The Government has just issued Decree 123/2020/ND-CP regulating invoices and documents that will take effect from July 1, 2022.

The use of e-invoices is mandatory from July 1, 2022.

Abolishing regulation on mandatory application of e-invoices from November 1, 2020

Decree 123/2020/ND-CP abolishes Clauses 2 and 4, Article 35 of the Government Decree 119/2018/ND-CP on the mandatory application of e-invoices from November 1. According to Decree 123, the Government encourages agencies, organizations and individuals that satisfy the information technology infrastructure to apply the provisions on e-invoices and documents of this Decree before July 1.

Due to the effective date of Decree 123 on July 1, 2022, businesses and economic organizations that have notified the issuance of pre-printed invoices, self-printed invoices and e-invoices without the tax authority's code, or have registered for the application of e-invoices with the tax authority's code, or purchased invoices from the tax authority before the issuing date of this Decree, are still allowed to use these invoices until June 30, 2022, and carry out the procedures for invoices under Decree 51/2010/ND-CP and Decree No. 04/2014/ND-CP of the Government on invoices for selling goods and services.

From the issuing date of this Decree to June 30, 2022, if the Tax authority has requested the business establishment to use e-invoices, but the business establishment has not yet met the information technology infrastructure and continues to use paper invoice, the business establishment shall send invoice data to the tax authority according to the form enclosed with the value-added tax declaration.

The Tax Authority will build data on invoices of the business establishments to put into the invoice database and post them on the General Department of Taxation’s Portalfor the search of data on invoices.

For newly established business establishments,from the issuing date of decree to June 30, 2022, if the tax authority has requested the business establishments to apply e-invoices according to regulations in this Decree, the business establishments shall comply with the Tax authority’sguidance.

Ifthe business establishments have not yet met conditions for information technology infrastructure but still use paper invoices, they shall comply with provisions in the Government Decree 51 and 04.

How to manage and use e-invoices?

Decree 123/2020/ND-CP stipulates the management and use of invoices when selling goods and providing services; the management and use of vouchers when carrying out procedures on tax, fee and charge collection, and regulates the tasks, powers and responsibilities of agencies, organizations and individuals in the management and use of invoices and vouchers.

Specifically, Decree 123 stipulates the principles of making, managing and using invoices and vouchers. Accordingly, when selling goods or providing services, the seller must issue an invoice to the buyer (including goods or services used for promotion, advertising, or sample goods; goods, services used as gifts, donations, or goods used for exchange and salary payment for workers, except for goods used for internal circulation to continue the production process). The invoice must state the contents on invoice symbol, form, the standard data format of the tax authority.

In addition, when deducting personal income tax, collecting taxes, fees and charges, the collector must make tax deduction vouchers or tax, fee and charge receipts with full prescribed contents to provide the payer.

If the e-receipt is applied, it must be in the standard data format of the Tax authority. If individuals authorize tax finalization, personal income tax deduction vouchers are not issued.

For individuals who do not sign a labour contract, or sign a labour contract of less than three months, the employer may choose to issue a tax deduction voucher for each tax deduction, or issue a tax deduction voucher for multiple deductions for each tax calculation.

For individuals signing labour contracts for three months or more, the employer shall only issue to individuals one tax deduction voucher in a tax period.

The Decree specifies that when using invoices and receipts, enterprises, economic organizations, other organizations, business households and tax, fee and charge collectors must register for the use them with tax authority, or announce the issuance according to regulations. For pre-printed invoices and pre-printed receipts by the tax authority, the tax authority shall notify the issuance.

The Decree also stipulates that organizations, business households must report the use of invoices purchased from the Tax authority and the use of pre-printed receipts, self-printed receipts and receipts purchased from the tax authority.

Notably, the goods seller or the service provider as an enterprise, an economic institution or other institution which are authorized by a third party for making e-invoices for selling goods and providing services. That e-invoice must state the name of seller as the authorizing party. The authorization must be done in writing by the authorizing party and the authorized party and must present information on that e-invoice.

If the authorized e-invoice is the e-invoice without the Tax authority’s code, the authorizing party must send the e-invoice data to the Tax authority via service providers.