Improving efficiency of using and managing e-invoices in conditions of industrial revolution 4.0

The article studies the current situation of using e-invoices in economic transactions in general and e-commerce transactions in particular in order to make suggestions for improving the efficiency of using and managing e-invoices in current conditions.

In recent years, electronic invoices have been used by many businesses for many benefits. According to the Law on Tax Administration 38/2019/QH14 recently passed by the National Assembly, businesses must use electronic invoices. This policy benefits businesses and improves the transparency of tax authorities' monitoring and controlling of economic activities. Although the State has issued many policies to encourage businesses to use e-invoices (such as the issuance of Decree 119/2020 stipulating the mandatory use of e-invoices from November 1, 2020 and Decree 123/2020/ postponing the mandatory time limit for using e-invoices to July 1, 2022), the number of businesses using e-invoices is not high.

This is due to many reasons such as the psychology of customers (when buying goods and services, consumers want to get paper invoices instead of getting files online), the fear of businesses when using e-invoices may reveal business secrets and cause technical problems in the use of e-invoices. This article focuses on studying the current situation of using e-invoices, pointing out and analyzing the shortcomings, thereby making specific recommendations to improve the efficiency of using and managing e-invoices in Vietnam today.

Actual situation of management and use of e-invoices in Vietnam

Policies and regulations on management of e-invoices in Vietnam

* The use of e-invoices must comply with legal regulations under the 2015 Accounting Law as well as the Government's Decree 174/2016/ND-CP (detailing the Law on Accounting) that creates the first legal basis for the application of electronic invoices

- For preparing electronic accounting vouchers: According to Article 17 of the Law on Accounting 2015, electronic vouchers are considered accounting vouchers if they contain the following: name and number of the accounting voucher; date, month and year of making accounting vouchers; name and address of the agency, organization, unit or individual making the accounting voucher; name and address of the agency, organization, unit or individual receiving the accounting voucher; content of arising economic and financial operations; quantity, unit price and amount of economic and financial operations recorded in numbers; total amount of accounting vouchers used for money collection and payment, written in numbers and words; signatures, full names of the makers, reviewers and people related to the accounting vouchers; and other contents according to each type of document.

Therefore, e-invoices must be made on the basis of fully complying with the above provisions in accordance with Article 17 of the Law on Accounting 2015.

In addition, Circular 110/2015/TT-BTC dated July 28, 2015 of the Ministry of Finance guides electronic transactions and electronic documents in taxation. Tax is information created, sent, received and stored electronically to carry out the procedures of tax registration, tax return, tax payment, tax refund and information search of taxpayers, notices of tax authorities to taxpayers.

- For preserving, storing and providing accounting information and documents: According to Decree 174/2016/ND-CP of the Government, the accountant must print documents prepared electronically on paper, sign for certification and stamp (if any) to provide to state agencies (if needed). Therefore, the legal representative of the accounting unit must decide on the preservation and storage of e-invoices to ensure safety, completeness, and confidentiality and provide information at the request of the State agencies.

- There must be electronic signatures on e-documents. Signatures on electronic documents are as valid as signatures on paper ones. According to Decree 174/2016/ND-CP dated 30 December 2016 of the Government detailing the Law on Accounting, electronic signatures are allowed to be used in accounting work.

Thereby, an electronic signature is created in the form of words, letters, numbers, symbols, sounds or other forms by electronic means, associated with or logically associated with data messages. It can confirm the person who signed the e-invoice and his acceptance of the information in that e-invoice.

* Particularly for e-invoices, the use of e-invoices is increasingly popular in commercial transactions and becomes an inevitable trend in the context that information technology is increasingly being applied in many countries. Therefore, the State has formed a synchronous and increasingly complete legal framework to create a legal basis for electronic transactions in general and the use of e-invoices in particular, such as the original Law on Electronic Transactions enacted in 2005 (the Law on Accounting 2015).

- Decree No. 51/2010/ND-CP dated May 14, 2010 issued regulations on e-invoices, according to which, invoices are documents created by sellers, recording information about selling goods and services as required by law.

