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37 Frequently Asked Questions about Tax Administration Law No. 38 – Latest.

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Through this article, fdiinvietnam.com will specifically answer frequently asked questions about Tax Administration Law No. 38, which is being applied on a trial basis in Hanoi, Ho Chi Minh City, Hai Phong and Quang Ninh.

 

Question 1: Decree 119/2018/ND-CP dated September 12, 2018 stipulates the deadline is from November 1, 2020, but Tax Administration Law No. 38/QH14/2019 stipulates from July 1, 2022. So will the time to apply e-invoices be moved to July 1, 2022? Is it currently mandatory to apply the regulations on e-invoices according to Decree 119/2018/ND-CP? (Mr. Vo Dung)

>> Answer: 

Law on Tax Administration No. 38/QH14/2019 on the application of electronic invoices and documents takes effect from July 1, 2022; agencies, organizations and individuals are encouraged to apply the provisions on electronic invoices and documents of this Law before July 1, 2022.

Decree No. 119/2018/ND-CP dated September 12, 2018 of the Government takes effect from November 1, 2018. Business establishments and tax authorities have a period of 24 months (from November 1, 2018 to November 1, 2020) to prepare the conditions for facilities and information technology infrastructure so that taxpayers can register, use, look up and transfer electronic invoice data to tax authorities according to the provisions of Decree No. 119/2018/ND-CP. While the tax authority has not yet notified businesses and business organizations to switch to using electronic invoices according to Decree No. 119/2018/ND-CP dated September 12, 2018, invoices will still be applied according to the provisions of Decree No. 51/2010/ND-CP dated May 14, 2010, Decree No. 04/2014/ND-CP dated January 17, 2014 and documents guiding the implementation of the Decree. No. 51/2010/ND-CP, Decree No. 04/2014/ND-CP.

When a new Decree replaces Decree No. 119/2018/ND-CP, the company shall comply with the newly issued Decree.

Question 2: Our company is using electronic invoices. During the process of using them, we currently have a question about: “Is it possible to make a list of goods and services sold with electronic invoices?”, we hope the Tax Department will answer. ( Ms. Hanh)

>> Answer:

Pursuant to Circular No. 32/2011/TT-BTC dated March 14, 2011 and Circular No. 39/2014/TT-BTC dated March 31, 2014 of the General Department of Taxation, an electronic invoice is a collection of electronic data messages on the sale of goods and provision of services, with no limit on the number of lines on an invoice, so an electronic invoice does not include a list.

Question 3: Our company is a retail business using electronic invoices. Most of our customers are individuals who do not need invoices. So, during the period, can we consolidate and issue a single invoice for all of the above customers? (Ms. Hanh)

>> Answer:

Pursuant to Circular 39/2014/TT-BTC dated March 31, 2014, in case a company sells goods with the value of less than VND 200,000/time and the customer does not need an invoice, at the end of the day the company will issue an electronic invoice recording the amount of goods sold during the day according to the instructions of Circular 39/2014/TT-BTC. In case the value of goods is VND 200,000/time or more and the customer does not request an invoice, the company must still issue an invoice and clearly state “the buyer does not request an invoice”.

Question 4: Please explain the policies to support businesses in difficulty that will be implemented in 2020. Thank you! (UK)

>> Answer:

Some business support policies implemented from 2020 include: 

  • The deadline for paying taxes (VAT, CIT) and land rent is extended by 5 months for manufacturing and business enterprises in the industries, sectors and small and micro enterprises according to the provisions of Decree No. 41/2020/ND-CP dated April 8, 2020, specifically: VAT (from March 2020 to June 2020 or the first and second quarters of 2020), CIT (first and second quarters of the 2020 tax period and 20% remaining to be paid in the 2019 tax period) and land rent in the first period of 2020. The Tax Department would also like to remind businesses that the types of taxes that are extended for tax payment according to Decree 41/2020/ND-CP will be due in September 2020, including: 
    • VAT for the tax period of March 2020 must be paid no later than September 20, 2020;
    • Provisional corporate income tax payment for the first quarter of 2020 must be paid no later than September 30, 2020.
  • A 15% reduction in land rent payable in 2020 for enterprises and organizations that are directly leasing land from the State under a decision or contract of a competent State agency in the form of annual land rent payment and must stop production and business for 15 days or more due to the impact of the Covid-19 epidemic according to Decision No. 22/2020/QD-TTg dated August 10, 2020 of the Prime Minister;
  • Reduce 30% of the corporate income tax payable for the 2020 tax period for enterprises and organizations engaged in the production and trading of goods and services with total revenue in 2020 not exceeding VND 200 billion according to Resolution No. 116/2020/QH14 dated June 19, 2020.

Question 5: I am the legal representative – owner of a limited liability company A, and at the same time I have contributed capital to another limited liability company B, the capital contribution is 30% of the registered capital value at company B. At company A, I have borrowed capital from the bank to serve production and business activities (not related to company B) and incurred monthly interest. So is this interest expense valid or not & is it controlled according to Decree 68/2020/ND-CP? We hope that the tax authority will advise & answer to help our company do well. (Mr. Hoa)

>> Answer:

Legal basis:

  • Article 5 of Decree No. 20/2017/ND-CP dated February 24, 2017 on tax management for enterprises with related-party transactions stipulates the parties having related-party relationships;
  • Article 1 of Decree No. 68/2020/ND-CP dated June 24, 2020 of the Government amending and supplementing Clause 3, Article 8 of Decree No. 20/2017/ND-CP dated February 24, 2017 of the Government regulating tax management for enterprises with related party transactions.

