I. Regulations on cases where VAT invoices are required
1. Cases where VAT invoices are required
➤ According to Article 4 of Decree 123/2020/ND-CP, there are regulations on invoices and documents as follows:
When selling goods or providing services, organizations and individuals must issue invoices to deliver to buyers, including goods and services used for promotion, advertising, samples; used for giving, presenting, exchanging, paying in lieu of salary for employees and internal consumption (except for goods circulated internally to continue production); exporting goods in the form of loans, borrowing or repayment and must fully record the content according to Article 10 of this Decree. In case of using electronic invoices, it must comply with the provisions of Article 12 of this Decree.
➤ According to Article 9 of Decree No. 123/2020/ND-CP regulating the time of invoice issuance, accordingly:
- The time of invoice issuance is the time of transfer of ownership or right to use goods or completion of service provision regardless of whether money has been collected or not;
- In case of collecting money before or during service provision, the time of invoice issuance is the time of collection (excluding cases of deposit or advance payment);
- In case of delivery or handover of each item, stage, or service, an invoice must be issued for each delivery or handover for the corresponding goods and services.
For example : On December 22, 2021, company DEF ships goods out of the warehouse to sell to customers, then company DEF must issue an invoice that day, regardless of whether company DEF has received the money or not.
➤ Circular 39/2014/TT-BTC also stipulates as follows:
“When the facility receives the import consignment, if VAT has been paid at the import stage, it shall issue a VAT invoice for the facility to import consignment as a basis for declaring and deducting input VAT for the imported consignment goods. In case the facility receives the import consignment but has not paid VAT at the import stage, when returning the imported consignment goods, the facility shall issue an internal warehouse delivery and transportation note with an internal transfer order as prescribed as a document for goods circulation on the market. After paying VAT at the import stage for the imported consignment goods, the facility shall issue an invoice as prescribed above.
In case of entrusted export of goods, when exporting goods to the entrusted establishment, the establishment with the entrusted export goods shall use the internal delivery and transportation note with the internal transfer order. When the goods have been actually exported with confirmation from the customs authority, the establishment with the entrusted export goods shall issue a VAT invoice for tax declaration, VAT refund or sales invoice.
See also:
How to calculate import tax;
How to calculate export tax;
How to issue gift invoices to employees.
2. Regulations on penalties for selling goods without issuing VAT invoices
➤ According to Article 24 of Decree 125/2020/ND-CP on administrative sanctions for violations of invoices, it is stipulated as follows:
- Fines from 500,000 VND to 1,500,000 VND for the following cases:
- Not making a consolidated invoice according to regulations on invoices for selling goods and services;
- Do not issue invoices for goods and services used for promotions, advertising, samples; for giving, donating, exchanging, or paying in lieu of salary to employees, except for goods circulated or consumed internally to continue the production process.
- Fines from VND 10,000,000 to VND 20,000,000 for not issuing invoices when selling goods and services to buyers as prescribed.
➤ According to Article 17 of Decree 125/2020/ND-CP, which stipulates penalties for tax evasion, specifically:
Failure to issue invoices when selling goods or services and being discovered after the deadline for submitting tax declarations:
- A fine of 1.5 times the amount of tax evasion shall be imposed on taxpayers who commit violations without aggravating or mitigating circumstances;
- A fine of twice the amount of tax evasion shall be imposed on a taxpayer who commits one of the prescribed acts with one aggravating circumstance;
- A fine of 2.5 times the amount of tax evasion shall be imposed on a taxpayer who commits one of the prescribed acts with two aggravating circumstances;
- A fine of three times the amount of tax evaded shall be imposed on taxpayers who commit violations with three or more aggravating circumstances.
>> Conclusion : Accordingly, selling goods and providing services without issuing invoices will be punished as follows:
- Administrative penalties for violations of invoices with a maximum fine of VND 20,000,000;
- If tax authorities detect tax evasion or fraud, they will be administratively sanctioned with fines calculated based on the number of times the amount of tax evaded or fraudulently paid;
- Remedial measures: Force to issue invoices according to regulations and pay the full amount of tax evasion to the state budget for violations according to the above regulations.
Reference: Viettel and Easyinvoice electronic invoice services.
II. Regulations on cases where VAT invoices are not required
Invoicing is one of the mandatory things in business. However, there are still some exceptions, where it is not necessary to issue invoices. Specific cases are classified as follows:
➤ Cases according to the provisions of Circular 219/2013/TT-BTC:
Organizations or individuals receiving compensation in cash, support money, bonuses, emission right transfer money and other financial revenues are not required to declare and pay VAT.
➤ Cases as prescribed in Circular 39/2014/TT-BTC:
When selling goods or services with a total value of less than VND 200,000, the enterprise does not have to issue an invoice, unless the buyer requests an invoice to be issued and delivered. However, at the end of each day, the enterprise still issues a VAT invoice or a sales invoice stating the total amount for all goods and services sold during the day.
➤ Cases as prescribed in Circular 119/2014/TT-BTC:
In cases where a business entity produces or constructs fixed assets to serve business activities subject to VAT, upon completion, acceptance or handover, it is not necessary to issue an invoice.
In cases of exporting machinery, equipment, materials, and goods in the form of loans, borrowings, or returns, if there are complete contracts and related documents, the business unit does not have to issue invoices, calculate, and pay VAT.
➤ Cases as prescribed in Circular 26/2015/TT-BTC:
If you export goods for internal circulation or consumption to continue the production and business process, you do not need to issue an invoice and do not have to pay VAT.
For example : ABC Company specializes in manufacturing all kinds of leather shoes. After the shoe sole production stage, the company moves on to the next production stage to complete the product. In this case, ABC Company does not have to issue an invoice.
In addition, in case of exporting goods consigned to agents, invoices are not required.
See more: Subjects not required to declare and pay VAT.
III. Some questions about VAT invoice issuance and non-issuance
1. When selling goods or services worth VND 200,000 or more, if the buyer does not take an invoice or does not provide his/her name, address, or tax code, does the seller have to issue an invoice?
The seller must still issue an invoice and clearly state “the buyer did not take the invoice” or “the buyer did not provide name, address, tax code.
2. What should be done if an error is discovered in an invoice?
According to Decree 123/2020/ND-CP, sellers can choose to notify the adjustment of each invoice or multiple invoices for electronic invoices that have been issued with errors that require re-issuance of codes or need to be processed in the form of adjustment or replacement. The notification must be sent to the tax authority no later than the last day of the VAT declaration period in which the adjusted invoice was generated. After adjustment or replacement, if the error continues for the next time, it will be handled as the first error.
See more: How to handle incorrectly written electronic invoices .
3. In cases where goods and services are used for promotions, gifts, presents, or as payment in lieu of salary for employees or for internal consumption, is it necessary to issue an invoice? What should be written on the invoice?
According to Decree 123/2020/ND-CP, VAT invoices must be issued in all of the above cases.
For goods used for promotion, giving, gifting, exchanging, paying in lieu of salary for employees, internal consumption, the invoice must fully state the contents and calculate VAT as a normal invoice. Clearly state the contents of the goods used for promotion, giving, gifting, etc.
4. In case of making a sales invoice but there are many items, can a list be attached?
According to Decree No. 119/2018/ND-CP, electronic invoices are not allowed to use attached lists. Therefore, when issuing invoices, all items to be sold will be fully recorded on the electronic invoice software without being limited to the number of product lines.