- Circular No. 32/2011/TT-BTC dated March 14, 2011 guiding the creation, issuance and use of e-invoices for selling goods and providing services. Officially applied in our country since 2011.

- Decision No. 1209/QD-BTC dated June 23, 2015 issued by the Ministry of Finance during the implementation of e-invoices, which stipulates the pilot use of e-invoices with verification codes of tax authorities when selling goods and providing services to businesses.

- Decision No. 2660/QD-BTC issued by the Ministry of Finance on December 14, 2016 on extending the implementation time of Decision No. 1209/QD-BTC.

- Decree No. 119/2018/ND-CP of the Government dated September 12, 2018 detailing the scope and subjects of the application of e-invoices, which is considered an important legal basis for promoting the e-invoice process in Vietnam. Thereby, businesses are required to use electronic invoices from November 1, 2020 when selling goods and providing services.

- Decree No. 123/2020/ND-CP replaces Decree No. 119/2018/ND-CP with some new points more suitable to the requirements of the Law on Tax Administration No. 38/2020/QH14 dated 15 July 2020 on expanding the scope of application and improving the process of managing receipts and documents by electronic method.

In addition, in order to strictly manage the preparation and use of e-invoices, Decree 123/2020 also stipulates the responsibilities of enterprises, taxpayers and ministries and branches in sharing and connecting information.

Thereby, enterprises and economic organizations producing and trading in the fields of electricity, petroleum, post and telecommunications, clean water, insurance, healthcare, e-commerce business, etc., make electricity bills and provide electronic invoice data in the data format announced by the General Department of Taxation. Credit institutions and payment service providers shall provide electronic data on payment transactions via accounts at the request of tax authorities. Organizations and units such as market management, General Department of Land Management, public security agencies, traffic connect and share relevant information and data necessary in the field of management with the General Department of Taxation to build databases of electronic invoices.

Actual situation of using e-invoices in Vietnam

According to the Ministry of Finance, by June 30, 2022, there were 851,372 organizations, enterprises and branches nationwide (reaching 100% of the total number of organizations and enterprises) which registered to use invoices. In addition, 65,576 business households and individuals doing business according to the declaration method have registered and started to use electronic invoices (e-invoices) according to Decree No. 123/2020/ND-CP and Circular No. No. 78/2021/TT-BTC. The number of e-invoices issued was 536,627,159.

Specifically, in the second phase of implementing e-invoices, there are 57 provinces and cities where the number of organizations, enterprises and branches that have successfully registered on the e-invoice system is 377,484 units, reaching 100 %. Business households using the declaration method have registered and converted to use e-invoices according to Decree No. 123/2020/ND-CP and Circular No. 78/2021/TT-BTC phase 2 in 57 provinces, the city is 42,701 business households and individuals. The total number of invoices received and processed by 57 Tax Departments is 109,332,248 invoices. Previously, in phase 1, the General Department of Taxation completed the pilot implementation of the e-invoice system in six provinces and cities: Hanoi, Ho Chi Minh City, Binh Dinh, Quang Ninh, Hai Phong and Phu Tho.

According to the plan, from July 1, 2022, all businesses, business households and individuals doing business by the declaration method using invoices must switch to using electronic invoices. The implementation of e-invoices has been contributing to promoting digital transformation at businesses, digital transformation for financial agencies, as well as in other State agencies. The implementation of e-invoices will contribute to transforming the way of serving people, management and organization of the tax authorities in the direction of automation, in order to reform administrative procedures, facilitate and reduce costs and increase business productivity.

Challenges in managing and using e-invoices

The subjects eligible to use e-invoices are very wide, including economic organizations conducting electronic transactions with tax authorities; economic organizations using electronic transactions in banking activities. Although e-invoices have many such utilities, in fact the use of e-invoices still meets challenges and difficulties.

In order to use e-invoices, the above subjects must have information transmission lines and communication equipment meeting the requirements of controlling, processing, using, preserving and storing electronic bills; have a team of qualified human resources. In addition, enterprises must have procedures for backing up, restoring and storing data when the system has problems.

