E-invoices: Barriers Still Exist

10:12:16 AM | 12/8/2019

“Using electronic invoices is proven to help businesses save time (up to 70% of issuing steps, 90% of invoice disputes reduced and 99% of payment time, invoice management, and 80% of cost on each invoice),” said Dr. Vu Tien Loc, President of the Vietnam Chamber of Commerce and Industry (VCCI), at the Forum on Removing Obstacles in Electronic Invoice organized by VCCI, the Business Forum Newspaper and the General Department of Taxation.

On September 12, 2018, the Government issued Decree 119/2018/ND-CP on management and use of electronic invoices. In order to facilitate businesses to use e-invoices in selling goods and providing services, Decree 119 introduces a transition roadmap from using self-printed invoices and paper invoices to electronic invoices in 24 months. Accordingly, they must complete the shift to e-invoices by November 1, 2020, at the latest.

He said, using e-invoices, they do not need to wait to receive invoices by post as in a traditional way. In just a few clicks on electronic devices, shoppers will get invoices wherever they are providing that they have internet connection.

Besides, using e-invoice helps businesses reduce compliance costs in tax administrative procedures. When they use electronic invoices, tax administrative procedures are executed electronically as a result. Accordingly, they only need to notify tax authorities of e-invoice use via the internet. And, they can use this new method as soon as they are approved.

In addition, businesses do not have to register electronic invoice forms nor send reports on use of invoices to tax authorities because the electronic invoicing software can count e-invoices used.

For authorities, especially tax administrators, the use of electronic invoices also helps prevent invoices of runaway enterprises, preclude fake invoices, create a fair business environment for businesses, and promote e-commerce development. At the same time, e-invoices support environmental protection and address the status of fraudulent invoices.

However, in practice, businesses must actively seek capable, prestigious e-invoice suppliers to consult on operations that they care about, and support them with related procedures for issuance of invoices and related papers. The application of e-invoices requires a good technical infrastructure but not all businesses are ready for this.

Besides, according to Dr. Loc, currently, the cost of applying electronic invoices is still much higher than self-printed invoices, the first reason for them to avoid applying the new method. At the same time, the habit of Vietnamese people of using cash also causes e-invoice to be slowly applied and deployed on a large scale.

To be eligible for using electronic invoices, one of important conditions is businesses must have compatible machine and equipment system to ensure smooth operation and use of e-invoices. In addition, they must have highly qualified personnel to use e-invoices. Furthermore, companies are also exposed to the risk of power failure, system failure or internet disruptions, resulting in e-invoice failures. These may lead to delays in exporting goods and affecting business operations.

In addition, under the Electronic Transaction Law, conditions for electronic transactions are stricter and more complicated and the deployment is thus slower. E-invoices must be digitally authenticated. Telecommunications infrastructure as well as other conditions subject to businesses, such as connectivity to tax authorities and relevant agencies must be eligible for electronic invoices.

“In spite of having many benefits in using e-invoices, shortcomings put forth by enterprises through VCCI-led discussions are also what authorities need to take into consideration to solve those issues to make electronic invoices a best solution to business operations in the digital age," Dr. Loc said.

Therefore, the Ministry of Finance and the General Department of Taxation must boost communications on legal corridor and benefits of electronic invoices so that enterprises can understand the benefits of e-invoices and early implement this type of service.

Mr. Nguyen Huu Tan, Deputy Director of Policy Department - General Department of Taxation

As of July 2019, as many as 279 companies had registered to issue electronic invoices with tax code, including 128 in Hanoi, 118 in Ho Chi Minh City and 33 in Da Nang City. Among them, 255 companies issued e-invoices with tax code, including 107 in Hanoi, 117 in HCM City and 31 in Da Nang.

As many as 8,111,337 invoices issued by 255 companies were certified. The General Department of Taxation confirmed a total value of VND8,033,386,244,730 of e-invoices.

On e-invoice application according to Circular 32/2011/TT-BTC, 118,620 taxpayers registered to pay tax online as of July 22, 2019. They issued 2.3 billion e-invoices as of June 30, 2019.

Mr. Nguyen Kho Din, Director of Corporate Customers, BKAV Technology Group, General Secretary of Digital Signature and Electronic Transaction Club - Vietnam Information Security Association

Although Decree 119 took effect from September 2018, there has been no circular guiding the enforcement of this decree. Therefore, there are currently regulatory “gaps” on implementing units, signing date, invoice date and special invoices.

In addition, obstacles exist in inconsistent deployment between authorities and enterprises such as tax, treasury, insurance and market watchdog.

For example, tax authorities encourage the use of e-invoices but treasuries and insurers reject them and require enterprises to submit paper invoices. This drops the significance of electronic invoices.

Therefore, e-invoices are necessarily deployed consistently by relevant agencies which need to sit together to come up with solutions to remove obstacles against enterprises in e-invoice use.

At the same time, instructive circulars for this decree are needed to provide more detailed instructions on electronic invoices, supplier selection, signing date and invoice date. The Ministry of Finance and the General Department of Taxation should set out a clear enforcement schedule to avoid congestions in 2020.

Ms. Nguyen Hoai Huong, Defense Economic Technical Industry Corporation (GAET)

The current matter is whether digital signatures on electronic invoices statutorily expresses the date of signing or not? We directly sent a written request to this effect to the General Department of Taxation but we have not got guidance on this yet. Meanwhile, local tax bureaus required us to show the date of signing and digital signatures.

With previous paper invoices, if there are errors or omissions, we just make a written record of adjustment and issue an adjustment invoice. But with electronic invoices, if you adjust two contents, you must issue two adjustment invoices. Therefore, for customers who receive adjustment invoices, they will be hard to accept errors or omissions on original invoice. This also upsets businesses.

Mr. Nguyen Tuong, Deputy General Secretary of Vietnam Logistics Business Association

To deploy electronic invoices, some issues need to be addressed. Firstly, it is necessary to create a foundation for implementation of electronic invoices, synchronize implementation of electronic invoices between authorities and businesses. Secondly, Decree 119/2018/ND-CP needs guiding circulars on implementation of electronic invoices for enterprises. Thirdly, about 200 enterprises of different scale are providing electronic technical services for e-invoice application. Nevertheless, there are no regulations and standards for these suppliers. Fourthly, we are now effectively declaring customs and applying one-door customs but the connectivity with ministries and branches is weak, especially with tax, insurance and treasury agencies. Therefore, it is necessary to solve this issue for enterprises to apply electronic invoices.

In addition, it is important for enterprises to inform and train their employees and apply information technology of every locality and sector because logistics is a long-running industry.

Quynh Chi