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Mandatory e-invoicing coming to Vietnam

E-invoicing will become mandatory in Vietnam on 1st July this year, ending a decade-long scheme by the country’s government to find a solution to reduce VAT fraud.

The introduction of compulsory e-invoicing was originally scheduled for July 2020 but was postponed. In October 2020, it announced a new date of July 2022 for the implementation of the new regulations, which coincide with the arrival of new laws concerning the e-invoicing system envisaged in the Law on Tax Administration.

Regional tax administrations in Ho Chi Minh City, Hanoi, Quang Ninh, Hai Phong and Phu Tho will receive support from Vietnam’s General Taxation Department to implement technical solutions that will allow them to meet the new e-invoicing regulations.

From April, the new e-invoicing system will be rolled out across all remaining cities and provinces in the country.

By July, all businesses will be in a position to connect with their local e-invoicing system and therefore comply with the rules established in Decree 123.

What do businesses need to do?

Businesses registered for VAT in Vietnam will need to provide all invoices in electronic format for transactions from 1st July 2022. Any company that has yet to register for e-invoicing should do so with their local tax administration.

There is still work to be done to ensure the technical implementation of e-invoicing goes smoothly, but one thing is clear: Time is running out for businesses still relying on manual processes to issue invoices.

The importance of tax in e-invoicing

The digitisation of revenue authorities around the world continues at pace. Dozens of countries have now implemented mandatory e-invoicing; either for B2G transactions or for all transactions.

What’s more, many more nations are expected to adopt e-invoicing in the coming years.

The only way to ensure e-invoices are populated with entirely accurate and real-time tax data is to automate the determination and calculation of tax.

In recent years, some revenue authorities have confirmed they are using e-invoices to conduct data-matching exercises, with the aim of validating the amount of VAT reported by both the supplier and buyer in a transaction matches the amount collected and paid.

Businesses can therefore be certain that scrutiny in this area is increasing rapidly and that non-compliance is more likely to be uncovered and punished than ever before.

For more information on how a bespoke automated tax solution could ensure accuracy and compliance in your organisation’s tax reporting, get in touch with our team today.

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