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Circular No. 68/2019/TT-BTC (Circular 68): guidelines on some regulations of Decree No. 119/2018/NĐ-CP (Decree 119) about e-invoice

On 30^th September 2019, the Ministry of Finance issued Circular 68, which gives guidelines on some articles of Decree 119 about e-invoice. We highlighted some prominent contents from this Circular as follows:

From 1^st November 2020, all business entities as well as individual businesspeople must apply e-invoice, instead of using paper invoice.

The Circular states the list of information which are included in the e-invoice. Also, in some specific cases, one or several information of the e-invoice can be omitted.

Time for issuing e-invoice is when the ownership or using right of goods is transferred to the buyers; or when the service rendering process is completed irrespective of whether the payment is made or not.

In case the goods or services are delivered or rendered to clients in multiple times, e-invoice should be issued for each time, based on the volume of goods or services delivered or rendered to clients.

This Circular details 7 cases in which the tax office stops providing the identification code for e-invoice. Moreover, it gives guidelines on handling e-invoice containing errors in several specific situations.

Circular 68 comes into force on 14^th November 2019.

From 14^th November 2019 to 31^st October 2020, the following regulations are still in force: Circular No. 32/2011/TT-BTC, Circular No. 191/2010/TT-BTC, Circular No. 39/2014/TT-BTC (amended and supplemented by Circular No. 119/2014/TT-BTC, Circular No. 26/2015/TT-BTC); Decision No. 1209/QD-BTC dated 23^rd June 2015, Decision No. 526/QD-BTC dated 16^th April 2018; Decision No. 2660/QD-BTC dated 14^th December 2016; Circular No. 37/2017/TT-BTC.

Official Letter No. 19490/CT-TTHT (OL 19490): issuance of VAT invoice for payment or receiving on behalf of clients

On 5^th August 2019, Binh Duong Department of Taxation issued OL 19490, which handles the case that a company has a contract with a client, and the contract states that the company has some payment on behalf of the client. When receiving the payment, the supplier should issue VAT invoice containing name and tax code of the client (not the company). The company shall not declare and deduct VAT input for these VAT invoices. When the client pays back to the company, the company does not need to issue invoice, but must prepare receipt vouchers as regulated by law.

If the supplier issues VAT invoice using name and tax code of the company (not the client), the company shall ask the supplier to retrieve the invoice and re-issue new invoice containing information of the client. In case the company and the supplier do not retrieve the issued invoice, the company must issue VAT invoice containing name and tax code of the client when receiving the payment back from the client. The company shall declare input VAT for the invoice received from the supplier, and output VAT for the invoice issued to the client.

Official Letter No. 73973/CT-TTHT (OL 73973): PIT treatment on income paid to specialist

According to OL 73973 issued on 24^th September 2019 by Hanoi Department of Taxation, PIT treatment for income paid to a specialist who signs a service contract with a company to provide consulting service is regulated as follows:

In case the specialist is a businessperson (he/she already registered for providing the service mentioned in the service contract with the competent authority), he/she must declare and pay PIT to the tax office and then issue invoice to the company (in case the annual revenue of the specialist is over VND 100 million), according to Circular No. 92/2015/TT-BTC. On the other hand, the company shall prepare the list of goods and services purchased without invoice using form 01/TNDN (in case the annual revenue of the specialist is equal to or less than VND 100 million) according to Article 4, Circular No. 96/2015/TT-BTC.

In case the specialist is not a businessperson, the company shall withhold PIT with tax rate of 10% over the income before paying to him/her for each payment over VND 2 million, according to regulation stated at Article 25, Circular No. 111/2013/TT-BTC.