Flash update: Decree 119/2018/ND-CP on E-invoice

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1 September 2018 Tax & Advisory Services Flash update: Decree 119/2018/ND-CP on E-invoice September 2018 Tax update Page 1

2 Decree 119/2018/ND-CP regulated on electronics invoice (E-invoice) for sale of goods and services was issued by the Government on 12/09/2018. We would like to update a few key points in this Decree as follows: SUBJECT OF APPLICATION AND EFFECTIVE DATE TRANSITION GUIDELINES CHARACTERISTICS OF E-INVOICES E-INVOICES WITH AND WITHOUT THE VERIFICATION CODE OF THE TAX AUTHORITIES CONVERSION TO PAPER INVOICES BUILDING DATABASE ON E-INVOICES ORGANIZATIONS PROVIDING SERVICES ON E-INVOICES September 2018 Tax update Page 2

3 SUBJECT OF APPLICATION AND EFFECTIVE DATE The Decree will be applied to all enterprises that were established and are operating under the provisions of Vietnamese laws and will be effective from November 1 st Decree No. 51/2010/ND- CP dated 14/05/2010 and Decree No. 04/2014/ND-CP dated 17/01/2014 issued by the Government regulating on invoices for sale of goods and services will be expired on November 1 st As a result, after 31/10/2020, companies shall use E-invoice for their business operations. TRANSITION GUIDELINES Enterprises which announced the notice on e-invoice issuance with or without the tax authority s verification code before 01/11/2018 would continue using e-invoice. Enterprises which announced the notice on paper invoice issuance before 01/11/2018 would continue using paper invoices until the end of 31/10/2018. Besides, such enterprises must submit Form 03 for detailed list of output invoices by the same deadline of their VAT declaration to the tax authority. Enterprises that newly found in the period between 01/11/2018 and 31/10/2020 shall follow the tax authority s guidelines. Enterprises using e-invoices with tax authority s verification code shall destroy all unused paper invoices at the time they switch to using e-invoices. CHARACTERISTICS OF E-INVOICES E-invoices are issued in a standard format and are subject to the management of the tax authorities via the link to the e-invoice database of the tax department. E-INVOICES WITH AND WITHOUT THE VERIFICATION CODE OF THE TAX AUTHORITIES Enterprises doing business in the fields of electricity; petroleum; posts and telecommunication; air, road, rail, sea, and waterway transportation; clean water; credit financing; insurance; health; e- commerce business; supermarket; commercial and enterprises or economic organizations which have or will conduct transactions with the tax authorities by electronic means and satisfy the conditions for software, data transfer and storage, etc. will apply e-invoices without the verification code of tax authorities For the remaining cases enterprises shall use e-invoices with the verification code of the tax authorities, the seller issues and digitally signs e-invoices on the web portal of the General Taxation Department (GDT) or using services of Taxation- Value Added Network providers (T-VAN) supplying compatible software, data transfer and storage, etc. September 2018 Tax update Page 3

4 CONVERSION TO PAPER INVOICES The conversion of e-invoices into paper invoices is only for the purpose of recording and monitoring in accordance with the Law on Accounting and is NOT valid for executing transaction or payment. For goods in transit, authorities or authorised persons can access the Web Portal of the GDT for detail information. BUILDING DATABASE ON E-INVOICES The tax authorities will be responsible for building, collecting, processing, and sharing data of e-invoice for related organizations. ORGANIZATIONS PROVIDING SERVICES ON E-INVOICES E-invoices would be provided free of charge to small, medium enterprises, households, private business as regulated. General Tax Department s e-invoice verification code providing system automatically issue e-invoice code and send code results to sender. Eligible organizations operating in information technology field are allowed to provide e-invoices services. September 2018 Tax update Page 4

5 Contact Please contact the below EY professionals from Ernst & Young Vietnam Limited for more information on this update or our Tax & Advisory Services: Ha Noi Office Huong Vu Trang Pham Nhung Nguyen Executive Director Japanese Business Services Junichi Harada Korean Business Services Manager EY Assurance Tax Transactions Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com Ernst & Young Vietnam Limited. All Rights Reserved. VN No ED None Kyung Hoon Han kyung.hoon.han@vn.ey.com Ho Chi Minh Office Robert King robert.m.king@vn.ey.com Thinh Xuan Than thinh.xuan.than@vn.ey.com Phat Tan Nguyen phat.tan.nguyen@vn.ey.com Thy Anh Huynh thy.anh.huynh@vn.ey.com Japanese Business Services Takahisa Onose takahisa.onose@vn.ey.com Korean Business Services Cheon Ju Lee cheon.ju.lee@vn.ey.com Manager Director This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax or other professional advice. Please refer to your advisors for specific advice. ey.com September 2018 Tax update Page 5