The Government of Vietnam issued Decree No. 119/2018/ND-CP with several new regulations regarding e-invoices for sale of goods and provision of services. In the near future, the use of electronic invoices will become more widespread. Therefore, it is important for organizations to be familiar with the following important regulations regarding e-invoices.
Article table of contents
1. Regulation on the time of application of e-invoices
Enterprises that have informed the issue of e-invoices before November 01, 2018 shall be allowed to continue to use existing e-invoices.
Units 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. After receipt of the tax authority’s notification of use of authenticated e-invoices, if the informed business fails to meet information technology infrastructure requirements and continue to use the aforesaid invoices, it must send its invoice data to the tax authority and submit its VAT declaration.
With respect to businesses newly established during the period from November 01, 2018 to October 31, 2020, if the tax authority informs businesses of implementing e-invoices, these businesses must follow the tax authority’s instructions. If any business continues to use invoices due to its failure to meet requirements for use of e-invoices, that business may use paper invoices as prescribed in Decree No. 51/2010/ND-CP and Decree No. 04/2014/ND-CP of Vietnam’s Government.
2. Handling of e-invoices containing errors
According to Article 17 of Decree No. 119/2018/ND-CP of Vietnam’s Government, in case where it is discovered that authenticated e-invoices which have not been sent to buyers contain errors, sellers shall inform the tax authority of cancellation of the authenticated e-invoices which have been created and contain errors, and prepare new e-invoices in place of the previous ones.
In case where it is discovered that authenticated e-invoices which have already been sent to buyers contain errors, sellers and buyers shall enter into a written agreement clearly stating errors or inform e-invoices containing errors and sellers shall inform the tax authority of cancellation of the authenticated e-invoices which have been created and contain errors, and prepare new e-invoices in place of the previous ones.
The information of e-invoices containing errors shall be carried out using Form No. 04 appended to Decree No. 119/2018/ND-CP.
3. Cases of free provision of authenticated e-invoices
According to Decree No. 119/2018/ND-CP, 05 cases of free provision of 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 (except those stated in point a of this clause) 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 under the provisions of this Decree;
- 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.
4. Paper invoices which remain unused must be destroyed
This is the content specified in Clause 3 Article 14 of Decree No. 119/2018/ND-CP. According to this provision, from the date on which authenticated e-invoices are used, units shall be bound to destroy paper invoices which remain unused (if any) in accordance with regulations in force.
5. Procedures for registration for use of e-invoices
Article 14 and Article 20 of Decree No. 119/2018/ND-CP stipulate that units falling into the cases in which they are required to use e-invoices shall register for the access to unauthenticated e-invoices at the Web Portal of the General Department of Taxation. Information about registration for or changes in use of these -e-invoices is given in the Form No. 01 hereto appended.
Duy Thinh
