Vietnam: 5 notable contents of Decree No. 119/2018/ND-CP on e-invoices

Below are some notable points mentioned in the Decree:

1. Completing the conversion into e-invoices by November 01, 2020

Clause 2 - Article 35 of Decree No. 119/2018/ND-CP of Vietnam’s Government states: “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.”

Enterprises, economic organizations, business households or individuals that have informed the issue of externally printed or internally printed invoices or have purchased invoices issued by the tax authority for use before November 01, 2018 shall be entitled to continue to use these invoices until the end of October 31, 2020.

2. Unauthenticated e-invoices may be used for enterprises doing business in certain sectors

Unauthenticated e-invoices may be used for enterprises doing business in the following sectors: electricity, petroleum, post and telecommunications, air transport, road transport, rail transport, sea transport, inland water transport, clean water, finance and credit, insurance, healthcare, electronic commerce, supermarket business, commerce, and enterprises or economic organizations, which have already transacted or will transact with tax authorities via electronic means.

However, the above-mentioned enterprises must use authenticated e-invoices, if

- The enterprise poses high risks related to taxes; or

- The registration for use of authenticated e-invoices is required.

3. Authenticated e-invoices shall apply for business households of which the revenue equals at least 03 (three) billion dong 

According to Article 12 of Decree No. 119/2018/ND-CP, individuals and organizations obliged to use authenticated e-invoices are prescribed as follows:

- Business households or individuals keeping accounting records, regularly hiring at least 10 employees and earning the preceding year’s revenue which equals at least 03 (three) billion dong in the agriculture, forestry, aquaculture, industry or construction sector, or gaining the preceding year’s revenue equaling at least 10 (ten) billion dong in the commerce and service sector;

- If business households or individuals that are not bound to use e-invoices keep their accounting records and wish to use e-invoices, they may use authenticated e-invoices as prescribed by laws;

- Business households or individuals doing business in such sectors as restaurant, hotel, modern medicine retailing, retailing of fast-moving consumer goods and online provision of services to consumers at certain areas having disadvantageous conditions shall have access to pilot authenticated e-invoices;

- If business households and individuals that do not satisfy the regulatory requirements that bind them to use authenticated e-invoices, but need invoices issued to their customers, or if enterprises, economic or other organizations obtains the tax authority’s approval to use e-invoices to issue to their customers, they shall be entitled to receive authenticated e-invoices from the tax authority at each time when a transaction occurs;

- Enterprises, economic or other organizations that pose high risks related to taxes shall be required to use authenticated e-invoices for their provision of goods or services, regardless of the value of each provision of goods or services.

4. Paper invoices which remain unused must be destroyed from the date on which authenticated e-invoices are used

Clause 3 - Article 14 of Decree No. 119/2018/ND-CP clearly states: “From the date on which authenticated e-invoices are used, enterprises, economic or other organizations or business households or individuals shall be bound to destroy paper invoices which remain unused (if any) in accordance with regulations in force.”

Thus, after transitioning to using authenticated e-invoices, businesses cannot continue to use paper invoices and must cancel the paper invoices according to the regulations.

5. 5 groups of entities eligible for free provision of authenticated e-invoices

According to Article 13 of Decree No. 119/2018/ND-CP, enterprises, economic organizations, business households or individuals that shall not be charged for services related to authenticated e-invoices include:

- Small- and medium-sized enterprises, cooperatives, business households and individuals that operate at areas facing socio-economic difficulties or extreme socio-economic difficulties;

- Small- and medium-sized creative startups prescribed by soft laws and business households or individuals that are transformed into enterprises within a period of 12 months after their establishment;

- Business households or individuals. Business households or individuals earn the preceding year’s revenue which equals at least 03 (three) billion dong in the agriculture, forestry, aquaculture, industry or construction sector, or gain the preceding year’s revenue equaling at least 10 (ten) billion dong in the commerce and service sector, as provided in clause 4 Article 12 hereof within a period of 12 months from the month of use of authenticated e-invoices;

- Other small- and medium-sized enterprises which are defined according to the requests of the People’s Committees of centrally-affiliated cities and provinces, and the regulations of the Ministry of Finance, except enterprises operating at economic zones, industrial parks or hi-tech zones;

- Those falling into other cases in which they are entitled to incentive policies under the decision issued by the Ministry of Finance.

Source: Einvoice.vn

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