What is an Electronic Invoice?

Following the experimental period of using electronic invoices instead of paper ones, the decision to submit electronic taxes through banks will be implemented in the near future. However, many businesses are still unfamiliar with this term and unsure about its application. Here, Mytour will share essential information about electronic invoices for everyone's reference.

Electronic invoices are widely used in businesses nowadays.

I. Concept and Benefits of Electronic Invoices

An Electronic Invoice (abbreviated as e-invoice) is a set of electronic data messages related to the sale of goods or services, created, issued, sent, received, stored, and managed electronically. This invoice is initiated, prepared, and processed using the computer of the organization assigned a tax identification number when offering products or services and is stored on the computers of the parties involved in compliance with electronic transaction regulations.

Image of an electronic invoice

An electronic invoice includes:

- Value-added tax invoices
- Export invoices
- Sales invoices
- Other invoices, including insurance premium receipts, cards, tickets, stamps, etc.
- Airfreight payment receipts
- International freight fee payment documents
- Forms and content are prepared according to international practices and relevant legal regulations.

Benefits of electronic invoices:

- All are created on computers, significantly reducing costs for printing, sending, storing, and archiving invoices.
- Accounting settlement, business management, and data reconciliation are more straightforward and convenient.

II. What makes an electronic invoice valid?

If the following conditions are met, the electronic invoice will have legal validity:

- The information in the invoice ensures integrity (complete and unaltered, alongside changes occurring during the exchange, storage, or display of the electronic invoice) from the moment the information is generated in its final form as an electronic invoice.

- The information contained in the electronic invoice is accessible and usable in its entirety.

* Similar to paper invoices, a valid E-invoice must simultaneously meet the following criteria:

- Invoice information includes the invoice contact name, invoice template number, and invoice symbol.
- Seller's information on the invoice: Company name, tax ID, address, phone number.
- Buyer's information on the invoice: Company name, tax ID, address.

- Contents recorded on the invoice:

+ Serial number (STT), Name of goods/services, unit of measurement, quantity, unit price, total amount.
+ Sum of goods value, tax rate, tax amount.
+ Amount in words.
+ Buyers and sellers need to sign and stamp according to their respective roles.

Compared to paper invoices, for E-invoices to be valid and legal, in addition to the information similar to paper invoices, E-invoices must also ensure the following:

- Representation of the electronic invoice - QR Code
- Code/Type:
- Symbol:
- E-invoice without duplicate
- Electronic signature
- Valid and legal E-invoice template
- Invoice in XML format is legally binding if the information is intact and not modified, accompanied by a representation of the invoice in PDF format.

* Notes on valid E-invoice content:

- Content is written in Vietnamese, correct spelling, with accents. If additional foreign words are needed, they will be placed in parentheses () or can be placed directly below the Vietnamese line but ensure they are written in a smaller font than the Vietnamese font size.
- In cases like electricity bills, water bills, banking service bills, and telecommunications service bills, the organizations initiating, creating, issuing, and using invoices do not need to have the electronic signature of the buyer and the stamp of the seller.

III. Conditions for initiating and using electronic invoices

The conditions for initiating and using E-invoices are explicitly stated in Circular 32/2011/TT-BTC:

a) Being an economic organization meeting the conditions and conducting electronic transactions in tax declaration with the tax authorities; or being an economic organization using electronic transactions in banking activities.
b) Having locations, information transmission lines, information networks, and communication devices that meet the requirements for the exploitation, control, processing, use, storage, and archiving of electronic invoices;
c) Having a qualified and capable team corresponding to the requirements for initiating, creating, and using electronic invoices as regulated;
d) Having an electronic signature as required by law.
e) Having sales software connecting with accounting software, ensuring that the data of electronic invoices for goods and services is automatically transferred to the accounting software (or database) at the time of invoice creation.
f) Having backup, data recovery, and storage processes that meet the minimum storage quality requirements, including:

- The data storage system must meet or be demonstrated to be compatible with data storage system standards;
- Having backup and data recovery procedures when the system encounters problems: ensuring the backup of electronic invoice data to storage media or backing up the entire data online.

If any business or organization meets the necessary conditions mentioned above, they will be eligible to initiate and use electronic invoices.

IV. Procedures for Issuing Electronic Invoices

To issue E-invoices, the following steps are required:

- The business needs a decision to apply E-invoices.
- Notify the issuance of E-invoices to the management authority and submit it to the electronic information page of the General Department of Taxation.
- Digitally sign the invoice template and submit it to the tax management office.

We will provide a detailed guide on theprocedure for registering the use of electronic invoicesin the following article.

V. Guidance on Creating and the Procedure for Issuing Electronic Invoices

* Creating E-invoices:

- The organization initiating electronic invoices will perform the task of creating E-invoices using the seller's software creation system.

- The organization initiating electronic invoices accesses the electronic invoice system provided by the intermediary organization that offers E-invoice solutions to initiate and create E-invoices.

* Invoice issuance is the process of transmitting the invoice data from the seller to the buyer

- Direct transmission method: The seller creates the invoice, electronically signs it, and sends it to the buyer through the agreed-upon transmission method.

- Transmission through intermediary organizations: The seller creates the invoice within the electronic invoice system provided by the intermediary organization, and then sends the electronically signed invoice to the buyer.

* Processing the Issued Electronic Invoices

- An invoice that has been created and sent to the buyer but not yet delivered, or a case where the invoice has been created but not yet declared for tax, can only be canceled when both parties agree and confirm. Additionally, the canceled invoice must be retained for government agency inquiries.