Based on the above provisions, this case will be resolved as follows:

  • Company A is a corporate income tax payer according to the declaration method. If there are transactions with related parties as prescribed in Article 5 of Decree No. 20/2017/ND-CP, Company A is subject to Decree No. 68/2020/ND-CP. Therefore, the payment of interest on loans arising during the period is deductible (including interest on loans from banks and other organizations and individuals) when determining taxable income for corporate income tax in the case of application of the provisions in Clause 3, Article 8 of Decree No. 20/2017/ND-CP of the Government (amended and supplemented in Article 1 of Decree No. 68/20202/ND-CP);
  • In case company A does not have related party transactions with related parties, company A’s interest expenses are not subject to control according to the provisions of Decree No. 68/2020/ND-CP of the Government.

Question 6: My company is currently headquartered in Ho Chi Minh City, and has established dependent accounting branches in other provinces and cities. When transferring goods to the branches, does our company use invoices or internal delivery and transportation notes? (Mr. Vo Dung)

>> Answer:

In case the company as presented has its head office in Ho Chi Minh City and has established dependent accounting branches in other provinces and cities, when transferring goods to the branches, the company can choose one of two ways to use invoices and documents (VAT invoices or internal delivery and transportation notes) according to the instructions in Point 2.6 Appendix 4 issued with Circular 39/2014/TT-BTC.

Question 7: Our company has transferred its tax management authority from Dong Nai Tax Department to Ho Chi Minh City Tax Department. So what procedures do we need to carry out to continue using invoices that have been announced to be issued at Dong Nai Tax Department but have not been fully used? (Ms. Hanh)

>> Answer:

Pursuant to Clause 5, Article 3 of Circular 26/2015/TT-BTC dated February 27, 2015 amending Clause 9 of Circular 39/2014/TT-BTC dated March 31, 2014 of the Ministry of Finance:

  • In case the Company transfers its tax management authority from the Dong Nai Tax Department to the Ho Chi Minh City Tax Department and needs to continue using the issued invoices, the Company shall submit a report on the invoice usage situation (form BC26/AC) with a detailed list of invoices of organizations and individuals up to the time of invoice settlement (form BK02/AC) to the tax authority where it transfers, which is the Dong Nai Tax Department, and send a list of unused invoices (form BK01/AC) and a notice of information adjustment in the invoice issuance notice (form TB04/AC) to the tax authority where it transfers, which is the Ho Chi Minh City Tax Department.

Question 8: Our company has notified the issuance of invoices according to regulations and has been approved by the tax authority for use. However, currently, for the convenience of business operations, our company has changed its bank account, which is different from the bank account on the sample invoice when it was issued. So do we need to change the invoice form and notify the issuance of invoices again? (UK)

>> Answer:

Pursuant to Circular 39/2014/TT-BTC dated March 31, 2014: Since the account number criterion is not a mandatory content on the invoice as prescribed in Article 4 of Circular No. 39/2014/TT-BTC dated March 31, 2014 of the Ministry of Finance, the company does not need to change the form and re-issue the invoice.

Question 9: I heard that the Tax Administration Law limits the time limit for taxpayers to file additional tax returns. Can the Tax Authority please explain? If the Tax Authority has announced the decision to conduct a tax inspection at the company’s headquarters, can the company file an adjustment or supplement to the tax return? (Mr. Vo Dung)

>> Answer:

According to the provisions of Article 47 of the Law on Tax Administration dated June 13, 2019:

  • In case of detecting errors in the submitted tax declaration, the taxpayer is allowed to make a supplementary tax declaration within 10 years from the deadline for submitting the tax declaration of the tax period containing the errors but before the tax authority or competent authority announces the decision to inspect or examine;
  • In case the tax authority has announced the decision to inspect and examine taxes at the company’s headquarters, the company is still allowed to supplement the tax declaration; the tax authority shall impose administrative sanctions on tax management violations for violations according to the provisions of the Law on Tax Administration.

Question 10: How long does the tax authority have the right to conduct a tax audit at my company? (Mr. Vo Dung)

>> Answer:

According to the provisions of Article 110 of the Law on Tax Administration dated June 13, 2019: The tax inspection period shall not exceed 10 working days at the taxpayer’s headquarters (determined in the inspection decision) and shall be calculated from the date of announcement of the inspection decision.

