1.1. Decree No. 123/2020/ND-CP and its Amendments:

Decree No. 123/2020/ND-CP is a pivotal legal document governing the issuance and management of invoices in Vietnam. It outlines the specific requirements and procedures that businesses must follow when creating, using, and storing invoices.

Key Provisions of Decree No. 123/2020/ND-CP:

  • Invoice Content: The decree specifies the mandatory information that must be included on invoices, such as invoice number, date, seller and buyer information, description of goods or services, quantity, price, and VAT amount.
  • Invoice Format: It establishes the format and layout requirements for invoices, including the use of pre-numbered invoices and the inclusion of authentication codes for electronic invoices.
  • Record Keeping: The decree mandates the retention of invoices for a specified period and outlines the storage requirements.
  • Tax Implications: It clarifies the tax implications of invoice printing, including the use of invoices for VAT reporting and tax deductions.
  • Electronic Invoices: The decree guides the implementation of electronic invoices, including the use of digital signatures and verification codes.

Amendments:

  • Updates and Clarifications: Decree No. 123/2020/ND-CP has been amended to incorporate updates and clarifications regarding invoice printing requirements.
  • Adaptability: The amendments aim to keep the regulations aligned with the evolving business landscape and technological advancements.

Understanding the provisions of Decree No. 123/2020/ND-CP and its amendments is crucial for businesses operating in Vietnam to ensure compliance with invoice printing regulations.

 

1.2. Penalties for Non-Compliance:

Failure to comply with invoice printing regulations in Vietnam can result in a range of penalties, including:

  • Fines: Businesses may be subject to financial penalties, which can vary in severity depending on the nature of the non-compliance.
  • Suspension of Business Activities: In serious cases, the tax authorities may suspend the business's operations until the non-compliance is rectified.
  • Legal Action: Persistent non-compliance can lead to legal action, including potential imprisonment for individuals involved in the violation.
  • Interest Charges: Businesses may be required to pay interest on any unpaid taxes or penalties.
  • Loss of Tax Benefits: Non-compliance may result in the loss of tax benefits or incentives.

It's important to note that the specific penalties for non-compliance may vary depending on the nature of the violation and the discretion of the tax authorities.

It's essential for businesses to familiarize themselves with the specific provisions of Decree No. 123/2020/ND-CP and any subsequent amendments to ensure compliance.

 

2. Types of Invoices Subject to Printing Requirements

 

2.1. Sales Invoices:

Definition:

  • Transaction Documentation: Sales invoices are legal documents issued by businesses to record the sale of goods or services.
  • Taxable Transactions: Sales invoices are typically subject to VAT and other applicable taxes.

Mandatory Information:

  • Seller's Details: The invoice must clearly state the seller's name, address, and tax identification number (TIN).
  • Buyer's Details: The buyer's name, address, and TIN (if applicable) must be included.
  • Description of Goods or Services: A detailed description of the goods or services sold, including quantity, unit price, and total amount.  
  • VAT Amount: The amount of VAT charged must be separately indicated.
  • Other Information: Other information may be required, such as the invoice number, date of issuance, and payment terms.

Electronic Invoices:

  • Mandatory Use: In many cases, electronic invoices are now mandatory for businesses in Vietnam.
  • Electronic Format: Sales invoices can be issued in electronic format, complying with the specified regulations.

 

2.2. Purchase Invoices:

Definition:

  • Supplier Transactions: Purchase invoices are issued by suppliers to businesses when they purchase goods or services.
  • Input Tax Credit: Purchase invoices are used by businesses to claim input tax credits, which can reduce the VAT payable on their sales.

Mandatory Information:

  • Supplier Details: The invoice must clearly state the supplier's name, address, and TIN.
  • Buyer Details: The buyer's name, address, and TIN must be included.
  • Description of Goods or Services: A detailed description of the goods or services purchased, including quantity, unit price, and total amount.
  • VAT Amount: The amount of VAT charged must be separately indicated.
  • Other Information: Other information may be required, such as the invoice number, date of issuance, and payment terms.

