Vietnam Makes E-Invoicing Mandatory

Victor Duarte
February 13, 2020

Whilst Vietnam has allowed the issue of electronic invoices since 2011, this has not proved popular with domestic businesses.  This is mainly due to the lack of an efficient framework for commercial processes and the technical capabilities required to issue e-invoices compliantly.

During the last decade, the Vietnamese government has developed a more robust legal framework for the issue of e-invoices, making adoption of an automized system for invoicing purposes more attractive for domestic companies. As the government takes steps to reduce its VAT gap and to make invoicing more transparent, it has approved legislation to mandate e-invoicing nationwide.

From 1 November 2020, companies operating in Vietnam must issue e-invoices following not only the rules established by the law but also in compliance with the technical parameters required by the General Department of Taxation (GDT).

Legislation scope

Most companies established and operating in Vietnam are affected and will need to comply. The legislation includes organizations, enterprises, households and individuals that sell goods and provide services; public non-business units; limited liability companies; partnerships; private enterprises; tax administration agencies at all levels and organizations and individuals involved in the management, registration and use of invoices, among others.

Providing e-invoices

The process of issuing e-invoices will depend on the type of e-invoice the businesses are obliged to use for their operations. The legislation permits two types of e-invoices, with or without a so-called verification code that can only be obtained by sending invoice data to the GTD prior to sending the invoice to the buyer.

1. E-invoices without a verification code

This type of e-invoice must be issued by taxpayers operating in certain defined sectors e.g. telecommunications, petroleum, electricity, transportation, credit financing, insurance, e-commerce, trading, and supermarket sectors. These companies operating in Vietnam must be registered to use this type of e-invoice.

2. E-invoices with a verification code

These apply to other defined sectors e.g. forestry, agriculture, and fishery. For construction companies, the number of employees and the annual turnover are factors that must be considered to assess whether this type of e-invoice must be used.

This e-invoice requires a unique code issued by the tax authority before an organization or individual selling goods or providing services can send it to the buyer.  Therefore, the invoice data must be sent to the GDT to obtain the code to be included in the valid e-invoice, i.e. a form of clearance system.

Transition period

It’s important to highlight that currently, Vietnamese taxpayers are under a transition period until 1 November 2020, to develop and deploy a compliant invoicing solution or use a third-party service provider. However, the GDT may require companies established in Vietnam between November 2018 and October 2020 to start issuing e-invoices immediately. This is a prerogative of the tax authority that new enterprises in Vietnam must consider.    

This legislation furthers Vietnam’s plans to reduce fraud and close its VAT gap and modernize its tax regulation by replacing traditional paper with electronic invoices.  It places the country ahead of others in the region in digitizing tax controls but others, including Thailand and China, will be close behind.


Take Action

To find out more about what we believe the future holds, download Trends: Continuous Global VAT Compliance and follow us on LinkedIn and Twitter to keep up-to-date with regulatory news and other updates.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.


Victor Duarte

Victor is a Regulatory Counsel at Sovos TrustWeaver. Based in Stockholm and originally from Venezuela, he obtained a Law degree and a specialisation degree in Tax Law in his home country. Victor also earned a Master´s degree in European and Internal Tax Law from Lund University in Sweden.
Share This Post

LATAM VAT & Fiscal Reporting
May 20, 2020
Sovos Acquires Taxweb, Extends Tax Determination Capabilities in World’s Most Challenging Compliance Landscape

Earlier this month Sovos announced its second acquisition of 2020, completing our solution for Brazil with an unparalleled offering that solves tax compliance in the place where it is most challenging to do so.  Too many companies doing business in Brazil have been burdened by managing multiple point solutions for continuous transaction controls (CTCs), tax […]

EMEA VAT & Fiscal Reporting
August 4, 2020
New VAT Rules for Online Marketplaces and Imports of Goods into the UK

The United Kingdom’s HMRC has issued new guidance on the VAT treatment of cross-border sales of goods and online marketplaces beginning 1 January 2021, following the end of the transition period. Cross-Border Sales under £135 New rules will apply when a business sells goods for £135 or less to a UK customer and the goods […]

EMEA VAT & Fiscal Reporting
August 3, 2020
New EU Tax Package: VAT Priorities

On 15 July 2020, the European Commission (EC) adopted a new Tax Package, intended to increase tax compliance while reducing administrative burden on businesses. The Tax Package contains a number of proposals related to VAT, of which three in particular stand out: A single EU VAT registration for taxpayers; Modernized VAT reporting obligations; and Facilitated […]

August 3, 2020
Should Insurers Receive an IPT Holiday From Their Governments?

It’s been a tough year for businesses. Whilst many have accepted that 2020 is likely to be a year to forget, unfortunately tax still needs filing and paying. Tax authorities have been understanding – nobody could have foreseen this – and there has been a concerted effort to provide SMEs with tax relief and postponements […]

Asia Pacific E-Invoicing Compliance EMEA India
July 31, 2020
India: Last-Minute Changes to the Proposed E-Invoicing System

The October deadline is fast approaching for the Indian CTC invoicing mandate, but it remains a moving target. In a swift move that was published just two months prior to go-live, authorities have now changed the scope of who is affected by the reform, as well as updated the JSON format. Why the change? The […]

ShipCompliant United States
July 30, 2020
2020 DtC Wine Shipping Mid-Year Report

Since we released the annual Direct-to-Consumer Wine Shipping Report in partnership with Wines Vines Analytics back in January, a lot has changed when it comes to how consumers are getting their wine. The COVID-19 pandemic swayed buying channels drastically, shifting traditional retail and on-premise sales over to ecommerce sales. With brick-and-mortar retailers being closed down […]