How to handle erroneous electronic invoices from November 1, 2020 according to Circular 68/2019 / TT-BTC

1. How to handle erroneous e-invoices according to valid documents until October 31, 2020

• In case of detecting errors when making an e-invoice and sending it to the buyer but not yet delivering the goods or providing services or an e-invoice has been made and sent to the buyer, the seller and buyer have not declared tax, if found incorrect :

               + Cancellation only with the consent and confirmation of the seller and the buyer. In which, the validity period is agreed upon by the participating parties.

                  + The seller issues a new electronic invoice to replace the used electronic invoice with errors and sends it to the buyer.

• In case of detecting errors when an invoice has been issued and sent to the buyer, has delivered goods or provided services, and the seller and buyer have declared tax:

                   + Seller and buyer must make a written agreement with electronic signatures of both parties, clearly stating the error.

                   + The seller issues an electronic invoice to correct errors.

                + Based on the adjusted e-invoices, the seller and the buyer shall make an adjusted declaration in accordance with the current law on tax administration and invoices.

2. How to handle erroneous e-invoices from November 1, 2020 according to Circular 68/2019 / TT-BTC

Before handling errors on e-invoices, enterprises need to identify two important issues for the correct and timely treatment:

                + Enterprise is in the category of using e-invoices with an authentication code or no code of the tax authority

                + Errors discovered before or after tax declaration

2.1 Handling electronic invoices without the verification code of the tax authority is incorrect

• Case 1: There is error in the name and address of the buyer but not with the wrong tax code, other contents are not wrong:

                 + The seller notifies the buyer that the invoice has errors and does not have to re-invoice.

                 + The seller sends a notice of e-invoice cancellation (to explain the error information) to the tax authority according to Form No. 04 issued under Decree No. 119/2018 / ND-CP (Applies to data e-invoice sent to tax authorities)

* Free download Form No. 04 and 05 issued under Decree No. 119/2018 / ND-CP here

• Case 2: error in tax code, amount, tax rate, tax amount or goods are not in accordance with specifications, quality, ...:

                 + Seller and buyer make a written agreement clearly stating the error.

                 + The seller issues a new electronic invoice to replace the used electronic invoice with errors and sends it to the buyer.

                 + The seller sends the notice of e-invoice cancellation to the tax authority according to Form No. 04 issued under Decree No. 119/2018 / ND-CP and sends e-invoice data to the tax authority.

Case 3: If the tax authority receives the e-invoice data and detects errors:
The tax authority sends a notice of the e-invoice that needs review to the seller according to Form No. 05 (issued under Decree No. 119/2018 / ND-CP) for the seller to check for errors => Within 02 days from the date of receiving the notice:

                + The seller sends an e-invoice cancellation notice to the tax authority according to Form No. 04 issued under Decree No. 119/2018 / ND-CP on invoice cancellation (if any).

                + If the seller notices to cancel the used e-invoice, the seller shall issue a new e-invoice to send the buyer and send the invoice data back to the tax agency.

                + If the seller does not notify the tax agency, the tax agency shall continue to notify the seller of the error of the used invoice so that the seller can make adjustments or cancel the invoice.

2.2 Handling electronic invoices with authentication code of tax authorities is incorrect

In case units are using e-invoices with authentication codes of tax offices, depending on each case of detecting errors, there shall be specific handling:

Case 1: The Seller discovers that the invoice is made with errors but has not yet sent it to the buyer

• The seller shall notify the tax authority according to Form 04 Appendix enclosed herewith Decree No. 119/2018 / ND-CP on the cancellation of an e-invoice with an incorrect code and issue an invoice. New electronic, digitally signed, digitally signed invoices are sent to the tax authority to issue a new invoice code to replace the used invoice to send to the buyer.
• The tax authority shall cancel the e-invoice which has been issued with an error code stored on the tax authority's system.

* Free download Form No. 04 and 05 issued under Decree No. 119/2018 / ND-CP here

Case 2: Detecting errors when the invoice has been made and sent to the seller:

• In case of error in the buyer's name and address but not with the tax identification number, the seller must notify the buyer of the error of the invoice and notify the tax authority according to Form No. 04. (Appendix Decree 119) and not required to re-invoice.
• In case there is an error in the tax code, amount, tax rate, tax amount, or the goods on the invoice are not in accordance with specifications and quality, the seller and the buyer need:

                   + Make a written agreement clearly stating the error

                   + Notify the tax authority according to Form No. 04 Appendix enclosed with Decree No. 119/2018 / ND-CP on the cancellation of e-invoices

                   + New e-invoices will replace the new e-invoices that have been issued with error codes, then send them to CQT for CQT to issue codes for new e-invoices. Note: A new electronic invoice to replace an e-invoice which has been issued with an error code must contain the words "Replacing an invoice with denominator, denominator, symbol ... invoice number ... …, day month Year".

After receiving Form No. 04 from the seller, the tax authority shall cancel the e-invoice which has been issued with an error code stored on the tax agency's system and issue an authentication code for the newly made replacement invoice.

Case 3: The tax authority detects that the electronic invoice has been issued with an error code

The tax authority notifies the seller according to Form No. 05 for the seller to check for errors. Within 02 days from the date of receipt of the notice from the tax authority, the seller should:

+ Check and send Form No. 04 to notify the cancellation of e-invoices that have been made with errors.

+ The seller issues a new electronic invoice, digitally signs, and sends digital signature to the tax authority to issue the authentication code to send to the buyer.

If the seller does not notify the tax authority, the tax authority shall continue to notify the seller of the error of the issued invoice so that the seller can make adjustments or cancel the invoice.

Note: The canceled e-invoice is not valid but still needs to be archived to serve the unit's search and inspection by the competent authority.

Thus, compared with the handling in the current documents, there are changes in regulations on the handling of erroneous electronic invoices to facilitate declaration and management for businesses. Hopefully the article will help accountants use e-invoices more effectively.