In the light of the Circular No. 78/2021/TT-BTC (“Circular”) taking effect from the 1st of July, 2022, the State currently encourages agencies, organizations and individuals to update their applications as regulations on electronic invoices and documents are change to follow the Circular before the 1st July 2022.  Particularly, SMEs, cooperatives, household businesses, and individuals who do not transact with tax authorities by electronic means, or do not have adequate digital infrastructure to generate and/or 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.

1. Carry out the mandate to set up the E-invoice

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.

2. Errors in e-invoices sent to tax authorities

The management of e-invoices by tax authorities has changed significantly after the Circular with the introduction of new rules as follows:

  • In case the e-invoice has errors, the tax authority’s code must be re-issued, or if the e-invoice has errors that need to be adjusted or replaced, the seller can notify such adjustment for each invoice with errors or notify the adjustment of multiple incorrect e-invoices to the tax authorities by no later than the last day of the value-added tax declaration period in which the adjusted e-invoice arises.
  • In case the invoice issued by seller while collecting money before or while providing the service is terminated or cancelled, the seller shall cancel such e-invoice and notify the tax authority about the cancellation of the invoice.
  • In case the e- invoice has errors and the seller adjusted or replacement, but the invoice continues to have errors, the seller shall follow the same method previously used for rectification.
  • If the value on the e-invoice has errors, it is necessary to adjust by increasing (”+”) or decreasing the value (“-”) in accordance with the actual adjustment.

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.

3. Convert to apply e-invoice with tax authority’s code

Enterprises that are using e-invoices without the tax authority’s code can apply for the 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 signed by  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.

4. Forward processing of e-invoices announced before the date of issuance of this Circular

  • Enterprises that have announced the issuance of ordered invoices, or self-printed e-invoices without codes, or have applied for e-invoices with tax authorities’ codes, or purchased invoices from tax authorities in advance until the date on which this Circular was promulgated may continue to use the invoices in the same form until June 30, 2022 and carry out the invoice procedures as prescribed in the ‘Decision: No. 51/2010/ND-CP’ (dated May 14th, 2010) and ‘No. 04/2014/ND-CP’ (dated January 17th, 2014) of the government.
  • Enterprises established on or after the date this Circular is promulgated until June 30th, 2022, in case the tax authorities notify the enterprise to issue e-invoices according to the provisions of ‘Decree No. 123 /2020/ND-CP’, ‘Decree No. 119/2018/ND-CP’ (dated September 12th, 2018), and ‘Circular No. 68/2019/TT-BTC’, companies shall comply with such notification from the tax office.
  • The use of personal income tax withholding vouchers shall continue to comply with ‘Circular No. 37/2010/TT-BTC’ (dated March 18th, 2010) of the Ministry of Finance (and amendments and supplements) and ‘Decision No. 102/2008/QD-BTC’ (dated November 11th, 2008) of the Ministry of Finance until the end on June 30th, 2022.

This Circular will take effect from 1st 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 30th, 2022. Hence, businesses should follow the rules of the new Circular and update their e-invoicing accordingly. 

The article is based on laws applicable at the time noted as above and may no longer be appropriate at the time the reader approaches this article as the applicable laws and the specific cases that the reader may wish to apply may have changed. Therefore, the article is for referencing only.


Get in touch with us today and our team would handle your corporate matters with expertise.

This field is for validation purposes and should be left unchanged.