Cases where invoices must be issued and cases where invoices are not required

The article summarizes cases where invoices must be issued, cases where invoices are not required according to Circular 78, Circular 39; time to issue sales invoices

Is it necessary to issue an invoice when buying or selling goods or providing services? So when is it mandatory to issue an invoice and when is it not necessary to issue an invoice? Let’s find out this issue with fdiinvietnam.com through the article below.

I. Cases where invoices must be issued

1. What is an invoice?

An invoice is an accounting document prepared by a seller of goods or provider of services to record sales transactions and revenue received. This document represents the purchase and sale relationship between the buyer and seller.

2. Legal basis for cases requiring invoices

• Decree 51/2010/ND-CP regulating invoices for the sale of goods and provision of services, and administrative sanctions for violations related to invoices;
• Decree 04/2014/ND-CP amending and supplementing a number of articles of Decree No. 51/2010/ND-CP;
• Circular 39/2014/TT-BTC guiding the Decree on invoices for the sale of goods;
• Circular 26/2015/TT-BTC amends and supplements a number of articles of Circular 39/2014/TT-BTC;
• Circular 78/2014/TT-BTC guiding the implementation of the Corporate Income Tax Law.

3. Cases where invoices are required

Enterprises selling goods or providing services to customers, regardless of the value of the goods or services, must issue invoices to buyers, including goods and services used for promotions, samples, advertising, exchange, gifts, internal consumption or salary payment…

➤ Before November 1, 2020 : 

• For paper invoices: including printed invoices, self-printed invoices, invoices purchased from the tax authority (CQT);
  When selling goods and services with a value of less than 200,000 VND per sale, the seller does not need to issue an invoice, only needs to issue a retail list of services if the buyer does not request an invoice. If the buyer requests an invoice, the seller is required to issue an invoice according to Circular 39/2014/TT-BTC;
• For electronic invoices: Sellers must issue invoices to buyers of goods and services provided for a value of VND 200,000 or more, even if the buyer does not request an invoice or the value of the goods or services provided is less than VND 200,000 and the buyer requests an invoice (according to Decree 51/2010/ND-CP and Circular 39/2014/TT-BTC).

➤ After November 1, 2020: 

Enterprises are not allowed to print and issue paper invoices. If they still have paper invoices, they can use both paper invoices and electronic invoices.

When selling goods or providing services, regardless of the value of each sale, an invoice must be issued to the buyer. Because 100% of businesses are required to use electronic invoices according to Article 4, Clause 1 of Decree 119/2018/ND-CP.

➨ Therefore, from November 1, 2020, economic organizations, enterprises, individuals, and business households when selling goods and providing services must issue electronic invoices in accordance with regulations and fully record the content regardless of the value of each sale of goods or provision of services, and regardless of whether the buyer takes the invoice or not.

Enterprises that do not issue invoices will be fined according to the provisions of Article 24 of Decree 125/2020/ND-CP:

• From VND 500,000 – VND 1,500,000 if a consolidated invoice is not issued according to regulations on sales or service provision for promotional goods, gifts, samples, etc.;
• From 10,000,000 VND to 20,000,000 VND (except for the above-mentioned acts).

II. Cases where invoices are not issued

1. In case of not issuing invoices according to Appendix 4 of Circular 39/2014/TT-BTC

1.1. Exporting goods to dependent units and branches

Goods transferred to internal departments and dependent accounting units do not issue invoices but use internal warehouse delivery and transportation vouchers to check and compare data between parties, and can record value or not.

1.2. Goods delivered to agents for sale at the correct price to enjoy commission

When goods are delivered to the agent to be sold at the right price to receive commission, the delivering party does not need to write an invoice when delivering the goods to the agent, but uses an internal warehouse delivery note and transfer order. At the end of the month, based on the agent’s data, the delivering party will issue an invoice to pay the commission that the agent receives.

1.3. Transfer of assets between affiliated units within the group

Between dependent accounting member units in a unit when merging, splitting, consolidating, or converting business types, transferred assets must have a transfer order or transfer decision attached to the records of the formation of those assets.

1.4. Individuals who do not do business but contribute capital in the form of assets to the company

Individuals or organizations that do not do business but contribute capital to a limited liability company or joint stock company with assets only need a capital contribution certificate and an asset handover certificate.

2. Cases where invoices are not required according to Circular 219/2013/TT-BTC

2.1. Bonuses, support, compensation, financial income (such as late interest, dividends, insurance compensation)

For example:

Company A receives contract compensation from company B, because company B breached the contract, company A will not have to issue an invoice but only need to make a receipt, that amount is not declared for VAT but must be declared and paid for corporate income tax. Meanwhile, company B makes a payment receipt and pays the money.

2.2. Individuals and organizations that do not do business but sell assets

For example: 

Ms. C does not participate in business, has a car and now sells it to Mr. A, then Ms. C does not need to issue an invoice for the sale of that car.

2.3. Transferring the project to continue production and business

For example: 

Company A invested in a solar power project and completed 80% of the progress. However, due to a lack of capital and difficulties, Company A sold the project to Company C. Company A does not need to issue an invoice, just needs to make a project transfer contract.

2.4. Transfer of assets between members depends on business purposes.

Fixed assets that have been used and depreciated when transferred to dependent units do not need to be invoiced.

2.5. Contribute capital in assets to establish a company

Individuals who do not do business and want to contribute capital to a business only need a record of handover of contributed assets.

2.6. Goods delivered to agents for sale at correct price

The party delivering to the agent will use the internal delivery note instead of the invoice to send to the agent to sell at the correct price to receive commission.

3. Cases where invoices are not issued according to Circular 78/2014/TT-BTC

The following cases do not require an invoice, but only need to create a statement number 01/TNDN:

• Goods are agricultural products, aquatic products, and seafood sold directly by fishermen;
• Handicraft products made from rope, sedge, bamboo, coconut shell, coconut shell, straw… or materials recycled from agricultural products sold directly by handicraft producers;
• Soil, rock, sand, gravel directly exploited by individuals and households for sale;
• Goods and services of individuals and non-business households with revenue below the permitted threshold of VND 100 million/year.

4. Cases where invoices are not issued according to Circular 119/2014/TT-BTC

In these cases, no invoice is required, only a statement is required:

• Internal circulation of goods to continue production and business; 
• Business establishments self-produce and construct fixed assets to serve the production and trading of goods subject to VAT;
• Machinery and equipment for loan/borrowing if there is a contract and appropriate transaction-related documents.

III. Time and date of invoice issuance

1. For goods

The time of transferring the right to use and the right to use the product to the buyer regardless of whether the payment has been received or not. If the invoice is issued multiple times, each delivery must be issued an invoice corresponding to the value and quantity of the goods delivered.

2. For services

The time when the service is completed, regardless of whether the payment has been collected or not. If the payment is collected in advance, the invoice is issued at the time of collection.

3. For construction and installation

It is the time of acceptance, handover of works, construction items, construction volume, completion of installation, not knowing whether money has been collected or not…

4. For electricity, domestic water, television, telecommunications

No later than 7 days from the date of recording the electricity or water consumption on the meter or the date of termination of the provision of telecommunications or television services under the contract.

5. Export

The time of invoice issuance is the time of delivery of goods to the buyer, and the time of determining revenue for tax calculation is the date of completion of procedures on the declaration.

IV. Some frequently asked questions