If companies issue invoicing improperly, they can face administrative sanctions.
Buyer use value-added invoices (VAT) to prove their right to use, own goods and services, or be compensated for damages or used to account for the purchase and sale of goods and services of both parties. Incorrect invoicing can cause damage not only to the buyer but also to the seller.
In addition, with the current regulations, companies are required to convert and use E-invoices, so it is necessary for companies to understand the following relevant matters:
1. The principle of VAT invoicing
When selling goods or providing services, sellers must make invoices and provide them to buyers (including cases of goods and services used for promotion, advertising, sample goods; goods and services used to give, exchange, pay in lieu of wages to employees and internal consumption (except goods circulating internally to continue the production process), export goods in the form of loans, loans or repayment of goods) and the contents on the invoice must be in accordance with the arising economic operations and must be filled with information as prescribed.
Invoices are made in continuous order from small numbers to big ones with the same invoice symbol and template.
In case a company has multiple business locations that simultaneously use the same type of e-invoice with the same symbol by random retrieval method from an electronic invoicing system, the invoice shall be made in the relevant order from small to big number according to the time the seller electronically sign the invoice.
2. How to fill in some specific contents on the E-invoice
When invoicing E-invoice
The invoice date is the time of transfer of ownership or right to use the goods to the buyer or the date of completion of the provision of services, regardless of whether payment has been made or not. If the payment is made before or while providing services, the invoice date is the payment date. It should also be noted that the time of invoicing must be displayed in the day, month, and year with the format of the calendar year.
The above are general provisions on the time of invoicing, depending on each specific case; there will be different invoicing deadlines.
Companies that invoice at the wrong time may be subject to a warning if this behavior does not lead to a delay in performing tax obligations and has mitigating circumstances, or a fine between 4 -8 million VND.
Name, address, tax code of the buyer
A buyer’s tax code can be filled out or left blank, depending on whether the buyer has a tax code in Vietnam or not.
When selling goods or providing services of VND 200,000 or more, and if the buyer does not take the invoice or does not provide the name, address, tax code (if any), the seller must still issue an invoice and clearly state that “the buyer does not take the invoice” or “the buyer does not provide the name, address, tax code”.
Name of goods, services, unit of calculation, quantity, unit price, payment price
The name of goods and services must be expressed in the Vietnamese language. If it is necessary to add foreign characters, they will be placed on the right in () or just below the Vietnamese contents and has a font size smaller than the Vietnamese one. In addition, it should also be noted that, depending on the type of goods and services, there will be different requirements being recorded in the invoice, for example, catering services; goods must register the right to use, ownership, etc.
For the unit of calculation, the seller bases on the nature and characteristics of the goods to determine their unit’s name – it is the unit of measurement, for services, the unit of calculation is determined according to each providing time and its scope.
The quantity of goods and services must be indicated in Arabic numerals based on their unit. For specific goods and services such as electricity, water, telecommunications services, information technology services, television services, etc. the invoice must state clearly the period of provision of such goods and services.
Regarding the unit price of goods for services, the seller writes the unit price in its units. In case the quantity of goods and services is stated in an attached list with the invoice, there is not necessarily a unit price on the invoice.
How to write the Value Added Tax rate
The VAT rate shown on the e-invoice is the one corresponding to each type of goods and services by the law on VAT.
Some following cases need to be noted:
- For goods and services that are not subject to or exempt from VAT, the company only needs to record the selling price row as the payment price and can leave the tax rate, and the VAT amount blank.
- For goods and services used for promotion, the invoice must clearly state that they are promotional goods, advertisements, and samples.
- For goods and services given, donated, exchanged, paid in lieu of wages to employees and internal consumers, the invoices shall fully fill in all the contents and calculate VAT such as normal cases
- For goods and services subject to commercial discounting, the invoice stating the discounted selling price, VAT, the total payment price has VAT.
The seller’s signature, buyer’s signature
- In case the seller is a company or organization, its digital signature will be used to sign the invoice.
- In case the seller is an individual, the digital signature of the individual or authorized person shall be used.
The currency indicated on the invoice
The total amount stated on the invoice is expressed in Vietnamese dong in Arabic numerals and in Vietnamese characters.
In case payment is made in foreign currency, the total amount of payment shall be recorded in the original currency along with a value description recorded in Vietnamese. For example, 10,000 USD (ten thousand US dollars).
The company simultaneously writes on the invoice the foreign currency exchange rate with Vietnamese Dong according to the average transaction rate of the interbank foreign currency market announced by the State Bank of Vietnam at the time of invoicing. In case the said foreign currency does not have an exchange rate with Vietnamese dong, it shall cross-exchange rate with a foreign currency announced by the State Bank of Vietnam.
Companies must properly and fully record the required criteria mentioned above. In case of insufficient recording, companies may be fined with warnings if these contents do not affect the determination of tax obligations and have mitigating circumstances, or may be fined up to VND 8 million.
3. Instructions on how to issue electronic invoices
The basic process of issuing e-invoices on the software system of the e-invoice service provider
- Step 1: Log in to the service provider’s software system.
- Step 2: Proceed to make a new invoice and fill in the information of the invoice in the corresponding field.
- Step 3: After filling in the necessary information correctly, click “Sign” to sign the invoice (Note: E-Token will be requested for the signing).
- Step 4: After successfully signing the e-invoice that has been issued, it will be automatically sent to the tax department to apply for a code. Companies should check the status of the newly signed invoice to see if it has been issued a code by the tax authority to avoid related risks. Besides, it should also be noted that the e-invoice after being issued the code will only be automatically sent to the buyer’s email address in case the relevant information has been filled in when invoicing. In case this information is vacant, the seller must pay attention to provide invoices to the buyer by regulations.
4. Handling of incorrect invoices
It is divided into the 3 basic scenarios below:
- Scenario 1: The seller himself discovers that the incorrect e-invoice has been issued with the code of tax department but has not been yet sent it to the buyer.
Solution: Cancel the said invoice and issue a new alternative invoice.
- Scenario 2: Errors in buyer’s name and address, but other contents are correct
Solution: Notify the errors to the buyer and tax department; do not have to issue a new invoice. However, a record of invoice adjustment will be requested in this case.
- Scenario 3: Incorrect tax code, invoice amount, tax rate, tax amount or goods and quality, etc.
The seller and the buyer agree with each other to choose 1 of 2 solutions as follows:
- Make an adjusted invoice for the erroneous one; or
- Make new alternative e-invoice.
Enterprises need to understand the principles of invoicing, and how to write criteria on invoices in accordance with regulations to avoid violations in the field of management and use of invoices.