Vietnam’s E-invoice Implementation: Prepare for July 2022

• Vietnam will implement obligatory digital invoicing (e-invoicing) from July 1, 2022.
• E-invoices are anticipated to save lots of companies money and time, contributing to better effectivity for each enterprises and tax authorities.
• Whereas companies have till July 2022 to transition and adjust to the brand new rules, they’re inspired to use early and implement using e-invoices for his or her enterprise.

Vietnam will mandate companies to implement e-invoices from July 2022. Thus, companies ought to put together for when the regulation comes into impact and be aligned with the authorized framework, set by Vietnamese authorities.

We are going to have a look at the a number of Decrees and circulars that the federal government has issued for implementing the mandate on e-invoices.

The Ministry of Finance issued Round 78/2021/TT-BTC (Round 78) guiding the implementation of e-invoices together with Decree 123 which we talk about beneath. Round 78 additionally takes impact from July 1, 2022.

As per Round 78, the get together that’s licensed to difficulty invoices is expounded to the vendor. This authorization have to be made in writing by way of an settlement between the 2 events. These two events should additionally register with the tax division. As a follow-up to Round 78, Vietnam additionally issued Official Dispatch No. 4144 which discusses bill kind numbers, image quantity, serial quantity, and steerage for correction of the issued e-invoices.

As per Round 78, the pilot implementation of section 1 of e-invoices already began in some provinces from November 1, 2021. These embrace Hanoi, Ho Chi Minh Metropolis, Hai Phong, Phu Tho, Quang Ninh, and Binh Dinh. Section 2 will start from April 2022 and tax authorities will determine which localities shall be a part of this section.

Previous to this, Vietnam additionally issued Decree 123/2020/ND-CP (Decree 123) guiding the implementation of invoices and a postponement within the implementation of e-invoices till July 1, 2022. Earlier the deadline, for implementing using e-invoices was November 1, 2020.

As per Decree 123, the present invoicing rules together with Decree 51/2010/ND-CP, Decree 04/2014/ND-CP, and Decree 119/2019/ND-CP will stay efficient through the transition interval till June 30, 2022, although some facets of Decree 119 have been eradicated after November 1, 2020.

Nonetheless, if companies obtain a notification from the tax authorities, they’re required to change to e-invoices as stipulated within the timeframe issued by the tax division.

If companies don’t have the mandatory infrastructure in place to implement using e-invoicing, they’ll use the present invoices however should submit data referring to invoices in Type 3 as per Decree 123, together with the submission of VAT returns.

As well as, newly established companies which were instructed by the tax authorities to implement e-invoicing however don’t have the infrastructure in place can use invoices as per Decree 51 and Decree 4 however might want to submit Type 3 as per Decree 123.

Pointers on implementing e-invoicing: Round 68

Vietnam issued Round 68/2019/TT-BTC (Round 68) to supply steerage for Decree 119/2018/ND-CP (Decree 119) on using digital invoices (e-invoices). Decree 119 states that every one companies, excluding family companies or people, should difficulty an e-invoice with or with out the tax verification code to the client for the sale of products and providers.

Under, we spotlight the steps and procedures buyers ought to undertake to assist them grow to be compliant with the brand new rules.

Varieties of e-invoices

There are two forms of e-invoices: one with the tax authority’s verification code and one with out. E-invoices with the verification codes can be utilized for tax declarations.

Companies within the electrical energy, petroleum, telecommunication, credit score financing, transportation, e-commerce, insurance coverage, supermarkets, and buying and selling sectors can use e-invoices with out tax verification codes.

As well as, enterprises that transact straight with the tax authorities electronically or have the expertise infrastructure, accounting software program, and e-invoice software program as per rules aren’t required to make use of e-invoices with verification codes.

People and corporations within the excessive tax threat class which are concerned within the agriculture, forestry, fishery, trade, and building sectors, make use of greater than 10 laborers, and have an annual income over US$130,000 (VND 3 billion) within the previous 12 months should use e-invoices with verification codes.

The identical goes for people and corporations which have annual income of over US$430,000 (VND 10 billion) within the commerce and providers sector.

E-invoice registration

Firms must register earlier than they use e-invoices (with or with out tax codes) to get approval from the tax authorities by way of the Common Division of Taxation’s web site.

In case a point-of-sale (POS) system is used, the vendor must register for using e-invoices despatched by the POS system for on-line switch of information with the tax division.

E-invoices should even be written in Vietnamese. Whereas different languages may be included, it can not change Vietnamese.

Easy methods to rectify errors in e-invoices

For e-invoices that include errors, there are three situations for correction:

• If a mistake is made within the purchaser’s identify and deal with, however different data is right, the vendor ought to inform the purchase and ship a discover to the tax authorities (the e-invoice is not going to be required to be re-issued);
• If the tax code, bill quantity, tax charge, tax quantity, or description of products is wrong, a brand new e-invoice will have to be issued (the vendor and consumers might want to put together a doc specifying the errors and ship a discover to the tax authority); and
• If the tax division finds an error within the e-invoice, it’ll ship a discover to the vendor and the vendor might want to re-issue the e-invoice within the designated time-frame.
• As per Round 78, if the vendor points an bill and there’s a cancellation of service, the vendor will cancel the issued e-invoice and notify the tax authority on bill cancellation.
• If the e-invoice is issued with out an bill image or quantity, the vendor will make changes with none cancellation or substitute.

Transition interval

Companies which have already self-printed their invoices or have acquired invoices issued by the tax authorities earlier than October 19, 2020, can use them until the tip of June 30, 2022, in accordance with Decree 123.

If a agency’s IT infrastructure just isn’t prepared by the deadline, they’ll apply for an extension and ship invoices utilizing a ‘Type 3’ as an attachment as talked about earlier.

Public organizations, resembling medical institutions and faculties, that use price receipts are allowed to proceed utilizing the receipts however want to maneuver to digital receipts or e-invoices in line with the roadmap of the Ministry of Finance.

Companies exporting items are additionally required to difficulty e-VAT invoices or e-sales invoices as soon as export procedures are accomplished.

The e-signature of the client just isn’t obligatory on e-invoices. So long as the client meets technical situations for digital signing, the client can electronically signal e-invoices if that is agreed between the vendor and purchaser.

Vietnam continues to go the digital manner

The newest growth displays the federal government’s transfer to reform tax administration and overhaul the casual financial system. E-invoices is not going to solely save time and prices, however will even cut back the executive burden and assist in account reconciliation, minimizing billing frauds, and sustaining transparency.

Altogether the federal government expects the initiative to save lots of round US$43.9 million (VND 1 trillion) if the projected 2.5 billion invoices are utilized in a 12 months. Till the tip of October 2021, round 850,000 companies had signed up for digital filings.

The brand new rules be certain that the federal government’s focus stays on decreasing administrative prices and reform tax points. Nonetheless, companies are prone to face some challenges through the transition interval and will fastidiously research the brand new modifications to make acceptable changes. Decree 123’s extension can thus be used, permitting for added time to make the required modifications for utility.