With an effort to switch from paper invoices to electronic invoices, a proposal from the Ministry of Finance of Vietnam had been accepted by the Vietnamese government. Therefore, Decree 119 in regard to the use of electronic invoices for the sales of goods and services was issued and has been effective since November 1, 2018.
The replacement of paper invoicing with e-invoicing has long been deemed inevitable and has finally been realised in Vietnam. The implementation is currently bringing positive changes to the country’s progressive economy, benefiting all stakeholders, namely customers, suppliers, and business owners.
Through this article, Cekindo is bringing you the most popular questions about e-invoicing in Vietnam so that you are fully aware of the changes and how it can make a difference in your business.
1. What is e-invoice in Vietnam?
E-invoice is an invoice that is issued, processed and received electronically or digitally, without the need of paperwork.
2. Is e-invoicing compulsory for all businesses in Vietnam?
Yes, it is. However, there is a transition period. Businesses can continue to use pre-printed, self-printed or purchased invoices from the tax authorities until November 1, 2020.
3. How many types of e-invoices are there?
There are two types of e-invoices in Vietnam:
- e-invoices with verification code
- e-invoices without verification code
4. Can I use all types of e-invoice for tax declaration purpose?
No. You can only use e-invoices with the verification codes for tax declarations.
5. So, which type of e-invoice should I use for my business?
The type of e-invoice to be used mostly depends on your business sector in Vietnam:
e-invoice without verification code
Sectors that need to use e-invoice without verification code are: telecommunications, petroleum, electricity, transportation, credit financing, insurance, e-commerce, trading, and supermarkets sectors.
Businesses with the technology capacity and infrastructure (with approved accounting software) to transact with tax authorities directly and electronically can use this type of invoice as well.
e-invoice with verification code
Sectors that need to use e-invoice without verification code are: forestry, agriculture, and fishery.
Construction sector needs to use this type of e-invoice when:
- Employing more than 10 labour workers
- Having annual revenue of more than VND 3 billion in the previous year.
For trade and services sectors, this e-invoice is required when individuals or companies meet the following conditions:
- Having annual revenue of more than VND 10 billion
6. What do I have to do before implementing e-invoicing?
Before using any types of e-invoices, companies are required to register at the tax authorities via the General Department of Taxation’s website. Upon approval, e-invoices can be used.
7. What are the benefits of e-invoicing?
E-invoicing can cut down the time and costs for businesses significantly. On top of that, it will greatly reduce the administrative burden, ensure efficient account reconciliation, eliminate billing frauds, and maintain transparency.
According to the government of Vietnam, it is estimated that companies in Vietnam can save approximately US$44 million (VND 1 trillion) if 2.5 billion e-invoices are used per year.
8. Is there a standardised format of e-invoice in Vietnam?
Yes, there is. An e-invoice with standardised format is prescribed by the Vietnamese tax authorities. Individuals and businesses that are providing services or selling goods must issue this standardised e-invoice to their buyers. All necessary information must be included in the e-invoice, no matter how big or how small the total value is.
9. Can I print out e-invoices for other purposes?
You are allowed to convert e-invoices into paper invoices for accounting purposes only. Other purposes are forbidden, i.e. you are prohibited to print out e-invoices and use the hard copies for transactions as they are not valid invoices in their paper form.
Read more about e-invoicing in Vietnam: How to Comply with Mandatory E-Invoices in Vietnam
How Cekindo Can Help with Vietnam E-Invoice
Handover your administrative tasks to us. We will take care of your e-invoices, from the beginning of the process. Get in touch with us today to know more about how Cekindo can help you through this specific service or our other outsourcing services.