On October 19, 2020, the Government of Vietnam issued the Decree No. 123/2020/NĐ-CP prescribing invoices and records, which helps enterprises and local tax authorities determine when to make the switch to the use of e-invoices.
Article table of contents
According to Clause 2 Article 35 of the Decree No. 119/2018/NĐ-CP of Vietnam’s Government:
2. The implementation of e-invoices and authenticated e-invoices as provided by this Decree shall be completed by enterprises, economic or other organizations, business households and individuals by November 01, 2020.
According to this provision, enterprises that are using paper invoices must switch to electronic invoices from November 01, 2020.
However, when the Law on Tax Administration 2019 of Vietnam was issued, the time to apply e-invoices was re-stipulated as follows:
Regulations on electronic documents and invoices of this Law come into force from July 01, 2022; organizations and individuals are recommended to apply regulations on electronic documents and invoices in this Law before July 01, 2022.
The difference in the mandatory time to apply e-invoices between Decree No. 119/2018/NĐ-CP and the Law on Tax Administration 2019 of Vietnam has led to the fact that enterprises are "bewildered", local tax authorities are "confused" not knowing exactly when to switch to using e-invoices.
To resolve conflicts and overlaps between these two regulations, on October 19, 2020, the Government of Vietnam issued the Decree No. 123/2020/NĐ-CP to troubleshoot the official time to compel e-invoices in accordance with the provisions of the Law on Tax Administration 2019. To be specific:
1. Annulling the provision that e-invoices are compulsorily used from November 01, 2020 of Decree No. 119/2018/NĐ-CP
According to Clause 3 Article 59 of the Decree No. 123/2020/NĐ-CP of Vietnam’s Government:
Clause 2 and Clause 4 Article 35 of the Government’s Decree No. 119/2018/ND-CP dated September 12, 2018 are abrogated from November 01, 2020.
Thus, according to this provision, the provision that e-invoices are compulsorily used from November 01, 2020 will be abolished.
2. Guiding the time for application of use of e-invoices for enterprise
According to Article 60 of the Decree No. 123/2020/NĐ-CP of Vietnam’s Government, the application of use of e-invoices for enterprise is guided as follows:
- Authorities, organizations and individuals that meet IT infrastructure requirements are encouraged to apply regulations on e-invoices and electronic records herein before July 01, 2022.
- Enterprises that have announced the issuance of ordered invoices, self-printed invoices, i.e. paper invoices can continue to use them from October 19, 2020 to the end of June 30, 2022.
- Enterprises that are using e-invoices without codes or have registered to apply e-invoices with tax authorities' codes, purchased invoices from tax authorities before October 19, 2020, may continue to use these invoices until the end of June 30, 2022.
- By June 30, 2022, in case the tax authority announces the conversion to the application of e-invoices, if a business establishment that has not yet met the requirements for information technology infrastructure and continues to use paper invoices, it must:
+ Send invoice data to the tax authority according to Form No. 03/DL-HDDT Appendix I issued together with Decree No. 123/2020/NĐ-CP; and
+ Submit a value-added tax return.
- With respect to businesses established during the period from October 19, 2020 to June 30, 2022, application of use of e-invoices is as follows:
+ If tax authorities order them to use e-invoices in accordance with the provisions of Decree No. 123/2020/NĐ-CP, they must follow the tax authority’s instructions;
+ If they continue to use the invoices prescribed in the Decree No. 51/2010/ND-CP because of their failure to meet information technology infrastructure requirements, they shall follow the guidelines provided above.
3. Mandatory switch to using e-invoices from July 01, 2022
According to Clause 1 Article 90 and Clause 2 Article 151 of the Law on Tax Administration 2019 of Vietnam:
When selling goods/services, the seller shall issue and send electronic invoices to buyers. The electronic invoices shall follow standard formats and contain sufficient information in accordance with tax laws and accounting laws, regardless of the value of each sale.
Regulations on electronic documents and invoices of this Law come into force from July 01, 2022; organizations and individuals are recommended to apply regulations on electronic documents and invoices in this Law before July 01, 2022.
In summary, from now until the end of June 30, 2022, enterprises are still allowed to use paper invoices. From July 01, 2022, enterprises must switch to using e-invoices according to the provisions of Decree No. 123/2020/NĐ-CP and the Law on Tax Administration 2019 of Vietnam.
Thuy Tram
- Key word:
- Decree No. 123/2020/NĐ-CP
- e-invoices
