E-invoice: Synchronize data between businesses and tax authorities

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Decree 119/2018/ND-CP regulates e-invoice when selling goods and providing services. Photo: Internet.

One of the biggest goals of Decree 119 is the database construction. According to Decree 119, the General Department of Taxation is responsible for construction, management and development of database and technical infrastructure of invoice information system; collecting and processing information, managing invoice database and ensuring the maintenance, operation, security and safety of the invoice information system. The Decree also stipulates that the General Department of Taxation coordinates with relevant agencies, organizations and individuals for information exchange and online connection.

Besides the tasks of the General Department of Taxation, Decree 119 also stipulates the responsibility for sharing and connecting information and data with businesses. Accordingly, businesses and organizations engaged in production and trade in fields of: Electricity, Petroleum, Post and Telecommunication, air, road, rail, sea and water transport, clean water, credit finance, insurance, health, e-commerce business, supermarket business and trade, shall use and provide e-invoices in accordance with provisions of the Ministry of Finance.

Notably, Decree 119 also stipulates that credit institutions, commercial banks and organizations which have periodic payment functions shall provide electronic data on payment transactions through organizations’ and individual’s accounts to the Tax agencies in accordance with the standard data format prescribed by the Ministry of Finance. At the same time, organizations producing and importing special consumption taxable products that are subject to the use of stamps in accordance with the law, shall provide information on printing, use of stamps and e-stamps with tax administration agencies. Information on printing and use of e-stamps is the basis for setting up, management and building of e-invoice database. Decree 11 also stipulates that the Ministry of Finance shall guide the printing, use of stamps and using revenue for providing stamps to offset the cost for printing and using stamps.

Decree 119 provides that organizations and agencies such as Vietnam Directorate of Market Surveillance, General Department of Land Administration, General Department of Mineral Resources, the Police, Transport, Health and other relevant agencies shall connect and share information and data under their management fields with the General Department of Taxation to develop building an e-invoice database.

Normally, the time for the Tax authority to respond to the invoice comparison result is 10 working days. However, when a business uses e- invoices, invoice information of the business shall be continuously gathered at the tax authority, so that the Tax authority can immediately obtain information on the turnover and daily expenses of the business and promptly detect abnormalities when the business issues invoices.

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In addition to the above benefits, the use of e-invoices also promptly supports the prevention of invoices from businesses which have vacated and missing from their registration address, so as to prevent fake invoices, and for creating a transparent business environment for businesses and promoting the development of e-commerce. At the same time, the use of e-invoices will contribute to environmental protection and for removing the illegal use of invoice and making of fake content in invoices.

It can be affirmed that the use of e-invoices not only helps businesses and taxpayers to reduce tax compliance costs, but also helps tax authorities and other authorities for good performance of their state management functions. For Tax authorities, the use of e-invoices shall help the Taxation sector to build an invoice database. When all businesses deploy e-invoices, the Tax sector will have an invoice database, thereby effectively serving for the inspection, examination, tax refund and risk analysis of trading businesses and individuals.