Decree 123/2020/ND-CP (“Decree 123” or “the Decree”) was issued by the Vietnamese Government on 19 October 2020, providing guidance in relation to invoices and vouchers, including the issuance of e-invoices.
Delay in compulsory e-invoice implementation
The Most significant change arising from Decree 123 is the delay to the deadline for compulsory e-invoice implementation, which has been extended from 1 November 2020 to 1 July 2022. The purpose is to provide more time for organisations operating in Vietnam to transition to the e-invoice system.
Prohibited acts when using invoices and vouchers
The Decree specifies prohibited acts regarding invoices and related documents for both tax officials and organisations or individuals selling or providing goods or services:
Tax officials are prohibited from:
- Creating difficulties for organisations and individuals in buying invoices and vouchers;
- Colluding with organisations and individuals in order to use illegal invoices and vouchers;
- Receiving bribes upon inspecting and examining invoices.
Organisations or individuals selling or providing goods or services are prohibited from:
- Committing fraudulent acts of using illegal invoices or using invoices in illegal operations;
- Obstructing tax officials from performing their duties, specifically acts of obstructing tax officers while inspecting and examining invoices and vouchers; >Illegally accessing, falsifying or destroying the information system of invoices and vouchers;
- Providing bribes or committing other acts related to invoices and documents for illegal purposes.
Classification of invoice types
- Invoices covered by this Decree include the following:
- Value Added Tax Invoice, which is an invoices for the domestic sales of goods and services by organisations and individuals that declare Value Added Tax (“VAT”) under the credit method;
- Sale invoice, which is an invoice for the domestic sales of goods and services by organisations and individuals that declare VAT under the direct method;
- Electronic invoice for selling public assets;
- Invoice for selling national reserves;
- Other documents which are treated as invoices including: tickets, cards or documents which have other names.
Electronic invoices and electronic voucher formats
The Decree regulates the format of electronic invoices and vouchers to be in XML text format.
Usage provisions of electronic invoices
The Tax Authorities are required to authorise e-invoice service providers to provide e-invoices with the tax authority’s code without service charges to:
- Small and medium-sized organisations, households and individuals doing business in areas with difficult or extremely difficult socio-economic conditions. Areas with difficult socio-economic conditions are required to comply with the list of geographical areas with investment incentives issued together with Decree 118/2015/ND-CP
- Other small and medium-sized organisations at the request of the People’s Committees of Provinces and centrally run cities sent to the Ministry of Finance, except for enterprises operating in economic zones, industrial parks or hi-tech parks.
- Organisations, business households and individuals that do not the above criteria must use e-invoices with the tax authority’s code through an e-invoice service provider, and are required to pay for the service under a contract signed between the parties.
Organisations using self-printed invoices, pre-printed invoices, e-invoices with or without a verification code, or which had purchased invoices from the Tax Authorities before the issuance date of the Decree, will be allowed to continue using such invoices until 30 June 2022.
From the issuance date of the Decree to 30 June 2022, where the Tax Authorities instruct organisations to transition to implement e-invoices in accordance with this Decree or Decree 119/2018/ND-CP, if the organisation cannot meet information technology infrastructure requirements for e-invoices and wish to continue using their current invoices, they must submit the invoice information in Form 03 (attached with the Decree) together with submission of VAT returns.
For organisations established during the period from the issuance date of the Decree to 30 June 2022, where the Tax Authorities instruct the implementation of e-invoicing according to the Decree, organisations should follow the instructions. If they cannot meet the information technology infrastructure requirements, they can use invoices in accordance with Decree 51/2010/ND-CP and Decree 04/2014/ND-CP but need to submit Form 03 as mentioned above.