Electronic Invoices:

  • Mandatory Use: Purchase invoices may also be issued in electronic format, depending on the specific regulations and the type of business.

Businesses need to retain purchase invoices as they are used for VAT reporting and tax deductions.

 

2.3. Cash Receipts:

Definition:

  • Cash Payments: Cash receipts are documents issued by businesses to acknowledge receipt of cash payments from customers.
  • Supporting Documentation: While not always required, cash receipts can serve as supporting documentation for other transactions, such as sales invoices.

Printing Requirements:

  • Specific Regulations: The printing requirements for cash receipts may vary depending on the specific regulations in place.
  • Mandatory in Certain Cases: In some cases, businesses may be required to issue printed cash receipts, especially for transactions exceeding a certain threshold or for specific types of businesses.

Content:

  • Basic Information: Cash receipts typically include the date, amount received, and a description of the transaction.
  • Business Information: The business's name, address, and TIN may also be included.

Electronic Cash Receipts:

  • Allowed in Some Cases: Electronic cash receipts may be allowed under certain conditions, such as for online transactions or using point-of-sale (POS) systems.

 

2.4. Other Types of Invoices:

  • Specific Regulations: Regulations may specify other types of invoices that are subject to printing requirements, such as credit notes, debit notes, or correction invoices.

It's important to understand the specific types of invoices that are subject to printing requirements in Vietnam to ensure compliance.

 

3. Invoice Printing Requirements

Mandatory Information:

  • Invoice Number: Each invoice must have a unique invoice number.
  • Date of Issuance: The date the invoice is issued must be clearly stated.
  • Seller's Information: The seller's name, address, and tax identification number (TIN) must be included.
  • Buyer's Information: The buyer's name, address, and TIN (if applicable) must be included.
  • Description of Goods or Services: A clear and detailed description of the goods or services being sold or purchased.
  • Quantity and Price: The quantity of goods or services and the unit price must be specified.
  • Total Amount: The total amount payable, including VAT, must be clearly stated.
  • VAT Amount: The amount of VAT charged must be separately indicated.

Format and Layout:

  • Standard Format: Invoices must follow a standard format, which may be specified in regulations or guidelines.
  • Clarity and Readability: Invoices must be clear, legible, and easy to understand.

Pre-Numbered Invoices:

  • Sequential Numbering: Invoices may need to be pre-numbered sequentially to ensure proper tracking and accountability.
  • Electronic Numbering: Electronic invoices may use electronic numbering systems.

It's important to comply with the specific invoice printing requirements to avoid penalties and ensure accurate record keeping.

 

4. Electronic Invoice Printing

Mandatory E-invoicing:

Since July 2022, Vietnam has mandated the use of electronic invoices (e-invoices) for most businesses. This replaced the previous system of paper invoices.  

Regulations and Guidelines:

  • Decree 123/2020/ND-CP: This decree sets the legal framework for e-invoices in Vietnam.
  • Circular 78/2021/TT-BTC: This circular provides detailed guidance on implementing e-invoices, including registration procedures and error correction processes.  

Types of E-invoices:

  • With Verification Code: These e-invoices are used for tax declarations and are mandatory for high-risk businesses or those exceeding specified revenue thresholds.
  • Without Verification Code: These e-invoices are acceptable for specific sectors like e-commerce or transactions with tax authorities.

E-invoice Registration:

Businesses must register with the General Department of Taxation's website before using e-invoices.  

E-invoice Content:

  • Vietnamese Language: E-invoices must be primarily in Vietnamese, although additional languages can be included for reference.
  • Error Correction: Procedures are outlined for correcting errors in e-invoices depending on the nature of the mistake.  

Cancellation and Adjustments:

  • Cancellation: If a service is canceled, the seller must notify the tax authority and cancel the issued e-invoice.  
  • Adjustments: Minor errors in invoice symbols or numbers can be adjusted without cancellation or replacement.