Question 11: In 2017 and 2018, my company purchased and sold goods with related parties and when finalizing corporate income tax for 2017 and 2018, the company re-determined the interest expense and controlled it at a rate of 20% of the total net profit from business activities in the period plus interest expense incurred in the period plus depreciation expense incurred in the period. Up to now, the tax authority has not inspected the tax finalization for 2017 and 2018. So, can the company adjust the interest expense according to the provisions of Decree No. 68/2020/ND-CP of the Government? If adjusted, there will be an excess of corporate income tax paid, so can the company get a refund of that excess corporate income tax? (Mr. Hoa)

>> Answer:

Pursuant to Clause 2, Article 1 of Decree No. 68/2020/ND-CP dated June 24, 2020 of the Government amending and supplementing Clause 3, Article 8 of Decree No. 20/2017/ND-CP dated February 24, 2017 of the Government regulating tax management for enterprises with related-party transactions, it is stipulated as follows:

  • The company is allowed to supplement the corporate income tax finalization declaration for 2017 and 2018 to re-determine the deductible interest expense, the corresponding corporate income tax payable (if any) and submit it to the direct tax authority before January 1, 2021. In case the company has re-determined corporate income tax and late payment fees, the difference will be offset against the corporate income tax in 2020. If the 2020 tax is not fully offset, it will be offset against the corporate income tax payable for the next 5 years, but not exceeding 5 years from 2020. After the above deadline, the remaining tax amount that has not been fully offset will not be processed.

Question 12: When traveling, do I need to print out the issued invoice on A4 paper? If not, what documents should I use when traveling and what documents should I use when meeting authorities, market management agencies… to check the goods…? (Ms. Han)

>> Answer:

In case of applying electronic invoices according to the provisions of Decree No. 51/2010/ND-CP dated May 14, 2010, Decree No. 04/2014/ND-CP dated January 17, 2014 and Circular No. 32/2011/TT-BTC dated November 14, 2011, and the company wants to convert electronic invoices to paper invoices to prove the origin of tangible goods in circulation, the company shall comply with the provisions of Clause 1, Article 12 of Circular No. 32/2011/TT-BTC dated March 14, 2011.

Question 13: According to the provisions of Decree No. 68/2020/ND-CP of the Government, the non-deductible interest expense shall be transferred to the next tax period when determining the total deductible interest expense in case the total deductible interest expense arising in the next tax period is lower than the prescribed level. The period for transferring interest expense calculated continuously shall not exceed 05 years from the year following the year in which the non-deductible interest expense arises.

So, when the company declares to adjust the interest expense from 20% to 30% of the total net profit from business activities in the period plus the interest expense incurred in the period plus the depreciation expense incurred in 2017 and 2018, can the non-deductible interest expense be transferred to 2020? (UK)

>> Answer:

According to the provisions of Decree No. 68/2020/ND-CP of the Government, which takes effect from the 2019 corporate income tax period onwards, there is no retroactive application for transferring non-deductible interest expenses from 2017 and 2018 to the next tax period when re-determining the total deductible interest expenses according to the provisions of Decree No. 68/2020/ND-CP.

From the 2019 corporate income tax period onwards, the non-deductible interest expense shall be transferred to the next tax period when determining the total deductible interest expense in case the total deductible interest expense arising in the next tax period is lower than the prescribed level. The period for transferring interest expense calculated continuously shall not exceed 05 years from the year following the year in which the non-deductible interest expense arises.

Question 14: According to Resolution No. 116/2020/QH14, corporate income tax for 2020 is reduced by 30% for enterprises with annual revenue not exceeding 200 billion VND.

If the business has a fiscal year of 2020 from April 1, 2020 to March 31, 2021, will this 30% reduction be applied for the period from April 1, 2020 to March 31, 21 or will the 30% reduction be applied for the period from January 1, 2020 to December 31, 21?

If the 30% reduction is applied for the period from January 1, 2020 to December 31, 2021, then the 3 months of January, February, and March 2020 belong to the 2019 fiscal year. So, is the taxable income exempted calculated based on the 3 months of January, February, and March 2020 or calculated as the average of the 12 months of 2019 and multiplied by 3? (Anh Hung)

>> Answer:

Pursuant to Clause 1, Article 3 of Resolution No. 116/2020/QH14 dated June 19, 2020 of the National Assembly, the regulation on reducing 30% of corporate income tax payable is applied to the 2020 tax period.

Question 15: My company has 03 dependent accounting branches in different provinces from the head office in Ho Chi Minh City including: Dong Nai, Vung Tau, Tien Giang. Of which, the branch in Dong Nai and the branch in Vung Tau do not directly sell goods and do not generate revenue; the branch in Tien Giang directly sells goods and generates revenue. How can the tax authority guide the centralized tax declaration at the head office and the tax allocation to be paid at branches and affiliated units in other provinces? (Mr. Hoa)

>> Answer:

According to the provisions of Article 42 of the Law on Tax Administration dated June 13, 2019: Taxpayers declare and calculate taxes at the competent local tax authority where their headquarters is located. In case the taxpayer conducts centralized accounting at the head office and has a subsidiary unit in another province, the taxpayer shall declare taxes at the head office and calculate and allocate taxes payable according to the instructions of the Minister of Finance.

