Earlier this year, Vietnam issued Decree 123/2020/ND-CP postponing the implementation of electronic invoices (e-invoices) in Vietnam to July 1, 2022, nullifying the November 2020 deadline stated in the previous Decree 119/2018.
Digitalization and Economic Growth
The application of e-invoices on a national scale represents the Vietnamese Government's determination to create a convenient business environment for domestic and foreign companies. Reducing the tax compliance burden is one of the country’s strategies to streamline the country’s tax system and facilitate the ease of doing business in Vietnam.
As per the 2020 World Bank’s Doing Business report, getting credit and paying taxes were the two main contributors to Vietnam’s economic growth. In 2020, Vietnam ranked 70th among 190 economies in terms of ease of doing business.
Delayed Implementation of E-Invoices in Vietnam
Even though the use of e-invoices brings many benefits to businesses including an increase in transparency and elimination of transactional risks and corruption, many domestic companies encountered difficulties with their implementation and meeting the 2020 deadline.
Currently, taxpayers can continue to use any self-printed, pre-printed, or electronic invoices purchased from the General Department of Taxation (GDT) before October 2020. These invoices will remain valid until 30 June 2022. However, the regulation encourages all taxpayers to switch to electronic invoices and documents before the 2022 deadline.
In order to issue e-invoices, organizations and companies that provide goods and services must first register on the General Department of Taxation website. After the approval, taxpayers can start to issue one of the two types of electronic invoices based on their field of business operation:
invoices with an identification code from the GDT
invoices without the GDT verification code
Exceptions to the 2022 Deadline
Decree 123 also establishes several exceptions to the new timeline. Firms that meet the following scenarios will be required to implement e-invoices before its official deadline.
Businesses incorporated during the transition period (between 19 October 2020 and 30 June 2022), if received a notice from GDT.
Businesses that receive a notification from the government (e.g., if they run out of printed GDT-issued invoices) will be required to implement the use of e-invoices based on the timeframe given by the tax department.
Benefits of E-Invoicing in Vietnam
Generally speaking, the sooner you can implement electronic invoices in your business, the better. The adoption of e-invoices not only saves time and administration expenses, but also:
minimizes risks of wrong transactions,
eliminates frauds and corruption,
provides transparency,
simplifies the tax burden,
increases customer satisfaction,
reduces operational costs.
Even though the application of e-invoicing is a relatively fast process, some companies may face difficulties switching from paper invoices. Therefore, it is necessary to begin to familiarize with the system and understand new changes, allowing a smoother transition to e-invoices.
Implementation of E-Invoices in Your ERP System
Companies that use ERP systems for their processes are recommended to integrate e-invoicing into their systems. Thanks to the integration, electronic invoices can be generated within a few seconds without even leaving the company’s internal system.
Port Cities in Vietnam is a world-leading Odoo implementation partner awarded as Best Odoo Starter in the Asia-Pacific region. Our ERP implementations are tailored to our clients’ needs, and e-invoicing is one of the most popular localization applications we implement for Vietnamese businesses.
Want to issue electronic invoices in a few clicks? Contact us for more information.