The purpose of an invoice
An invoice is an important commercial document that a seller gives to buyer in order to claim payment. It generally itemizes the transaction and serves as a record of it. The rules for invoicing a client in Vietnam may differ to rules in other countries, as the e-invoicing system has replaced the traditional system of invoicing.
E-invoices in Vietnam
An e-invoice is an invoice that is issued and processed digitally, negating the use of printed invoices. The term ‘e-invoice’ includes all sales invoices, value added tax invoices, and electronic invoices such as e-tickets. Decree 119 on e-invoicing took effect from 1 November 2018. This Decree made it compulsory for all enterprises to issue invoices electronically instead of printed invoices. Decree 119 granted enterprises and individuals a 2-year transition period, during which time they need to adopt the e-invoicing system.
The e-invoice system was implemented in an effort to reduce the amount of paper being used and become more digitalized; as well as to be able to track transactions in an easier manner, and decrease the occurrence of invoice fraud.
Types of E-invoices in Vietnam
There are two categories of e-invoices:
- An e-invoice with a tax verification code; and
- An e-invoice without a tax verification code.
An e-invoice with a tax verification code
From November 2020, all companies or self-employed individuals with an annual turnover of more than US$130,000 (3 billion VND) and who employ 10 or more employees, must use e-invoices that have tax verification codes. This applies to participants in the agriculture, construction, fishery and forestry industries.
Companies and individuals in the trade and service sector are also required to use e-invoices with tax verification codes if they have an annual revenue of US$430,000 (10 billion VND) or more.
Companies are required to register and get approval from the General Department of Taxation in Vietnam, in order to use e-invoices. E-invoices are required to be archived for a period of 10 years.
An e-invoice without tax verification code
Companies in the following industries can issue invoices without a tax verification code:
- Credit financing;
- Trade; and
Although e-invoicing is compulsory for all businesses who want to issue an invoice in Vietnam, there is a 2-year transition period which began in November 2018. Therefore, up until 1 November 2020, self-printed invoices or invoices issued by the tax authorities can still be used.
It is also important to note that while invoices can have an additional language on it, it is mandatory that they be written primarily in Vietnamese.
Benefits of the e-invoice system
The implementation of the e-invoice system has already had a positive impact. It has made the process of invoicing more simple and straight forward. It has also reduced administration expenses for many businesses and provides a more efficient means for record keeping. The e-invoice system is further aimed at providing more transparency and minimizing invoice and transaction fraud.
I need to invoice a client in Vietnam
If you need to invoice a client in Vietnam, it may be advised to outsource this process to a partner such as INS Global, as there are various regulations you would need to comply with.
INS Global can invoice your client in Vietnam
INS Global can help you invoice your client in Vietnam. We will assist you in:
- Preparing the invoice for your client;
- Adjusting the invoice to your needs and requirements;
- Processing the payment in the local currency; and
- Issuing proof of payment for you to keep record.
Our service cost is a standard management fee, based on the total amount on the invoice, without any extra withholding costs.
How can INS Global help you?
Whether it be in Vietnam or elsewhere in Asia, INS Global is the premier HR consultancy. Our experts are dedicated to providing our clients with high quality and efficient service. We are able to assist your business with a range of HR queries such as PEO, payroll processing and recruitment among others.