Question 16: Tax Administration Law 38/2019/QH14 takes effect on July 1, 2020, according to Clause 6, Article 136, which stipulates administrative sanctions for late submission of tax declarations, will be based on the notice of receipt of tax declarations when taxpayers declare taxes electronically (the notice of receipt clearly shows the violation) as the basis for making a decision to sanction administrative violations. So, does the tax authority not need to make a record of administrative violations to send to taxpayers before making a decision to sanction? I hope the Tax Department will answer (Mr. Vo Dung)

>> Answer:

According to the provisions of Article 136 of the Law on Tax Administration dated June 13, 2019: Regarding the use of electronic notification of receipt of dossiers (for tax registration, tax declaration, tax settlement procedures), if this notification clearly identifies an administrative violation in tax administration, it will be considered a record of administrative violation to issue a penalty decision. Regarding this content, the Government is finalizing regulations on penalties for administrative violations in tax.

Question 17: Our company is a high-risk tax enterprise and is currently purchasing invoices from tax authorities. Can we issue electronic invoices for use? (Ms. Ha)

>> Answer:

In case an enterprise uses self-printed or ordered invoices that are considered to be at high tax risk, it shall purchase invoices from the tax authority in accordance with Article 11 of Circular No. 39/2014/TT-BTC dated March 31, 2014 for a period of 12 months. After 12 months, based on the situation of invoice usage, tax declaration and payment of the enterprise and the enterprise’s request, the tax authority shall consider and issue a written notice for the enterprise to issue electronic invoices for use or continue to purchase invoices from the tax authority.

Question 18: The company has been audited by the tax authority for the year 2017. The tax authority has re-determined the interest expense and controlled it at a rate of 20% on the total net profit from business operations in 2017 plus interest expense incurred plus depreciation expense incurred in 2017. Up to now, according to the provisions of Decree No. 68/2020/ND-CP, is the company allowed to adjust the interest expense at a controlled rate of 30%?

Request the tax authority to guide the company on how to adjust interest expenses according to the provisions of Decree No. 68/2020/ND-CP for the years 2017, 2018 and 2019? (Mr. Vo Dung)

>> Answer:

Pursuant to Decree No. 68/2020/ND-CP, the company shall perform as follows:

  • For the 2017 corporate income tax period: 
    • In case the company has been audited by the tax authority and has an inspection, examination conclusion, and tax handling decision, the company shall prepare a document requesting the direct tax authority to re-determine the amount of tax payable. Based on the taxpayer’s request and related records and documents, the tax authority shall re-determine the amount of tax payable and the corresponding late payment fee to offset the difference according to regulations. The re-determining of the amount of tax payable shall be carried out at the tax authority’s headquarters; no re-inspection or re-examination shall be carried out at the taxpayer’s headquarters; no adjustment shall be made to the 2017 inspection conclusion and decision. In case the tax administrative violation has been sanctioned or is being resolved according to the complaint procedure, the amount of the tax administrative violation fine shall not be adjusted.
  • For the 2018 corporate income tax period: 
    • The Company shall supplement the 2018 corporate income tax finalization declaration to determine the interest expense and the corresponding corporate income tax payable (if any) and submit it to the direct tax authority before January 1, 2021. The direct tax authority shall be responsible for performing tax management and checking tax declarations at the tax authority’s headquarters according to regulations;
    • In case after supplementary declaration, the corporate income tax amount is reduced, the late payment amount will be reduced accordingly (if any);
    • The Company shall offset the difference in the amount of corporate income tax and the corresponding late payment interest against the corporate income tax amount in 2020. If the amount in 2020 is not enough to offset all, it shall be offset against the corporate income tax payable for the next 5 years from 2020. After the above deadline, the remaining unoffset corporate income tax amount shall not be processed.
  • For the 2019 corporate income tax period: 
    • In case the company has declared the 2019 tax settlement according to the tax period due before March 31, 2020, it shall make a supplementary declaration of the corporate income tax (CIT) settlement declaration dossier according to the provisions of Decree No. 68/2020/ND-CP amending and supplementing Clause 3, Article 8 of Decree No. 20/2017/ND-CP, and at the same time declare Form No. 01 Information on related relationships and related transactions in the Appendix issued with Decree No. 68/2020/ND-CP;
    • In case the company has not yet reached the 2019 tax settlement declaration period, it shall comply with the amended and supplemented provisions of Decree No. 68/2020/ND-CP.

Question 19: Our company would like to ask in case the seller has issued an electronic invoice to the buyer but for some reason such as issuing the wrong amount, the seller has not transferred the electronic invoice to the buyer and also for some reason the buyer changes their mind and no longer participates, so they cancel the contract, therefore they do not agree to sign the invoice withdrawal minutes for the seller. So in this case, we would like to ask, can the seller only make an invoice withdrawal minutes signed by one party?

If possible, please ask the Ho Chi Minh City Tax Department to respond to our company in writing to the email address: nguyenthibichtram@baoviet.com.vn to serve as a basis for future accounting! Sincerely thank you! (Ms. Tram)

>> Reply

Pursuant to Circular No. 32/2011/TT-BTC dated March 14, 2011 of the Ministry of Finance providing guidance on electronic invoices for the sale of goods and provision of services:

  • Because the company’s inquiry document did not clearly state the question, the Tax Department responded in principle that in case the Company has created an electronic invoice but has not sent it to the buyer, there is no need to create a record of invoice cancellation.