- In cases where the invoice has been created, tax has been declared, goods or services have been delivered, and the invoice has been sent to the buyer, but errors are later discovered, the seller and buyer need to create an agreement document. Both parties must electronically sign the document, clearly stating the errors on the invoice, and the seller must rectify those errors. The subsequently created invoice should clearly indicate adjustments in terms of quantity of goods, VAT rates, selling prices, etc. The later invoice should not record negative values (-).

VI. Converting Electronic Invoices to Paper Invoices

* Conditions for Conversion

- The original electronic invoice content must reflect integrity.
- It should have a distinct mark confirming the conversion from e-invoice to paper invoice.
- It must include the signature and full name of the person executing this conversion.

* Principles of Conversion

- The seller converts e-invoices to paper invoices to prove the origin of goods during circulation.
- Conversion occurs only once.
- Converted e-invoices must comply with regulations, bear the signature of the authorized representative, and include the seller's stamp.

* Legal Validity of Converted E-invoices

Converted e-invoices have legal validity if they meet all the conversion conditions.

* Unique Symbol of Conversion Invoice

The unique symbol of the conversion invoice from e-invoice to paper invoice includes complete information:

- A line of text distinguishing between the original e-invoice and the conversion invoice (clearly stating CONVERTED FROM ELECTRONIC INVOICE)
- Full name
- Signature of the person executing the conversion
- Conversion timestamp

VII. Key Points about Electronic Invoices

Does an electronic invoice have duplicates?

This invoice does not have duplicates; the seller issues the invoice, and the buyer receives it. Tax authorities process data on a single invoice copy.

When is the use of electronic invoices mandatory?

Is electronic invoicing mandatory? According to Article 36 of Decree 119/2018/NĐ-CP, a mandatory timeline for the adoption of electronic invoicing is outlined:

- From 01/01/2017: Newly established enterprises; organizations or businesses already using electronic invoices and possessing tax identification numbers must periodically submit invoice data to tax authorities, either in electronic invoices or electronically verified invoices.
- From 01/07/2018: Approximately 30% of organizations and businesses not yet using electronic invoices are obliged to adopt electronic invoicing.
- From 01/01/2020: The goal is to have 100% of organizations and businesses using electronic invoices.

Is a seal and signature required for electronic invoices?

* According to Clause 3, Article 4 of Circular 39/2014/TT-BTC, certain cases exempt electronic invoices from the requirement of containing complete information, including:

Business organizations selling goods or services may create, issue, and use invoices without necessarily requiring the buyer's signature or the seller's stamp in the following cases: electronic invoices; water invoices; telecommunications service invoices; and banking service invoices that meet the conditions for self-printing as instructed in this Circular.

b) The following cases are not necessarily required to have all mandatory contents, except when the buyer is an accounting unit that requires the seller to issue an invoice with all the required contents as instructed in Clause 1 of this Article:

- Self-printed invoices of supermarket and commercial center business organizations established according to the law are not necessarily required to have the buyer's name, address, tax code, buyer's signature, and seller's stamp.

- For labels and tickets: Pre-printed labels and tickets with denominations are not necessarily required to have the seller's signature, seller's stamp; buyer's name, address, tax code, and buyer's signature.

- For enterprises using invoices in large quantities, complying with tax laws, based on the characteristics of business activities, sales organization methods, and the invoicing practices of the enterprise, the Tax Department may consider and issue written guidance stating that invoices do not necessarily have the criterion 'seller's stamp.'

- Other cases according to the guidance of the Ministry of Finance.

* Official Letter No. 2402/BTC-TCT also provides clear and detailed guidance on implementing electronic invoices with content:

At Point e, Clause 1, and Clause 2, Article 6 of Circular No. 32/2011/TT-BTC dated March 14, 2011, of the Ministry of Finance guiding the content of electronic invoices:

'1. An electronic invoice must contain the following information:

...

e) Electronic signature as required by the legal regulations of the seller; the date of invoice creation and transmission. Electronic signature as required by the legal regulations of the buyer in cases where the buyer is an accounting entity.

...

2. In some cases, an electronic invoice may lack the required information, and specific guidance is provided by the Ministry of Finance.

Based on the above regulations, if the buyer is not an accounting entity or, if they are, has documentation and evidence demonstrating the exchange of goods or services between the seller and the buyer, such as economic contracts, delivery notes, goods receipt records, payment receipts, or invoices, the seller issues an electronic invoice to the buyer as required. The electronic invoice for the buyer is not necessarily required to have the electronic signature of the buyer.

The Ministry of Finance has assigned the Tax Department to review each specific case and the compliance conditions of the business to provide guidance on waiving the requirement for the buyer's electronic signature on the electronic invoice.

The Ministry of Finance notifies the Tax Departments for their awareness and implementation.

Authentication Code for Electronic Invoices

An electronic invoice with an authentication code, known as EIA, is issued by the tax authorities along with the authentication code and invoice number through the invoice authentication code system of the General Department of Taxation.

For this type of invoice, the seller needs to electronically sign the invoice when the tax authorities issue the authentication code and invoice number. Companies are not required to report the usage status of invoices for this type.

Methods of Receiving Electronic Invoices

Customers receive electronic invoices through two methods:

- The seller sends the invoice directly using the agreed-upon electronic invoice delivery method, such as via SMS or Email.
- The seller sends the invoice through the intermediary organization's system that provides electronic invoice solutions.

Above are the essential points about electronic invoices. If you have any questions about these invoices, feel free to leave a comment below the article. Mytour will promptly respond and provide answers.