In the current information technology era, it is not difficult to meet the above conditions, but it is the fact that the number of businesses using e-invoices is not high.

This comes from many reasons such as the psychology of customers (when buying goods and services, consumers want to get paper invoices instead of getting files online), the fear of businesses when using e-invoices may reveal business secrets and cause technical problems in the use of e-invoices. Enterprises do not want to use electronic invoices when delivering goods because State agencies and police still require businesses to issue paper invoices.

The cause of the limitations

Current difficulties when implementing e-invoices include:

* On the side of users of e-invoices:

- Customs and habits: Customs and habits of Vietnamese people and businesses are the reasons. Vietnamese businesses have used paper invoices for many years. With just a pen and an invoice, they can sell goods to buyers. When transporting goods, buyers only need to bring the purchase invoice for inspection by the authorities. Invoices written incorrectly can easily be exchanged for another invoice.

It has become so common and convenient for both the seller and the buyer. Therefore, it is extremely difficult for them to change one form of transaction with another. Businesses often face many difficulties in explaining to customers what an e-invoice is and its legality.

- Knowledge of information technology: In addition to changing habits, users of e-invoices also need knowledge and understanding of information technology, which they do not understand much (especially with small, micro enterprises or business households). Many small and micro enterprises and Vietnamese business households have low starting points, fragmented small businesses, low level of special knowledge about information technology, poor quality of human resources, especially the quality of directors, business owners have little basic training, and knowledge is still limited. When they do not understand, they are afraid and do not want to change. This is also a barrier limiting the application of management methods by information technology in production and business activities.

* On the side of the e-invoice issuer:

- When applying e-invoices, the unit must take the initiative in creating and issuing invoices; simplify the issuance and management of invoices; simplify tax declaration procedures and use of invoices; invoices carry more information and typical images of the unit.

- Cost for initial investment: The cost for initial investment is also difficult. To deploy and use e-invoice vouchers, you must have computers, network equipment, transmission line services and many other costs. The application of e-invoices requires good technical infrastructure, but not all units are ready to meet the requirements of information technology - telecommunications infrastructure. There are not many enterprises providing e-invoice services with sufficient scale and capacity to provide services on a large scale, from big cities to districts and communes continuously, regularly, and most often. in remote areas, etc. Besides, the use of e-invoices requires a system of highly qualified human resources.

- Some businesses do not want to publicly disclose information: Many businesses do not do business transparently, want to take advantage of the old management method to easily cheat for the purpose of revenue confusion, tax fraud, then find every excuse to prevent or delay the implementation of e-invoices. This is also a big obstacle.

- In addition, there are a number of procedures that are not appropriate, not close to the specific reality, which also causes businesses to worry about problems in the process of using e-invoices.

* For administrating the issue of e-invoices:

- When using e-invoice software, businesses not only link with Tax authorities but also with banks, buyers and sellers. If the e-invoice form is not standard according to the format of the tax authority, such as redundant, missing information, or inserted/hidden information, there will be an error in the process of issuing the e-invoice code from the tax authority.

- When using e-invoices with the tax authority's code, the enterprise must submit the invoice to the tax authority's system to issue the code before sending it to the customer. However, many accountants encounter the situation that invoices are not issued with codes because the data submitted is not in the correct format, not in accordance with the standards; the recipient's email address is too long (due to entering multiple emails); invoice data has special characters that the system does not support; or the buyer tax code is not in the correct format.

- Retrieving invoices still faces many obstacles: This is a difficulty since accountants used paper invoices and still continue when switching to electronic invoices. To avoid the risk of input invoices such as suppliers issue simple invoices; or invalid invoices; if the supplier is no longer active, causing the enterprise to be fined, the accountant still has to look up the invoice number and supplier status on the search system of the General Department of Taxation.

Solutions to improve the efficiency of using and managing e-invoices

- For organizations and individuals who want to use e-invoices: It is necessary to upgrade the information technology infrastructure to store and use electronic documents and they must have an electronic signature. In other words, in order to use e-documents, organizations and individuals must focus on investing in information technology infrastructure, and improving the level of information technology use by ministries and employees in the field of information technology, storing and using electronic documents; digital signatures.

