electronic invoices used in the sale of goods and provision of services according to the regulations of the Ministry of Finance.

Besides, the Decree stipulates that Illegal Invoice is an invoice that does not meet the above conditions or falls into cases specified in Clauses 9 and 10, Article 3, Decree 119.

Decree 119/2018/ND-CP is effective from November 1, 2018.

- Thanh Lam -

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