Through this new portal, foreign cross-border businesses will be able to pay their taxes directly instead of relying upon a third party. The Vietnamese government also seeks to address the shortfall in tax collection, particularly from foreign businesses on Vietnam-sourced income.

One of the key points of this Decree is the temporary reduction on the standard VAT rate:

• The VAT for goods and services is reduced from 10% to 8%.
• This change will be effective from 1 February 2022 to 31 December 2022.

The following are some noteworthy points from the circular:

• For business using e-invoice without verification code, the e-invoice data must be transmitted to the tax authority within the date the e-invoice is sent to the buyer at the latest, except for certain sectors such as telecommunication, insurance, banking, air transportation, securities, etc.
• If an enterprise uses e-invoices without verification code and would like to switch to e-invoices with verification code, they should follow the guidelines outlined in Article 15 of Decree 123/2020.
• When an e-invoice has errors that must be corrected or replaced, buyer can choose to notify the amendment for each e-invoice with errors or for multiple e-invoices with errors using a prescribed form. This form must be submitted to the tax authorities by the last day of the VAT declaration period.

From July 2022, paper and PDF invoices no longer qualify as valid tax invoices. Under the mandate, the e-invoice must be in XML format, include a digital signature and be securely stored for ten years. In addition, Invoices need to be in Vietnamese language; a second language is allowed. The second language needs to be placed in brackets next to the Vietnamese texts or under the Vietnamese texts using a smaller font.

There will be two types of e-invoices: the e-invoice with tax verification code and e-invoice without tax verification code. The process with the tax verification code is so -called pre-clearance where invoice data must be submitted to the tax office (GDT- General Department of Tax). Upon registration and approval of the invoice data, the tax office returns a specific code that needs to be included in the invoice that is sent to the buyer. The requirement to add a tax verification code to the invoices depends on the taxpayer’s business sector, tax risk, and annual revenue.

To use either type of e-invoice in Vietnam, companies must register and receive approval from the Vietnamese tax authorities via the website of the General Taxation Department.