Tax Alert - Circular 68/2019/TT-BTC guiding the implementation on electronic invoice

On September 30th, 2019, the Ministry of Finance issued Circular 68/2019/TT-BTC ("Circular 68") guiding the implementation of Decree No. 119/2018 / ND-CP (Decree 119 ") on the electronic invoice (e-invoice) when selling goods and providing services with notable points as below:

This Circular will be effective from November 14th, 2019

Similar to Decree 119, during the transition period from the effective date of the Circular until the end of October 31st, 2020, enterprises which are not required to apply e-invoices in accordance with Decree 119 will still be allowed to use paper invoices and E-invoices under the guidance of Decree 04/2014/ND-CP, Decree 51/2010/ND-CP and their guidelines circulars.

In case the tax authority requests the enterprise to apply e-invoices under the guidance of Decree 119, the enterprise must destroy all paper invoices and e-invoices that are implemented under the previous regulations and implement new e-invoice in compliance with Decree 119 and Circular 68.

The guidance on contents of e-invoices have been changed as follows:

  • The principle to create e-invoice’s Form, Serial number shall be more simple and easier to distinguish among the types of e-invoices;
  • Unlike the previous regulations, the buyer’s digital signature is not compulsory and will depend on the technical conditions and the agreement between the seller and the buyer;
  • The issuance date of an e-invoice shall be the date on which the digital or electronic signature is added and presented on the invoice;

E-invoice

Instead of using Commercial invoices, enterprises must issue e-invoice (i.e. VAT invoice or sales invoices) for export of goods and services under the guidance of Circular 68. Regarding the exporting of goods, the e-invoice shall be issued after the completion of customs procedures.

Tax risks 

Sellers of goods and services who are classified as having high tax risks must implement authenticated e-invoices, regardless of the transaction value. The Circular also sets out the criteria to identify enterprises with high tax risks;

Supplement cases 

Supplement cases where the tax authority shall issue separate invoices for enterprises, business organizations, business households or business individuals applying VAT direct method as below:

  • The tax payer undergoing tax code closure procedures, however, need to issue invoice for assets liquidation;
  • The tax payer under dormant period, however, need to issue invoice for the contract signed before dormancy;
  • The tax payer banned from using electronic invoices by the tax authority as an enforcement method.

In case e-invoices contain errors, the correction process shall be as follows:

  • If the buyer’s name or address is not correct, however the tax code and other information is correct, the seller shall inform the buyer of the errors and send a notice to the tax authority in the template of Form No. 04 in Decree No. 119/2018/ND-CP (“Form 04”). In this case, re-issuance of invoice is not required;
  • If the tax code, invoice amount, tax rate, tax amount or description of goods/services on the invoice is not correct, the seller and the buyer shall prepare a minutes specifying the errors; the seller shall send a notice to the tax authority, i.e. Form No. 04, and issue a new e-invoice in replacement of the incorrect one;
  • In case the tax authority discovers that an e-invoice contains error, a notice shall be sent to the seller (Form No. 05 in the Appendix to Decree No. 119/2018/ND-CP) and the seller will carry out the above-mentioned correction process within an allowable timeframe;

Transmission of electronic invoice data to tax authorities will be conducted as follows:

  • Taxpayers shall transmit data of the issued e-invoices to tax authorities directly (if technical conditions are met) or via a qualified service provider;
  • In case the enterprises issue a large number of invoice, such as enterprises operating in the industries of postal and telecommunications, insurance, finance and banking, air transport, sale of petro to individuals, the data transmission will be carried out together with the submission of VAT declaration, using a summary list of sold good/services. In other cases, the e-invoices shall be sent to both the buyer and tax authority upon issuance.

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