Instructions on how to cancel issued electronic invoices, including: Regulations, procedures for canceling electronic invoices and cases of canceling electronic invoices according to Circular 78.
The following article will guide you through the cases where it is necessary to cancel an electronic invoice and ensure that the cancellation procedure is carried out in accordance with the provisions of law, based on Decree 123/2020/ND-CP and Circular 78/2021/TT-BTC.
I. What is electronic invoice cancellation?
According to Clause 10, Article 3 of Decree 123/2020/ND-CP, canceling an electronic invoice means making the electronic invoice invalid.
Enterprises need to pay attention to distinguish the cancellation of electronic invoices from the concept of invoice destruction. According to the provisions of Clause 11, Article 3 of Decree 123/2020/ND-CP, the destruction of electronic invoices means making the electronic invoices no longer exist on the tax authority’s information system and the information in the destroyed invoices cannot be referenced.
II. Regulations on canceling electronic invoices
1. Cases of canceling issued electronic invoices
Can an electronic invoice be canceled? The answer depends on the case whether the enterprise can cancel the electronic invoice or not. Specifically, based on the provisions of Clause 1, Article 19 of Decree 123/2020/ND-CP and the instructions at Point b, Clause 1, Article 7 of Circular 78/2021/TT-BTC, there are 2 cases where an enterprise must cancel the issued electronic invoice:
- Case 1: The enterprise discovers that an incorrectly written electronic invoice has been issued and has been given a code by the tax authority but has not yet been sent to the customer;
- Case 2: The enterprise has issued an invoice to collect payment in advance to the customer but then cancels or terminates the service contract with that customer.
2. Penalty for violating the cancellation of electronic invoices
According to Article 27 of Decree 125/2020/ND-CP, violations of the regulations on canceling electronic invoices may be subject to a fine of VND 2,000,000 to VND 8,000,000. In addition, businesses are also forced to cancel invoices to take remedial measures. Specifically as follows:
- Warning penalty: Canceling invoices 1-5 working days past the prescribed deadline but with mitigating circumstances;
- Fine from 2,000,000 – 4,000,000 VND: Cancellation of invoices 1 – 10 working days past the prescribed deadline;
- Fines from 4,000,000 – 8,000,000 VND for the following acts:
- Cancel invoices that are 11 working days or more past due according to regulations;
- Failure to cancel invoices in accordance with the law;
- Do not cancel an electronic invoice when it is created incorrectly after the deadline for the tax authority to notify the seller about the error check has passed.
III. Instructions for procedures to cancel issued electronic invoices
1. Procedure for canceling issued electronic invoices
➤ Step 1: Notify the tax authority of the erroneous invoice according to form No. 04/SS-HDDT Appendix IA issued with Decree 123/2020/ND-CP.
➤ Step 2: Create a new electronic invoice, sign it and send it to the tax authority to issue a new invoice code to replace the created invoice and send it to the customer.
➤ Step 3: Cancel the electronic invoice that has been reported as incorrect.
➤ Step 4: To limit risks when tax authorities come to inspect and check, businesses should make a record of agreement confirming invoice cancellation with customers.
➤ Step 5: To make sure the invoice has been canceled, the business must check whether the error notification has been updated to the accepted status by the tax authority, and check the status of that invoice on the website https://hoadondientu.gdt.gov.vn/.
2. Time limit for canceling electronic invoices
Enterprises should note that they must submit a notice of erroneous electronic invoices (form No. 04/SS-HDDT) no later than the last day of the tax declaration period in which the erroneous electronic invoice was issued.
>> Learn more: How to handle and adjust incorrectly written electronic invoices.
IV. Frequently asked questions when canceling electronic invoices
1. Is canceling an electronic invoice and destroying an electronic invoice the same thing?
Canceling an invoice and destroying an invoice are completely different:
- Canceled invoice: is an invoice that is no longer valid but still exists in the information system and can be looked up and checked when needed;
- Invoice destruction: is an invoice that is no longer valid, no longer exists in the information system and cannot be looked up for information on the invoice.
2. In case a business discovers an error in an electronic invoice that has been issued and sent to a customer, can it cancel the incorrect invoice and issue a new invoice to the customer?
In this case, the business handles the error by issuing an adjustment invoice or replacing the erroneous invoice without canceling the invoice.
3. Will a business that cancels an electronic invoice but does not submit an error notice form No. 04/SS-HDDT to the tax authority be fined?
Enterprises that do not submit a notice of erroneous electronic invoices form 04/SS-HDDT to the tax authority will be fined from a warning to VND 15,000,000. Details of the fine for each act are specifically prescribed in Article 29 of Decree 125/2020/ND-CP.