Distinguishing between coded and uncoded electronic invoices as mandated by tax authorities

Criteria

Tax-Authorized Coded Electronic Invoice

Tax-Unspecified Electronic Invoice

Define

A tax-issued code is required for an electronic invoice before businesses or individuals sell goods or provide services to buyers. The tax code on the electronic invoice includes the transaction number.

Legal basis: Point a, Clause 2, Article 3 of Decree 123/2020/ND-CP

An electronic invoice issued by an organization selling goods or providing services to buyers without a tax authority code.

Legal basis: Point b, Clause 2, Article 3 of Decree 123/2020/ND-CP

Tax authority code

It is a unique sequence generated by the tax authority's system and a character string encoded by the tax authority based on the information provided by the seller on the invoice.

Legal basis: Point a, Clause 2, Article 3 of Decree 123/2020/ND-CP

Organization providing services

Organizations providing electronic invoice solutions with tax authority codes and without tax authority codes for sellers and buyers; facilitating the connection to receive, transmit, and store electronic invoice data with the tax authority.

Legal basis: Clause 12, Article 3 of Decree 123/2020/ND-CP.

Formatting element

Comprising: Component containing electronic invoice business data, component containing digital signature data, component containing data related to the tax authority code.

Legal basis: Clause 2, Article 12 of Decree 123/2020/ND-CP

Comprising: Component containing electronic invoice business data, component containing digital signature data.

Legal basis: Clause 2, Article 12 of Decree 123/2020/ND-CP

Applicable entities

- Businesses, economic organizations when selling goods or providing services without distinguishing the value of each transaction, except for cases where eligible entities apply invoices without codes.

- Businesses with revenue and labor scale meeting the highest criteria for micro-enterprises as defined by the laws supporting small and medium-sized enterprises, and cases where revenue from selling goods or services can be determined.

Legal basis: Article 1, Clause 3, Article 91 of the 2019 Tax Administration Law

- Businesses operating in the fields of electricity, petroleum, postal and telecommunications, clean water, financial and credit, insurance, healthcare, e-commerce, supermarkets, trade, air transport, road transport, railways, maritime transport, inland waterway transport, and enterprises or economic organizations that have or will conduct transactions with the tax authorities electronically. They must have IT infrastructure, accounting software, electronic invoice generation and inquiry software, and a system to store electronic invoice data as required. They must also ensure the transmission of electronic invoice data to buyers and the tax authorities when selling goods or providing services, without distinguishing the value of each transaction, except in cases of high tax risk as determined by the Minister of Finance, and in cases of registration to use coded electronic invoices.

- Individual businesses or sole proprietors who do not meet the conditions to use coded electronic invoices but still need invoices for customers, or cases where enterprises, economic organizations, or other organizations are allowed by the tax authorities to issue coded electronic invoices to customers. In such cases, the tax authorities will issue coded electronic invoices for each occurrence, and taxes must be declared and paid before the tax authorities issue the electronic invoices for each occurrence.

Legal basis: Article 2, Clause 4, Article 91 of the 2019 Tax Administration Law.

The responsibility of the seller of goods or services in using invoices

- Manage the usernames and passwords of the accounts issued by the tax authorities.

- Create electronic invoices for the sale of goods or provision of services to be submitted to the tax authorities for code issuance and be legally responsible for the legality and accuracy of the electronic invoices.

- Send electronically issued invoices with tax authority codes to the buyer immediately upon receiving the electronically issued invoice with the tax authority code.

Legal basis: Article 21 of Decree 123/2020/ND-CP.

- Manage the usernames and passwords of the accounts issued by the tax authorities.

- Create electronic invoices for the sale of goods or provision of services to be sent to buyers, tax authorities, and organizations providing electronic invoice services. Take legal responsibility for the legality and accuracy of the created electronic invoices.

- Transfer data of electronically issued invoices without tax authority codes to the tax authorities through the Electronic Information Portal of the General Department of Taxation (either directly or through an electronic invoice service provider).

- Store and ensure the integrity of all electronic invoices; comply with legal regulations on ensuring the safety and security of electronic data systems.

- Comply with inspections, audits, and reconciliations conducted by the tax authorities and authorized agencies as stipulated by the law.

Legal basis: Article 22 of Decree 123/2020/ND-CP.