Question 20: Hello Ho Chi Minh City Tax Department, Our company is a securities company. The transaction data of a day is only finalized the next day, due to waiting for the order matching results from the Ho Chi Minh City Stock Exchange, Hanoi Department and the Depository Center. Only from the order matching results will the securities value be used to calculate transaction fees, depository fees and related fees. Therefore, the fee data for the last day of the month must be available at the beginning of the following month. Could you please guide the Ho Chi Minh City Tax Department on creating and signing electronic invoices to comply with Circular 68? While securities companies must send monthly revenue reports for the entire 30 (31) of the month to the State Securities Commission, the issuance of invoices must also be for the entire 30 (31) of the month to match the reported revenue. So is there any policy on the date of creation and signing of electronic invoices for special fields such as securities? Thank you very much! (Mr. Phong)

>> Answer:

Legal basis:

  • Point c Clause 8 Article 4 Circular 219/2013/TT-BTC of the Ministry of Finance dated December 31, 2013 stipulates subjects not subject to VAT;
  • Point a, Clause 2, Article 16 of Circular 39/2014/TT-BTC of the Ministry of Finance dated March 31, 2014 stipulates the date of invoice issuance when selling goods and providing services:
    • “In the case of selling gasoline at retail stores to regular buyers who are business organizations or individuals; providing banking and securities services, the invoice date is periodically implemented according to the contract between the two parties with a list or other documents confirmed by both parties, but no later than the last day of the month in which the purchase and sale of goods or provision of services occurs.…”

Based on the above provisions, the above case will be resolved as follows:

  • For companies operating in the securities business, the invoice date is periodically implemented according to the contract between the two parties, accompanied by a list or other documents confirmed by both parties, but no later than the last day of the month in which the goods or services are purchased or provided, as prescribed in Point a, Clause 2, Article 16, Circular 39/2014/TT-BTC. The fact that the company performs services in this month but issues invoices on the first day of the following month is not in accordance with the regulations.

Question 21: I would like to ask about the case where a customer issues an electronic invoice and sends it to my business. Is it possible that the customer later cancels the invoice without notifying me? I hope the tax authority can guide me on how to control such cases. (Mr. Huy)

>> Reply

For established electronic invoices, when errors are discovered, the parties shall comply with the provisions of Article 9 of Circular 32/2011/TT-BTC dated March 14, 2011:

  • In case an electronic invoice has been created and sent to the buyer but the goods have not been delivered or services have not been provided, or an electronic invoice has been created and sent to the buyer, the seller and the buyer have not declared taxes, if an error is discovered, it can only be canceled with the consent and confirmation of the seller and the buyer. The cancellation of an electronic invoice is effective within the time limit agreed upon by the parties involved. The canceled electronic invoice must be stored for the reference of the competent state agency.
    The seller shall create a new electronic invoice in accordance with the provisions of this Circular to send to the buyer. The new electronic invoice must contain the words “this invoice replaces invoice number…, symbol, sent on the date, month, year;
  • In case the invoice has been created and sent to the buyer, the goods have been delivered, the service has been provided, the seller and the buyer have declared taxes, and then errors are discovered, the seller and the buyer must create a written agreement with the electronic signatures of both parties clearly stating the errors, and at the same time the seller creates an electronic invoice to correct the errors. The electronic invoice created later clearly states the adjustment (increase, decrease) in the quantity of goods, sales price, value added tax rate, value added tax amount for electronic invoice number…, symbol… Based on the adjusted electronic invoice, the seller and the buyer make an adjustment declaration according to the provisions of the law on tax and invoice management in force. The adjusted invoice must not contain a negative number (-).

Question 22: The deadline for paying annual non-agricultural land use tax is October 30. This year, my unit has completed the application for tax extension according to Decree 41/2020/ND-CP, including this non-agricultural land use tax, to the Ho Chi Minh City Tax Department. However, the unit’s headquarters on Le Duan Street, Ben Nghe, is under the management of non-agricultural land tax by the District 1 Tax Department. So I would like to ask: If the unit submits an application for extension according to Decree 41/2020/ND-CP to the Ho Chi Minh City Tax Department while the District 1 Tax Department manages the application, will it be extended? (Mr. Huy)

>> Answer:

Pursuant to Decree No. 41/2020/ND-CP dated April 8, 2020 issued by the Government, non-agricultural land use tax is not subject to extension.

Question 23: Our company is a transportation business, the characteristic of our business is that after completing the transportation service, at the end of each month, both parties need time to compare the data generated in the previous month before issuing the financial invoice. Therefore, can we set the invoice date to the end of the month in which the service occurred, but the electronic signature date to be the date of the following month (around the 1st to the 5th)? (Ms. Ha)

>> Answer:

Legal basis:

  • Circular No. 32/2011/TT-BTC dated March 14, 2011;
  • Circular 39/2014/TT-BTC dated March 31, 2014.

