Penalty level – Invoice issuance at the wrong time – according to Circular 78

Regulations on invoice issuance time. Will there be a penalty for issuing invoices at the wrong time? The penalty for issuing invoices at the wrong time is according to Circular 78 and the latest Decree 123.

I. Regulations on invoice issuance time according to Circular 78 and Decree 123

The time of invoice creation or invoice issuance is specifically regulated in Decree 123/2020/ND-CP and Circular 78/2021/TT-BTC as follows:

• The time of invoice issuance for a selling enterprise is the time of transfer of ownership and right to use goods to the customer, regardless of whether the payment has been received or not. Accordingly, the date of invoice issuance is the date of transfer of goods to the buyer;
• The date of invoice issuance for service provision is the date of completion of service provision, regardless of whether payment has been collected or not. In case the service provider collects payment before or during service provision, the date of invoice issuance is the date of payment collection. Accordingly, the date of invoice issuance is the date of completion of service or the date of payment collection;
• The time to issue an invoice for construction and installation activities is the time when the unit accepts and hands over the project, project items, and construction volume; the time when the construction and installation are completed, regardless of whether the payment has been collected or not;
• In case of selling goods delivered in multiple times or providing services delivered in each item or stage, each time of delivery or progress handover, the enterprise must issue an electronic invoice for the volume and value of the goods and services delivered accordingly. Accordingly, the invoice issuance date is the date of acceptance and handover;
• In case of real estate business, infrastructure construction, house construction for sale or transfer with payment collection according to project progress or payment collection progress, the time of invoice issuance is the payment collection date or according to the payment agreement stated in the contract;
• The time of invoice issuance for the provision of electricity, domestic water, telecommunications services, television, etc. is the date of completion of reconciliation between the supplier and the customer, no later than 7 days from the end date of the agreed period;
• The time of invoice issuance for exported goods and services is the date of confirmation of completion of customs procedures on the customs declaration, the date of completion of services according to the contract liquidation minutes;
• In case of retail stores selling gasoline to regular buyers who are business organizations or individuals, the time of invoice issuance is the time of completion of each sale of gasoline;
• Some other cases are specifically regulated in Clause 4, Article 9 of Decree 123/2020/ND-CP.

>> See more: Regulations on the time of issuing electronic sales invoices according to Decree 123.

II. Regulations for handling cases of issuing invoices at the wrong time

Issuing invoices at the wrong time will affect the tax declaration and value added tax deduction of the enterprise. Handle input invoices issued at the wrong time to ensure compliance with legal regulations and protect the interests of the enterprise.

1. Can input VAT be deducted if an invoice is issued at the wrong time?

Pursuant to Official Dispatch 74116/CT-TTHT of Hanoi Tax Department dated December 2, 2016:

“In the case where a company provides services to customers and has completed them since 2014 but does not issue invoices in 2014 but issues them in 2015, recording service revenue in 2015 is not in accordance with regulations.”

In this case, the buyer and seller will be handled as follows:

• The seller will be subject to administrative penalties for tax violations and penalties for issuing invoices at the wrong time according to the provisions of Circular No. 10/2014/TT-BTC;
• For the buyer, if the purchase of goods and services is true, has full invoices and documents and meets the conditions specified in Clause 8, Article 14 of Circular 219/2013/TT-BTC, input VAT can be deducted.

2. Is issuing invoices at the wrong time included in deductible expenses?

Pursuant to Official Dispatch 2731/TCT-CS of the General Department of Taxation dated June 20, 2016 sent to the Tax Department of Ha Nam province, the following example was given regarding the issue of invoices at the wrong time:

“In the case of KMW Vietnam Co., Ltd. purchasing raw materials from the seller in January 2016 for production purposes, the seller did not issue an invoice upon delivery in January 2016 but instead issued an invoice in February 2016.”

If the company has complete documents including: quotation, contract and minutes confirming the delivery of goods in January 2016, it is recommended that the Ha Nam Provincial Tax Department inspect the actual purchase and sale of goods of the company. At the same time, instruct the company to calculate deductible expenses when determining taxable income for the above invoices issued at the wrong time if they meet the prescribed conditions and impose administrative sanctions for the seller’s act of issuing invoices at the wrong time.

In this case, the buyer and seller will be handled as follows:

• Buyer: Invoices issued at the wrong time will be included in deductible expenses when calculating corporate income tax and declaring input value-added tax deduction, provided that the purchase and sale activities are true to reality; there are complete invoices and payment documents; the seller has fully declared and paid taxes;
• Seller: Will be administratively sanctioned for issuing invoices at the wrong time.

See also: 

>> Regulations on issuing and not issuing VAT invoices;

>> Cases where invoices must be issued and where invoices are not required;

>> Instructions for correcting incorrectly written electronic invoices.

III. Penalty for issuing invoices at the wrong time

Pursuant to Article 24 of Decree No. 125/2020/ND-CP, penalties for issuing electronic invoices at the wrong time are as follows:

Questions about regulations on penalties for issuing invoices at the wrong time