Learn about regulations on electronic invoices for business households – Circular 78; subjects using electronic invoices & how to register to use electronic invoices for business households.
According to Decree 123 and Circular 78 on electronic invoices, from July 1, 2022, business households and individuals doing business using the declaration method are required to switch from paper invoices to using electronic invoices. To ensure proper performance of obligations as well as correct understanding of new regulations on electronic invoices, business entities need to grasp the important information below, avoiding unnecessary administrative violations.
I. Legal basis
- Decree No. 123/2020/ND-CP issued by the Government on October 19, 2020;
- Circular No. 78/2021/TT-BTC was issued by the Ministry of Finance on September 17, 2021;
- Circular No. 40/2021/TT-BTC was issued by the Ministry of Finance on June 1, 2021.
II. What is an electronic invoice?
An electronic invoice is an invoice created, created, processed and stored on the electronic media system of an organization or individual selling goods and providing services in accordance with the provisions of law on accounting, tax, and electronic transactions.
Electronic invoices include the following types:
- Invoice with tax authority code: Applicable to most businesses, organizations, and regular business households;
- Invoices without tax authority codes: Applicable to businesses and organizations operating in the fields of electricity, petroleum, post and telecommunications, clean water, credit finance, insurance, healthcare, e-commerce, supermarkets, air, road, rail, sea, waterway transport, etc.;
- Invoices with codes are generated from cash registers that are connected to transfer data to tax authorities and are applicable to businesses and business households that pay taxes according to the method of declaring business activities in areas directly related to consumers such as:
- Food and beverage business group, restaurants, hotels;
- Retail goods group: shopping malls, supermarkets, consumer goods retail;
- Pharmaceutical retail group;
- Other service groups such as entertainment, bridge and road tickets, bus tickets, tourist tickets;
- Gold and silver trading group.
>> See details: What is an electronic invoice?
III. Regulations on business households using electronic invoices
1. Subjects required to use electronic invoices
Pursuant to Article 6 of Circular 78/2021/TT-BTC, there are 3 cases where business households and individual businesses are required to use electronic invoices:
- Business households and business individuals shall declare taxes according to the declaration method;
- Business households declaring taxes under the lump-sum method use electronic invoices if requested;
- Business households declare taxes each time they generate an income using electronic invoices if required.
Note:
For cases 2 and 3 above, if the business household needs to use electronic invoices, the tax authority will issue individual electronic invoices for each occurrence.
2. Subjects not required to use electronic invoices
Business households that do not need to apply electronic invoices but are still allowed to use paper invoices from tax authorities are business households operating in areas with difficult or extremely difficult socio-economic conditions, without information technology infrastructure, without accounting software and electronic invoice software, and not conducting transactions with tax authorities by electronic means.
The permitted time to use paper invoices for the above-mentioned business households is stipulated in Clause 2, Article 11 of Circular 78/2021/TT-BTC and Clause 1, Article 14 of Decree No. 123/2020/ND-CP, specifically as follows:
- For business households and individual businesses operating before July 1, 2022: Paper invoices can be used once every 12 months from July 1, 2022;
- For newly established business households and individuals from July 1, 2022: Paper invoices can be used within 12 months from the date of invoice registration.
>> See details: Subjects using electronic invoices.
IV. Procedures for registering to use electronic invoices for individual business households
1. For business households declaring tax according to the declaration method
Case 1: For business households operating in areas with difficult and extremely difficult conditions
Pursuant to Clause 1, Article 14 of Decree No. 123/2020/ND-CP, business households in this case using electronic invoices with tax authority codes do not have to pay service fees.
Business entities access the General Department of Taxation’s electronic information portal at https://hoadondientu.gdt.gov.vn/ to register to use electronic invoices and issue invoices directly.
Note:
Business households in this case need to contact the tax authority directly for specific instructions.
Case 2: For other businesses
Business entities register to use electronic invoices according to the following steps:
➤ Step 1: Business households proactively contact suppliers to purchase electronic invoice software and digital signatures, then access the software to submit an electronic invoice registration to the tax authority according to form 01/DKTĐ-HĐĐT.
➤ Step 2: Wait for the tax authority to process the business household’s request to register for using electronic invoices.
Within 1 working day (from the date of receiving the request for registration to use electronic invoices), the tax authority is responsible for sending a notice of acceptance or non-acceptance of the unit’s registration to use electronic invoices:
- In case the tax authority sends a notice of acceptance: The unit accesses the software to issue invoices when selling goods and providing services to customers, periodically at the end of the month/quarter, summarizes the revenue issued in the quarter to declare and pay taxes;
- In case the tax authority sends a notice of non-acceptance: The implementing unit shall supplement and adjust the registration content according to the notice of the tax authority and re-register from the beginning.
2. For business households declaring tax by lump sum method or by each occurrence
2.1. Agency receiving application for electronic invoice issuance
- Enterprises with fixed business locations: Submit application directly to the Tax Department at the place where business activities are carried out;
- Business households without a fixed business location: Submit application directly to the Tax Department of the place of residence or business registration.
Note: The information on the ID card/CCCD/passport of the invoice recipient must match the information on the application for electronic invoice issuance.
2.2. Electronic invoice issuance process
➤ Step 1: Taxpayers submit a request for an electronic invoice with a code issued by the tax authority for each occurrence according to form No. 06/DN-PSDT – Appendix IA issued with Decree 123/2020/ND-CP.
➤ Step 2: Taxpayers proceed to:
- Declare and pay taxes according to form No. 01/CNKD – tax declaration for business households and business individuals;
- Present the original and copies of the following documents for comparison with the tax authorities, including:
- Economic contracts for the provision of goods and services;
- Minutes of acceptance and contract liquidation;
- Documents proving the origin of goods;
- Documents proving if the goods are self-produced…
➤ Step 3: Wait for the tax authority to return the results
- After accepting the application for electronic invoice issuance for each occurrence, the tax authority will send the file code and login account information to the taxpayer’s email;
- Taxpayers log in to the General Department of Taxation’s electronic information portal: hoadondientu.gdt.gov.vn to create electronic invoices.
V. Frequently asked questions when registering for electronic invoices for individual business households
1. When do businesses stop using electronic invoices?
According to Clause 1, Article 16, Decree 123/2020/ND-CP, business households stop using electronic invoices in the following cases:
- Termination of tax code;
- In case the tax authority confirms that there is no operation at the registered address;
- Notice of temporary suspension of business to competent authorities;
- Being requested by the tax authority to enforce tax debt collection;
- Being detected by competent authorities for using electronic invoices to sell smuggled goods, prohibited goods, counterfeit goods, and goods that infringe intellectual property rights;
- Being discovered by competent authorities for the act of creating electronic invoices for the purpose of short-selling goods and services to appropriate money from individuals and organizations.
2. Can individual business households issue value added tax (VAT) invoices?
According to current regulations, business households will not be allowed to issue value-added invoices but can only issue sales invoices according to the form below:
In case business households want to issue value-added invoices, they must convert to a business model, complying with current legal regulations on VAT invoices.
>> Learn more: Procedures for converting a business household into a company.