- For e-invoice issuers: It is necessary to actively seek advice from the organization providing the selected e-invoice software to design and adjust the invoice template that may not be standard or displayed incompletely or complete invoice information. When using an electronic invoice with a tax authority's code, the unit must submit the invoice to the tax authority's system to issue the code before sending it to the customer.

In case the invoice is not issued with a code because the submitted data is not in the correct format, not in accordance with the standards; the recipient's email address is too long (due to entering multiple emails); invoice data has special characters that the system does not support; the buyer's tax code is not in the correct format, etc., the accountant should actively check the invoice standard before submitting the application for the code.

- For organizations and individuals providing accounting software: They must be responsible for ensuring the standards and conditions of accounting software according to the regulations of the Ministry of Finance when providing accounting units. In other words, suppliers of accounting software, including e-invoices, must clearly study the provisions of the law on the contents that need to be shown on electronic documents (time, address, quantity, unit price, etc.). In addition, suppliers need to have corresponding software solutions to implement and take responsibility for these solutions when providing them to customers for use.

- For tax authorities:

+ Develop a more complete legal framework for e-invoices. Although Decree No. 119/2018/ND-CP on e-invoices has been issued, it is still necessary to review and supplement regulations on e-invoices in the Law on Tax Administration, as well as regulations on the format and standard data of electronic invoices, creating a database of invoices of the tax industry for modern management application. The Ministry of Finance and the General Department of Taxation need to promote propaganda on the legal corridor and the benefits of issuing e-invoices, so that businesses can understand the benefits of e-invoices and quickly implement the form of e-invoices.

+ The Tax Authority needs to step up the instructions and propagate the benefits of applying e-invoices to businesses in many forms such as: propaganda in newspapers, radio and television stations at local and central levels, portals, etc. The General Department of Taxation also needs to direct the tax departments of provinces and cities to deploy e-invoices to businesses in the province; coordinate with suppliers, organize many conferences to implement training manuals on the application of e-invoices for businesses in the province on steps to prepare technical infrastructure and operations, create and use electronic invoices.

+ Through conferences, all problems and difficulties of taxpayers need to be answered and resolved immediately. In addition, tax authorities of provinces and cities together with tax agencies at all levels set up implementation teams, functional departments and announce phone numbers to directly support taxpayers in the process of implementing tax reform.

+ Create a synchronous connection between the management agencies, solve the cost issues and the roadmap for applying e-invoices. The technical infrastructure to help businesses carry out the application process smoothly also helps the process of deploying e-invoices quickly.

+ It is necessary to have policies to support small and medium-sized enterprises and cooperatives in areas with difficult socio-economic conditions, especially in terms of training costs and initial equipment for them to meet the conditions for the application of e-invoices.

+ For consumers, Tax authorities also need to have practical solutions to promote and encourage the receipt of e-invoices when shopping. At the same time, tax authorities promote the integration of cash register functions in large shopping centers or restaurants, connecting with tax authorities to bring convenience to consumers when making purchases. Programs to encourage consumers to get e-invoices need to be implemented from the grassroots level, with the participation of the grassroots, from Tax Departments and Departments of Taxation to continue researching and developing solutions.

+ Tax authorities have also developed specific and clear sanctions in for businesses that do not issue invoices when selling goods.

With the role of helping businesses operate more efficiently, e-invoices are considered a platform for Vietnamese businesses to develop in the digital economy. In short, to improve the efficiency of using and e-invoice management when selling goods and providing services to ensure efficiency and effectiveness on schedule and as required by the Government, it is necessary to implement many solutions and need synchronous coordination from users. Invoices, invoice issuers and state management agencies at all levels, especially the tax sector, must actively and drastically implement all measures and immediately solve existing problems. By synchronously implementing the above policies and measures, the implementation of e-invoices will be successful, ensuring the requirements set forth by the Government on the entire economy in order to save costs for society and the economy and improve financial discipline.