E-Invoicing and E-Procurement Regulations in Vietnam

The Vietnamese government has implemented a mandatory e-invoicing and e-procurement system from July 1, 2022. It is crucial for your business to develop an infrastructure that is aligned with the legal framework set by the authorities.

The new regulations mandate that all businesses, excluding household businesses or individuals, must issue an e-invoice with or without the tax verification code to sell their goods or services to any buyer.

With this new regulation in place, it can be difficult for businesses to develop infrastructure that is compliant with legal standards. In this article, we will take a closer look at the new e-invoicing and e-procurement system in Vietnam and understand some of its nuances.

Please schedule an appointment today with Dolf Kars, our global e-invoicing manager. We can work closely with your business to offer you an e-invoicing solution that is fast, easy, and secure.

Important: As of October 2023, for this country we are still looking for a Beta tester. As a token of our gratitude for being a first Beta tester, Storecove offers the first year of connection for free. Contact us for more information on becoming our official tester.

Are e-invoicing and e-procurement mandatory in Vietnam?

Vietnam has mandated businesses to implement the e-invoicing system from July 1, 2022. The Ministry of Finance issued a circular called Circular 78 that includes the guidelines for implementing e-circulars.

The main purpose of implementing the e-invoice system is to crack down on invoice fraud and encourage businesses to contribute toward the drive to digitalize.

The Government started the pilot implementation of the system in some provinces in November 2021. It gave ample time for businesses to set up the necessary infrastructure to implement the use of e-invoicing. From July 1, 2022, the Government has mandated all enterprises to shift to the new e-invoicing system.

The Government of Vietnam recognizes two types of e-invoices- one with the tax authority’s verification code and another without the code. The kind of e-invoice required depends on the business's sector. For instance, companies operating in the following sectors can use e-invoices without tax verification codes:

  • Electricity
  • Telecommunication
  • Credit Financing
  • Transportation
  • Petroleum

Also, enterprises that interact directly with the tax department or already have the infrastructure, including accounting and e-invoicing software, don’t have to use e-invoices with verification.

Businesses in the following sectors must, however, use e-invoices with verification codes:

  • Agriculture
  • Fishery
  • Forestry
  • Industry and Construction

Similarly, businesses in the high tax-risk category that employ more than ten laborers or have annual revenue of over VND 3 billion (US$ 130,000) must use e-invoices with verification codes.

Characteristics of the electronic invoice in Vietnam

The technical requirements of an e-invoice are elaborated in the Ministry of Finance’s Circular N° 68/2019 / TT-BTC. According to the circular, all e-invoices issued by any Vietnam business must be in XML format, have a digital signature, and be archived securely for ten years.

Businesses must also transmit the data in the e-invoice directly or through an authorized service provider to the taxation department.

The e-invoicing provider in Vietnam must also comply with financial, technical, and legal requirements of the Government agencies and the tax authority. The companies must also be registered with the General Department of Taxation (GDT) and carry the tax authority's approval. It is also mandated that the companies should use an authorized service provider.

Some of the technical requirements for a service provider for e-invoicing include the following:

  • The service provider must ensure 24X7 connectivity with the GDT
  • The provider must also have multi-device support from computers to tablets and smartphones
  • There should be world-class digital security

Benefits of e-invoicing for businesses in Vietnam

Businesses and enterprises in Vietnam stand to gain a lot from adopting an e-invoicing system. Some of the key benefits that companies can see include the following:

Cutting down the transportation expenses

As there is no need to transport paper invoices, e-invoicing can save much money for businesses on transportation.

Reducing administrative expenses

E-invoicing is a much more straightforward software-based process. It requires fewer people to accomplish and takes up significantly fewer resources.

Minimizing transaction fraud

E-invoicing is one of the best ways to reduce transaction fraud. Countries that have endorsed e-invoicing have significantly reduced cases.

Improving system transparency

With e-invoicing, the system will become much more transparent. It will also improve the accountability of the various stakeholders.

Scale down the operation cost significantly

The biggest benefit of the e-invoicing system for businesses is the reduction in operation costs. As businesses save on invoicing, their profitability will increase, making e-invoicing the way to a better future.

Sending paper invoices by post is quite expensive in Vietnam. For instance, a company sending out about 200 invoices a month can incur US$100 in addition to the delivery charges that can vary between US$100 to US$200.

The e-invoicing system, on the other hand, can be a lot cheaper for businesses. For instance, under the new system, you will need to spend only US$15 for 300 invoices, with zero cost in delivery or additional charge. Consequently, businesses can save as much as 90% on invoicing costs with the new system.

According to the government figures, this translates to over VND 1 trillion savings, with approximately 2.5 billion e-invoices invoices sent yearly once the system is in place. The Government has also created several incentives to help people adapt to the new e-invoicing system.

It is the best time for companies and businesses throughout the country to embrace the new e-invoice mandates. That said, significant challenges exist in shifting an entire country’s businesses from paper to e-invoice. With proper compliance and implementation, Vietnam can join the ranks of the United States and the European Union by embracing the new change.

How to send and receive compliant e-invoices in Vietnam

Businesses in Vietnam must register with the Government before using the e-invoice system. Once the tax authorities approve your registration application, you can start using the system. You can apply for registration through the website of the General Department of Taxation.

If you are using a point of sale (POS) system, you must register as well so that the invoice is sent by the POS system online to the tax department.

Another point to be noted here is that the language of the e-invoice must be Vietnamese.

Here is what you need to do to register your business for filing e-invoices:

  • Your business must be registered with the GDT according to the Form number 01/DKTD.
  • You should also obtain an e-signature that is approved by the GDT
  • Once you register, you must send a sample invoice to the GDT for approval
  • If you wish to send a PDF copy to the buyer, along with the XML file, you must get the PDF approved from the GDT as well

Once you get the permission from the GDT, you can start issuing the invoices in the XML format. You can exchange these files with your customers via email.

If your business falls under a category that requires verification codes from the GDT, you are required to obtain them from the authorities before sending out the invoice to your customer.

Here at Storecove, we have a team of expert e-invoicing managers with years of experience in developing custom solutions for thousands of businesses worldwide. We can help you make sense of the evolving landscape of the e-invoicing system in Vietnam.

Wrapping up

E-invoicing in Vietnam is here to stay. Businesses all over the country stand to benefit from the bold new move from the Government. It is important that companies quickly adapt to the new system to avoid any penalties or issues with the GTD.

Here at Storecove, we can help businesses like yours by building a custom solution compliant with the taxation authority. Having helped businesses in over 37 countries globally, Storecove - on request - can help businesses in Vietnam.

Please schedule an appointment today with Dolf Kars, our global e-invoicing manager. We can work closely with your business to offer you an e-invoicing solution that is fast, easy, and secure.

More information about e-invoicing in Vietnam?

Contact us for more information or schedule a consult with one of our e-invoicing experts.

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