The specific provisions in this case are as follows:

  • In case the company is using electronic invoices according to Decree 51/2010/ND-CP, Circular No. 39/2014/TT-BTC, Circular No. 32/2011/TT-BTC, the time of issuing electronic invoices when selling goods and providing services shall comply with the provisions of Clause 2, Article 16 of Circular 39/2014/TT-BTC. When issuing electronic invoices, the company must have full contents of the electronic invoice according to the provisions of Article 6 of Circular 32/2011/TT-BTC. In case the company presents the service provided in the previous month but signs the invoice and delivers it to the customer in the following month, the invoice shows the date of issuance of the invoice as the date of the previous month, which is not in accordance with the regulations.

Question 24: Our company is using electronic invoices for service sales, and we want to switch from electronic invoices to paper invoices for use for many different purposes, but due to the large number of invoices, we would like to ask the Tax Department if we need the signature of the legal representative and the company seal on the converted invoice? (UK)

>> Answer:

For cases of applying electronic invoices according to the provisions of Decree No. 51/2010/ND-CP dated May 14, 2010, Decree No. 04/2014/ND-CP dated January 17, 2014 and Circular No. 32/2011/TT-BTC dated November 14, 2011 of the Ministry of Finance guiding the creation, issuance and use of electronic invoices when selling goods and providing services:

  • In case of converting electronic invoices to paper invoices to prove the origin of tangible goods in circulation and only being converted once (01), the electronic invoice converted to paper invoices to prove the origin of goods must meet the regulations stated in Clauses 2, 3, 4, Article 12 of Circular No. 32/2011/TT-BTC and must have the signature of the legal representative of the seller and the seal of the seller. In case the legal representative does not sign directly on the converted electronic invoice, there must be a power of attorney for the direct seller to sign, clearly state his/her full name on the invoice and affix the organization’s seal on the left side of the invoice;
  • In case of converting electronic invoices to paper invoices to serve the storage of accounting documents according to the provisions of the Law on Accounting, the electronic invoices converted to paper invoices for storage must satisfy the provisions stated in Clauses 2, 3, 4, Article 12 of Circular No. 32/2011/TT-BTC.

Question 25: Our company is currently having the following problem. Our company is the buyer. The seller has issued an invoice and we have received the goods, but then discovered that the materials and goods are not of the correct specifications or quality and must return all or part of the goods. How should we handle the invoice? (Mr. Vo Dung)

>> Answer:

Pursuant to Point 2.8 Appendix 4 issued with Circular No. 39/2014/TT-BTC dated March 31, 2014 of the Ministry of Finance:

  • In case the unit as presented is the Buyer of materials and goods, the Seller has issued an invoice and the Buyer has received the goods but then discovered that the materials and goods are not of the correct specifications or quality and must return all or part of the goods, when returning them to the Seller, the unit must issue an invoice, clearly stating on the invoice that the goods are returned to the Seller due to incorrect specifications or quality, and the VAT amount (if any);
  • In case the buyer is the subject without an invoice, when returning the goods, the buyer and seller must make a record clearly stating the type of goods, quantity, value of the returned goods at the price without VAT, the VAT amount according to the sales invoice (invoice number, date, month), reason for returning the goods and the seller must collect the invoice that has been made.

Question 26: Our company is only a subcontractor signed with a number of main contractors (who have paid 2% of out-of-province revenue to the investor), specifically Daewon Company, Itech Company, Han VN Company. So does our company still have to pay this out-of-province tax? (Mr. Hoa)

>> Answer:

According to the provisions of Article 42 of the Law on Tax Administration dated June 13, 2019: Taxpayers declare and calculate taxes at the competent local tax authority where their headquarters is located. In case the taxpayer conducts centralized accounting at the head office and has a subsidiary unit in another province, the taxpayer shall declare taxes at the head office and calculate and allocate taxes payable according to the instructions of the Minister of Finance.

While the Government is finalizing the Decree implementing the Law on Tax Administration dated June 13, 2019, in case the company is a subcontractor generating extra-provincial revenue, the company shall declare and temporarily pay VAT as a main contractor according to the guidance of the Ministry of Finance in Circular No. 156/2013/TT-BTC dated November 6, 2013. In case the Decree implementing the Law on Tax Administration dated June 13, 2019 is issued, the company is requested to comply with the provisions of this Decree.

Question 27: According to the Law on Handling of Administrative Violations, a violation is only punished once. In case a business receives an invoice from a business that has abandoned its business address and has declared it, affecting the tax payable, what is the penalty? (Ms. Hanh)

>> Answer:

According to the provisions of Article 136 of the Law on Tax Administration dated June 13, 2019: 

  • In case a company commits an administrative violation of using illegal invoices, using invoices illegally or using invoices in violation of regulations leading to tax arrears or tax evasion, it will not be subject to administrative penalties for invoice violations but will be subject to administrative penalties for tax management violations;
  • In case a company commits an administrative violation of using illegal invoices or illegally using invoices that does not lead to tax arrears or tax evasion, it will not be subject to administrative penalties for violations of invoices according to regulations.

Question 28: For businesses that have related party transactions, do they have to prepare and submit any reports? When is the deadline for submitting this report? Is the deductible expense when determining corporate income tax in 2020 20% EBITDA or 30% EBITDA? (UK)

>> Answer:

Legal basis:

  • Decree No. 20/2017/ND-CP dated February 24, 2017 of the Government regulating tax management for enterprises with related party transactions;
  • Pursuant to Clause 2, Article 1 of Decree No. 68/2020/ND-CP dated June 24, 2020 of the Government amending and supplementing Clause 3, Article 8 of Decree No. 20/2017/ND-CP dated February 24, 2017 of the Government regulating tax management for enterprises with related-party transactions.

