Are businesses subject to enforcement by suspending use of invoices allowed to issue retail invoices in Vietnam? (Internet image)

Regarding this matter, LawNet would like to answer as follows:

1. What are the cases of enforcement by suspending use of invoices in Vietnam?

Enforcement by suspending use of invoices, is one of the tax enforcement measures of tax authorities against violating organizations and individuals.

Clause 1, Article 34 of Decree 126/2020/ND-CP stipulates that cases of enforcement by suspending use of invoices in Vietnam include:

(1) This enforcement measure will be implemented when the enforcement measures specified in Points a, b and c Clause 1 Article 125 of the Law on Tax Administration 2019 cannot be implemented, 

- Extract money from the taxpayer’s account at the State Treasury, commercial bank or credit institution; freezing accounts;

- Deduct money from the taxpayer’ salary or income;

- Suspend customs procedures for exports or imports;

(2) Tax is not fully collected after measures specified in Points a, b and c Clause 1 Article 125 of the Law on Tax Administration 2019 are implemented, in the cases specified in Clause 3 Article 125 of the Law on Tax Administration 2019, or at the request of tax authorities.

2. Are businesses subject to enforcement by suspending use of invoices allowed to issue retail invoices in Vietnam? 

According to the provisions of Clause 2, Article 13 of Decree 123/2020/ND-CP, there are regulations on issuing electronic invoices with tax authority codes each time they arise as value-added invoices in the following cases:

- Any enterprise, business entity or other organization paying VAT following credit-invoice method and:

+ ceases business operation without completing procedures for TIN invalidation, liquidates assets and thus needs to provide invoices for the buyers;

+ suspends business operation and needs to provide invoices for customers to execute the contracts concluded before the date on which the tax authority notifies the business suspension;

+ is banned from using invoices by the tax authority.

At the same time, Point d, Clause 4, Article 34 of Decree 126/2020/ND-CP stipulates:

 In case the taxpayer submits a written request for permission to use invoices to pay employees and costs that are necessary for continuous business operation while this enforcement measure is being implemented, the tax authority shall allow the taxpayer to use invoices separately provided at least 18% of the revenue written on these invoices are immediately paid to state budget.

In addition, based on Section 5 of Official Dispatch 5113/TCT-CS of 2021, Official Dispatch 37935/CTHN-TTHT of 2023 providing guidance on the use of invoices during enforcement:

- In case an enterprise subject to enforcement by suspending use of invoices provide goods and services to many different customers, when requesting invoices for each occurrence: they are allowed to use multiple invoices at once and must pay the required taxes according to regulations or pay 18% of the revenue on the invoice used.

- Enterprises paying value-added tax by the deduction method are compelled to stop using invoices, so electronic invoices are used for each occurrence.

Therefore, when enterprises are compelled to use invoices, they can still use electronic invoices with the tax authority code for each occurrence to ensure continuous payment sources for employee salaries and production-related expenses.

Nguyen Ngoc Que Anh

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