Drawing a bold line under invoicing issue

Invoicing woes, caused by a newly-issued decree, look to be a thing of the past.

According to Decree 51/2010/ND-CP to replace Decree 89/ 2002/ND-CP providing for the printing, issuance, use and management of invoices, the tax authorities will restrict the issuing and selling the invoices designed by the Ministry of Finance (MoF) to enterprises.

Bui Ngoc Tuan, director of taxation for Deloitte Vietnam, said besides the significant administrative procedure reform advantages, potential risks for enterprises were increased costs and complexity.

“Small enterprises often prefer to use invoices published by the MoF due to insignificant demand for invoicing and do not want to invest in invoice printing machines or registration with printing organisations,” he said.

To address the problems, Cao Anh Tuan, director of General Department of Taxation’s (GDT) Tax Policy Department, said under Circular 153/2010/TT-BTC, guiding the implementation of Decree 51, enterprises in regions with especially difficult socio-economic conditions and small enterprises would be allowed to buy invoices from tax authorities issued till the end of 2011.

However, all enterprises will have to execute Decree 51/2010/ND-CP from 2012.

Tuan of GDT said the MoF decided that enterprises would print their name and tax code on invoices without the office address.

In accordance with the value added tax (VAT) and corporate income tax (CIT), invoices issued by decamping enterprises will be disallowed for both input VAT deductibility and CIT deductibility. The list of decamping enterprises and invoices issued by them will be posted up by the GDT.

However, Tuan of Deloitte  said with the new regulations, there would be more invoices from decamping enterprises in the market and it would be difficult for the GDT to update the list of decamping enterprises. “Without a corresponding amendment of the tax regulations, tax payers will face more risks of their actual expenses being rejected by tax authorities,” he noted.

In addition, many enterprises are now concerned they may face challenges from tax authorities in relation to fraudulent invoices which they are unable to verify.

“Therefore, it is important that there are measures for the security of invoices. The procedures for self-printed invoices must be clear,” said Deloitte’s Tuan.

GDT’s Tuan said when issuing invoices, enterprises must report to the tax authority to update their information for its online declaration system which would reduce risks for taxpayers. He said the MoF had sent a document to the prime minister which clearly regulated signs enterprises could use to identify their invoices such as defensive stamps, special printing ink and especially sellers’ signature when issuing invoices.

Currently, the ability for companies to use electronic invoices is a welcome development which is necessary if Vietnam wishes to develop e-commerce. Electronic invoicing is beneficial for companies that have a large volume of low value transactions. There are no guidelines in Decree 51 on electronic invoicing. Therefore, many enterprises proposed there should be one body to regulate and monitor all matters relating to electronic invoices if electronic invoicing is  to become a reality.

“The MoF is drafting a new circular on electronic invoicing to guide enterprises to use electronic invoices. The draft was posted on the MoF’s website to get opinions from relative agencies and are expected to soon come into effective,” said GDT’s Tuan.

Currently enterprises normally must  buy official “red” invoices from the tax authorities or apply for approval to use customised invoices.

Instead, under Decree 51 all enterprises are required to use self-printed invoices in the form of either printed-out invoices from an enterprise’s own machine or printed-out invoices by qualified printing organisations and electronic-invoices under the Law on Electronic Transactions.

“The regulations are a significant improvement in administrative procedures in Vietnam as it will help enterprises to reduce the many time-consuming steps involved in applying to purchase invoices from the tax authorities and avoiding unexpected delays where there is a large demand for invoices or in applying for approval to use customised invoices,” Deloitte’s Tuan said.