Accordingly, the company’s case is stipulated as follows:

  • In case the Company has related party transactions, it is responsible for declaring information on related party relationships and related party transactions according to Form No. 01 in the Appendix issued with Decree 20/2017/ND-CP (for corporate income tax calculation periods of 2017 and 2018) and Decree No. 68/2020/ND-CP (for corporate income tax calculation periods from 2019 onwards) and submitting it together with the annual corporate income tax finalization declaration;
  • As for the national dossier according to form No. 02, the global group information dossier according to form No. 03, the cross-country profit report of the ultimate parent company according to form No. 04 in the Appendix issued with Decree 20/2017/ND-CP, the company is responsible for keeping and presenting it upon request of the Tax Authority;
  • In case the company is exempted from declaration and preparation of transfer pricing dossier, it shall comply with the provisions of Article 11 of Decree No. 20/2017/ND-CP;
  • Total interest expense (after deducting deposit interest and loan interest) arising in 2020 is deductible when determining taxable income of CIT not exceeding 30% of total net profit from business activities in the period plus interest expense (after deducting deposit interest and loan interest) arising in the period plus depreciation expense arising in the period.

Question 29: Our company is currently using paper invoices but wants to switch to using electronic invoices. Could the Tax Department please guide us on the procedures for notifying the issuance of electronic invoices so that we can implement them? (Ms. Hanh)

>> Answer:

  • According to current regulations, the company notifies the issuance of invoices according to Decree No. 51/2010/ND-CP and Decree No. 04/2014/ND-CP, the company sends the invoice issuance notice attached with the decision to apply electronic invoices and sample invoices on the Electronic Tax application (eTax).

Note:

º The issuance notice sent to the tax authority must have the correct name of the legal representative;
º Information about the organization providing the electronic invoice solution must be consistent on the issuance notice, the decision to apply electronic invoices and the electronic invoice form;
º Symbols and sample numbers are as prescribed in Appendix 01 of Circular 39/2014/TT-BTC;
º Taxpayers can look up the invoice issuance notice accepted by the tax authority at http://tracuuhoadon.gdt.gov.vn/.

  • From July 1, 2020, the Tax Administration Law No. 38/2019/QH14 takes effect. While waiting for the Decree guiding the Tax Administration Law No. 38/2019/QH14 to be issued, the company will temporarily follow the above instructions. In case the issued Decree has other instructions, the company is requested to follow the instructions in the Decree and related instructions.

Question 30: Our company is a service provider that is using electronic invoices. So when we create invoices for customers, how do we record the unit of measurement on the invoice? (UK)

>> Answer:

Pursuant to Circular 119/2014/TT-BTC dated August 25, 2014 and Circular 39/2014/TT-BTC dated March 31, 2014:

  • In case the taxpayer provides services, the invoice does not necessarily have to have the criterion “unit of calculation”, the content on the invoice must be correct for the arising economic transaction and ensure the principle that the information contained in the electronic invoice can be accessed and used in complete form when necessary according to the provisions of Clause 3, Article 3 of Circular No. 32/2011/TT-BTC dated March 14, 2011 of the Ministry of Finance.

Question 31: Our company is currently using electronic invoices. In 2019, we issued invoices according to form 01GTKT0/001. Now we want to switch to using invoice form 01GTKT0/002. So can we use invoice form 01GTKT0/002 for invoices issued according to form 01GTKT0/001? (Ms. Lan)

>> Answer:

Pursuant to Circular 32/2011/TT-BTC dated March 14, 2011 and Article 3 of Circular 26/2015/TT-BTC dated February 27, 2015:

  • In case the company changes the electronic invoice form with the content that has been announced for issuance (from form 01GTKT0/001 to form 01GTKT0/002), the company shall make a new issuance notice with the attached sample invoice and decide to apply the electronic invoice in accordance with the new form.

Question 32: My company has corporate income tax payable due to interest expenses exceeding 20% ​​of EBITDA for the tax periods of 2017 and 2018. My company has had its tax finalized by the General Department of Taxation’s inspection team in 2017 and 2018. Now that Decree 20 has been amended, raising the ceiling of valid interest to 30% of EBITDA, what should our company do to be able to recover the corporate income tax already paid? Please respond by email to the Tax Department, because I may not be able to attend the online listening session. Thank you very much. (Mr. Vo Dung)

>> Answer:

Pursuant to Article 1 of Decree No. 68/2020/ND-CP dated June 24, 2020 amending and supplementing Clause 3, Article 8 of Decree No. 20/2017/ND-CP dated February 24, 2017 of the Government regulating tax management for enterprises with related-party transactions, it is stipulated that:

  • In case the enterprise has been inspected by the tax authority in 2017, 2018 and has a conclusion and decision on handling. The enterprise shall prepare a document requesting the direct tax authority to re-determine the amount of tax payable. Based on the request of the taxpayer and related records and documents, the tax authority shall re-determine the amount of tax payable and the corresponding late payment fee to offset the difference according to regulations. The re-determining of the amount of tax payable shall be carried out at the tax authority’s headquarters, without re-inspection or re-examination at the taxpayer’s headquarters, and without adjusting the conclusion and decision on inspection;
  • In case of administrative penalty for tax violation or in process of handling complaint, the amount of administrative penalty for tax violation will not be adjusted.