Benefits of E-invoices:

  • Efficiency: E-invoices simplify the invoice process, reducing paperwork and streamlining reporting.  
  • Transparency: E-invoices enhance transparency and facilitate tax administration.  
  • Security: Digital signatures and verification codes ensure the authenticity and integrity of e-invoices.  

It's crucial for businesses operating in Vietnam to understand and comply with e-invoicing regulations to avoid penalties and ensure smooth tax compliance.

 

5. Record Keeping and Preservation

Retention Periods:

  • Legal Requirements: Vietnamese law mandates the retention of invoices for a specific period.
  • Timeframe: The exact retention period may vary depending on the type of invoice and the specific regulations.

Storage Requirements:

  • Organized Storage: Invoices must be stored in an organized and accessible manner.
  • Electronic Storage: Electronic invoices can be stored electronically, provided that they meet security and preservation requirements.
  • Paper Copies: In some cases, paper copies of invoices may also be required.

Auditing and Inspection:

  • Tax Audits: Businesses may be subject to tax audits, where tax authorities verify the accuracy of their financial records, including invoices.
  • Inspection Procedures: Tax authorities may inspect a business's premises to verify compliance with invoice printing and record-keeping regulations.

Best Practices:

  • Invoice Management System: Implement an efficient invoice management system to organize and track invoices.
  • Electronic Archiving: Consider using electronic archiving solutions to securely store and preserve invoices digitally.
  • Regular Reviews: Conduct regular reviews of your invoice records to ensure compliance with legal requirements and identify any potential issues.

By adhering to proper record-keeping and preservation practices, businesses can avoid penalties and demonstrate compliance with Vietnamese tax regulations.

 

6. Tax Implications

VAT Reporting:

  • Accurate VAT Calculation: Invoices are essential for accurate VAT reporting and calculation.
  • Input Tax Credits: Purchase invoices are used to claim input tax credits, which can reduce the VAT payable on sales.
  • Output Tax: Sales invoices are used to report output tax, which is the VAT collected from customers.

Tax Deductions:

  • Business Expenses: Invoices may be required to support tax deductions for business expenses.
  • Claiming Credits: Invoices can be used to claim tax credits or exemptions, if applicable.

Penalties for Non-Compliance:

  • Fines: Failure to comply with invoice printing regulations can result in fines imposed by tax authorities.
  • Interest Charges: Penalties may include interest charges on unpaid taxes.
  • Legal Action: In serious cases, non-compliance can lead to legal action.

It's important to comply with invoice printing regulations to ensure accurate tax reporting and avoid penalties.

 

7. Challenges and Best Practices

Common Challenges:

  • Complexity: The invoice printing regulations in Vietnam can be complex, making it difficult for businesses to ensure full compliance.
  • Technological Limitations: Some businesses may face technological limitations in implementing electronic invoice systems or maintaining accurate records.
  • Human Error: Human error can lead to mistakes in invoice preparation or record keeping.

Best Practices:

  • Clear Procedures: Establish clear procedures for invoice creation, approval, and storage.
  • Automated Systems: Implement automated invoice management systems to streamline processes and reduce errors.
  • Regular Reviews: Conduct regular reviews of your invoice records to ensure compliance and identify any potential issues.
  • Training: Provide training to employees on invoice printing regulations and best practices.
  • Professional Advice: Seek advice from a tax professional or accountant to ensure compliance and address any questions or concerns.

By addressing these challenges and following best practices, businesses can effectively manage invoice printing requirements and minimize the risk of penalties.

 

8. Conclusion

Invoice printing is a critical aspect of business operations in Vietnam. By understanding the legal framework, types of invoices subject to printing requirements, invoice printing procedures, record-keeping obligations, tax implications, and best practices, businesses can ensure compliance with Vietnamese regulations and avoid penalties. Implementing efficient invoice management systems and seeking professional advice can help streamline processes and minimize the risk of errors.
If you need further explanation on this subject, please don't hesitate to contact us through email at lienhe@luatminhkhue.vn or phone at: +84986 386 648—lawyer To Thi Phuong Dzung.