E-invoicing: Promoting business households to establish enterprises

Mr. Cao Anh Tuan, Deputy General Director of Taxation answered questions at the press conference.

Not “aim” at small businesses

The Decree No. 119 comes into force on November 1, 2018. According to the provisions of the Decree, if an enterprise or economic organization has notified for issuance of e-invoices without a tax code, or has registered for the application of e-invoices with the tax code before November 1, they are allowed to use available e-invoices from November 1, 2018. For enterprises, economic organizations, business households and individuals that have printed orders or self-printed invoices, or have bought invoices from tax offices for use before November 1, they will be allowed to use those invoices until the end of October 31, 2020, and still have to implement the invoice procedures as prescribed in the Decree: Government Decree 51/2010/ND-CP and Decree 04/2014/ND-CP.

According to Ms. Nguyen Thi Thu Ha, head of the Value Added Tax Department, Policy Department, General Department of Taxation, one of the new points of the Decree is that business households and individuals which are using accounting books, having a turnover of 10 laborers or more and earning an annual turnover of 3 billion VND or more in the fields of agriculture, forestry, fishery, industry and construction must use electronic invoices with the tax office's code.

In addition, business households and individuals earning up to 10 billion VND in turnover in the commercial and service domain must also use electronic invoices with tax office codes when selling goods or providing services, regardless of the value of each sale of goods or services.

According to Ms. Nguyen Thi Thu Ha, business households and individuals that are not required but have accounting books, will be applied electronic invoices with a tax code by the authorities as prescribed if requested.

According to the representative of the Policy Department, the Decree No. 119 stipulates that functional agencies will carry out the pilot implementation of electronic invoices with tax codes generated from a computer for some business households and individuals. These computers will connect and transfer electronic data transfers to the tax authorities. These are business households and individuals doing business in the field of restaurants, hotels, retail pharmacies, retailing consumer goods, providing direct services to consumers in some areas with favorable conditions.

Sharing more information about this issue, Ms. Ta Thi Phuong Lan, deputy head of Personal Income Tax Management Department, General Department of Taxation said that with this regulation, “the people are not too scared”. The application of electronic invoices in Decree 119 does not imply that the tax administration is aiming at small business households with sufficient income to support their families.

According to her, the Decree only focuses on large business households that will have to use e-invoices, accounting books, pay taxes as declared. This is to promote the business households to establish enterprises and avoid the situation of enterprises under the form of business households.

2 years for transition time

In order to facilitate the transition from traditional paper invoices to e-invoices when selling goods and providing services, the Decree No. 119 has regulated the deadline of 24-months (from November 1, 2018 to November 1, 2020) for enterprises to prepare conditions for facilities and people to apply for e-invoices.

According to Deputy General Director of the General Department of Taxation Cao Anh Tuan, this provision means that since the effective date of Decree No. 119, both tax authorities and taxpayers have 24 months to prepare. This is the time to prepare the conditions for facilities (machinery, equipment, information technology infrastructure...) and human conditions.

The leaders of the General Department of Taxation also acknowledged that this is probably the first time that a decree provides a transitional time of up to two years. At present, the General Department of Taxation is carrying out information connection between tax authorities and enterprises nationwide, and at the same time completing information technology infrastructure and technical solutions to ensure the implementation of e-invoices on a large scale.

At the press conference, some wondered that without paper invoices, if the goods being transported are checked, how do taxpayers deal with it? Answering this question, Mr. Luu Duc Huy, Director of Policy Department, General Department of Taxation, said that when inspecting goods circulated on the market, state agencies and authorities will not require paper invoices, they will access the electronic portal of the General Department of Taxation to look up information on electronic invoices.

For the case where the inspectors cannot access the internet because of weak 3G / 4G signal, Mr. Huy said that the Decree also mentioned the case in which a functional force is unable to access the Internet, the cargo carrier, having a hard copy without signatures and seals of the buyer and seller of the goods, will present the paper documents to the State agencies.