Question 33: What is the deadline for submitting tax returns for August 2020 and the third quarter of 2020? (UK)

>> Answer:

According to Article 44 of the Law on Tax Administration dated June 13, 2019, the deadline for submitting tax declarations for: 

  • Monthly tax declaration is no later than the 20th day of the month following the month in which the tax liability arises in the case of monthly declaration and payment;
  • The latest date for quarterly tax declaration is the last day of the first month of the quarter following the quarter in which the tax liability arises in the case of quarterly declaration and payment.

Therefore:

>> Deadline for submitting tax declaration for August 2020 is September 20, 2020;

>> Deadline for submitting tax declaration for the third quarter of 2020 is October 31, 2020.

Question 34: Our company started using electronic invoices from July 1, 2020, but there are still printed invoices that have been announced for issuance according to Decree 51/2010/ND-CP. Can we use both forms of invoices at the same time or do we have to cancel the printed invoices? (Ms. Hanh)

>> Answer:

Legal basis:

  • Clause 2, Article 1 of Decree No. 04/2014/ND-CP dated January 17, 2014 of the Government amending and supplementing a number of articles of Decree No. 51/2010/ND-CP dated May 14, 2010;
  • Clause 3, Article 7, Circular No. 32/2011/TT-BTC dated March 14, 2011.

Accordingly, the company’s case is stipulated as follows:

  • In case the company as presented starts using electronic invoices from July 1, 2020, still has printed invoices that have been announced for issuance according to the provisions of Decree 51/2010/ND-CP and has a need to continue using unused printed invoices in parallel with electronic invoices, the parent company is allowed to use the invoices that have been announced for issuance;
  • In case of selling goods or providing services, for each sale of goods or provision of services, the business organization shall only use one (01) form of invoice, specifically:  
    • If a business organization uses self-printed invoices for the sale of goods or provision of services, it must not use printed invoices or electronic invoices for the sale of goods or provision of services; 
    • If using electronic invoices, do not use self-printed invoices or printed invoices;
    • If using printed invoices, do not use electronic invoices or self-printed invoices.

Question 35: Our company is using an existing electronic invoice that has an error in customer information (MST), but our company has not delivered the goods and the customer has not declared taxes. So, please let me ask the tax authority how our company should handle this electronic invoice in this case? (UK)

>> Answer:

Pursuant to Circular No. 32/2011/TT-BTC dated March 14, 2011:

  • In case an electronic invoice has been created and sent to the buyer but the goods have not been delivered, the seller and the buyer have not declared VAT, if an error is discovered, it can only be canceled with the consent and confirmation of the seller and the buyer. The cancellation of the electronic invoice is effective within the time limit agreed upon by the parties involved. The canceled electronic invoice must be stored for the reference of the competent state agency. The seller creates a new electronic invoice to send to the buyer, on the new electronic invoice must be the line “This invoice replaces invoice number…, symbol…, sent on… month… year…

Question 36: In August 2020, my company signed a labor contract with an individual who has not been granted a tax code. Does my company have to register taxes for employees and their dependents (or do employees contact the tax authorities themselves to do so)? (Mr. Vo Dung)

>> Answer:

According to the provisions of Article 33 of the Law on Tax Administration dated June 13, 2019:

  • In case an individual does not have a tax code, the income-paying organization is responsible for registering tax on behalf of the income-earning individual no later than 10 working days from the date the tax liability arises;
  • In case the dependent does not have a tax code, the income paying organization is responsible for registering tax on behalf of the taxpayer’s dependent no later than 10 working days from the date the taxpayer registers for family deductions according to the provisions of law.

Question 37: If we have a loan from a company (this company has a shareholder holding 15%), is it considered an affiliated transaction? But if there is an individual shareholder who invests in many companies, are these companies’ transactions with each other considered affiliated transactions? How are revenues and expenses controlled? (Mr. Hoa)

>> Answer:

Pursuant to Articles 2 and 5 of Decree 20/2017/ND-CP dated February 24, 2017 of the Government regulating tax management for enterprises with related party transactions:

  • In case a company borrows from another enterprise, if the company is the largest shareholder in terms of capital contribution of the owner of the other enterprise, directly or indirectly holding at least 10% of the total shares of the other enterprise, then the transactions arising between the company and the other enterprise are related transactions;
  • In case a shareholder is an individual who invests in many companies and is controlled by an individual through the capital contribution of this individual to that enterprise or directly participates in the management of the enterprise, it is determined that there is an affiliated relationship. If these companies conduct transactions between enterprises, they are affiliated transactions. The determination of revenue and expenses for enterprises with affiliated transactions is implemented according to the provisions of Articles 6, 7 and 8 of Decree No. 20/2017/ND-CP.
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