Is an invoice issued for returned goods in Vietnam?

Is an invoice issued for returned goods in Vietnam? (Internet image)

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

1. Is an invoice issued for returned goods in Vietnam?

Pursuant to Clause 1, Article 4 of Decree 123/2020/ND-CP regulating invoices and records in Vietnam:

When selling goods or providing services, the seller shall issue and send invoices to buyers (including goods/services used for sales promotion, advertising or as samples, goods/services gifted, donated, exchanged or used as salary payment to employees and internal use (except goods which are internally rotated in production process), and goods rented, lent or returned). Such invoices shall have adequate contents written according to the provisions in Article 10 of Decree 123/2020/ND-CP, except e-invoices which must follow the standard format prescribed by tax authorities as prescribed in Article 12 of Decree 123/2020/ND-CP.

Thus, when the buyer returns the goods (returned goods) to the seller, a return invoice must be issued.

2. Who must issue a return invoice in Vietnam?

According to instructions in Official Dispatch 8999/CTTPHCM-TTHT in 2023 issued by the Department of Taxation of Ho Chi Minh City issued regulations:

- If an organization or individual purchases goods, the seller has issued an invoice, and the buyer has received the goods. But if later the buyer discovers that the goods do not comply with specifications or quality and must return all or part of the goods, the seller issues a return invoice to reduce or replace the invoice that was issued. The seller and buyer have an agreement clearly stating the returned goods.

In the case of goods purchased before January 1, 2023 that are subject to VAT reduction at a tax rate of 8%, after December 31, 2022, the buyer returns the goods due to incorrect specifications or quality, and the seller issues an invoice to return the goods with a VAT rate of 8%.

Thus, according to the above regulations, the seller must issue a goods return invoice to reduce or replace the issued invoice.

3. What is the period of declaration of the invoice for returning goods in Vietnam?

According to the guidance of Official Dispatch 28218/CTHN-TTHT 2022 on the electronic invoice tax policy issued by the Hanoi Tax Department:

In case the Company issues a return invoice, adjustment invoice, or replacement invoice according to the provisions of Article 4 and Article 19 of Decree 126/2020/ND-CP above, the Company shall declare VAT on the above invoices as follows:

- For return invoices: The company declares at the time the return invoice is issued.

- For adjusted and replaced invoices: The Company shall make additional declarations and adjustments in the tax period containing errors as prescribed in Article 47 of the Law on Tax Administration 2019 and Clause 4 of Article 7 of Decree 126/2020/ND-CP.

Referring to the provisions in Article 47 of the Law on Tax Administration 2019, there are regulations on additional declaration of tax declaration documents as follows:

- Taxpayers who discover that the tax declaration documents submitted to the tax authority contain errors or omissions may submit additional tax declaration documents within 10 years from the deadline for submitting the tax declaration for the tax period with errors or omissions, but before the tax authority or competent authority announces the inspection and examination decision.

- When the tax authority or competent authority has announced the tax inspection and examination decision at the taxpayer's headquarters, the taxpayer can still make additional tax declaration documents; Tax authorities shall sanction administrative violations of tax administration for acts prescribed by law.

- After the tax authority or competent authority has issued conclusions and decisions on tax handling after inspection and examination at the taxpayer's headquarters, additional declaration of tax declaration dossiers are prescribed as follows: 

+ Taxpayers are allowed to supplement their tax declaration dossiers in cases that increase the tax amount payable, reduce the amount of tax deductible, or reduce the amount of tax exempted, reduced, or refunded, and are subject to administrative penalties on tax management for acts prescribed by law;

+ In case the taxpayer discovers that the tax declaration has errors or omissions, if the additional declaration reduces the tax amount payable, increases the amount of tax deductible, increases the amount of tax exempted, reduced, or refunded, then comply with regulations on resolving tax complaints.

In short, according to the latest current guidance, in cases where the buyer has received the goods but later discovers that they are not in accordance with specifications or quality, they must return all or part of the goods. The seller issues a goods return invoice to reduce or replace the issued invoice.

Nguyen Ngoc Que Anh

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