Circular No. 78/2021/TT-BTC (“Circular”) takes effect from 01 July 2022. However, the State is currently encouraging agencies, organizations and individuals to update their applications as regulations on electronic invoices and documents are changing according to the Circular before 01 July 2022. Particularly, SMEs, cooperatives, household businesses, and individuals who don’t transact with tax authorities by electronic means, or do not have adequate digital infrastructure to make and transmit e-invoice data to the buyer and to the tax authorities must purchase invoices from the tax authority as prescribed in Article 23 of Decree 123/2020/ND-CP. Here are the latest changes to Electronic invoicing (“E-invoice”) system made by the Circular.
Previously, in ‘Decree No. 119/2018/ND-CP’ and ‘Circular No. 68/2019/TT-BTC’, there were no regulations on authorization to make e-invoices. Therefore, authorization of e-invoicing is one of the highlights of the Circular. Accordingly, sellers of goods and providers of services are entitled to authorize a third party (a party that has an affiliated relationship with the seller, is eligible to use e-invoices and is not in discontinuance) to make e-invoices for the sale of goods and services. The authorized e-invoice must show the name, address and tax identification number of the authorizing party and the name, address and tax identification number of the authorized party and must be true to the actual arising. The authorization must be made in writing (contract or agreement) between the two parties and must fully show the information as prescribed in Article 3 of the Circular. The authorizing party and the authorized party must notify the tax authority in accordance with regulations as authorization determines the changes to information provided to register for using e-invoices.
The management of e-invoices by tax authorities has changed significantly after the Circular with the introduction of new rules as follows:
Note: The declaration supplemented with the application for e-invoice adjustment and replacement (including e-invoice cancellation) shall comply with the law on tax administration.
Enterprises that are using e-invoices without the tax authority’s code, can apply for inclusion of tax authority’s code on the e-invoices according to regulations.
In addition, enterprises that are eligible to use e-invoices without a code as prescribed in Clause 2, Article 91 of the ‘Law on Tax Administration’, and identified with high tax risks as prescribed in ‘Circular No. 31/2021/ TT-BTC’ dated May 17, 2021 of the Ministry of Finance, if notified by the tax authority to apply for e-invoice with the tax authority’s code, must apply for the e-invoice with the tax authority’s code within ten (10) working days from the date of such notice. Twelve months after switching to e-invoices with the tax authority’s code, if the enterprise wishes to use e-invoices without the code, the taxpayer shall make the changes to the e-invoice as per the provisions of ‘Clause 2, Article 91’ of the ‘Law on Tax Administration’ and ‘Circular No. 31/2021/TT-BTC’ for consideration and approval.
This Circular will take effect from 01 July 2022. However, state agencies encourage enterprises that have been using e-invoices, especially newly established enterprises, to update their e-invoicing system as per the guidelines issued in this Circular before June 30, 2022. Hence, businesses should follow the rules of the new Circular and update their e-invoicing accordingly.
The article is based on applicable law at the time noted as above and may no longer be appropriate at the time the reader approaches this article as the applicable law has changed and the specific case that the reader wishes to apply. Therefore, the article is only for reference.