Circular No. 73/TC-TCT guiding the invoice and record-keeping regime for goods circulating in the market

CIRCULAR

Guidelines on invoice and voucher systems for goods circulating in the market
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Pursuant to the guidance of the Prime Minister in Official Letter No. 5121/VPCP-KTTH dated October 20, 2003 of the Government Office;

Pursuant to the Accounting and Statistics Ordinance dated May 20, 1988;

Pursuant to the Economic Contract Ordinance dated September 25, 1990;

Pursuant to Decision No. 292/CT dated November 17, 1988 of the Chairman of the Council of Ministers (now Prime Minister) regarding the issuance of invoices and vouchers when buying and selling goods and providing services for payment, Circular No. 2759/KTTH dated June 10, 1993 of the Government Office announcing the Prime Minister's opinion entrusting the Ministry of Finance with the task of prescribing measures to handle violations of the invoice and voucher issuance system when buying and selling goods;

Pursuant to Circular No. 4201 KTTH dated August 28, 1996 of the Government on coordinating inspections and controls to effectively prevent foreign goods from entering the domestic market illegally;

Pursuant to Decree No. 22/CP dated April 17, 1996 of the Government on administrative penalties in the field of taxation;

Pursuant to Decree No. 85/CP-m dated July 11, 1997 of the Government;

Pursuant to Directive No. 853/1997 CT-TTg dated October 11, 1997 of the Prime Minister;

The Ministry of Finance hereby provides guidelines on the invoice and voucher system for goods circulating in the market as follows:

 

I. GENERAL PROVISIONS

1. Goods produced and traded by organizations and individuals (collectively referred to as business entities), regardless of whether they are domestically produced or imported, must be accompanied by valid invoices and vouchers proving their legal origin when circulating in the market.

Assets of organizations that are not business entities such as administrative agencies, public institutions, associations, etc., when being transferred or transported between affiliated units do not fall within the scope regulated by this Circular. To distinguish these assets from goods of business entities, transfers and transports on the road must have transfer orders and warehouse release forms issued by the organization. If purchased for equipment purposes, invoices must be provided.

2. Goods circulating in the market as defined in this Circular include those goods purchased, imported, sold, or exchanged by business entities, regardless of whether they are in transit, on sale, or in storage.

3. Invoices and vouchers prescribed in this Circular include sales invoices, combined sales and warehouse release forms, internal transportation and warehouse release forms, tax receipts, payment receipts, tickets, and stamps which must be original copies uniformly issued by the Ministry of Finance or approved by the Ministry of Finance (General Department of Taxation) for enterprises to issue themselves. Other documents such as economic contracts (if copies, must be notarized), warehouse release orders, transfer orders, if copies (or photocopies) must bear the stamp confirming true copies from the enterprise itself.

4. Business entities are responsible for retaining the documents prescribed in this Circular according to the retention period set by the State.

5. Individual households when purchasing or receiving goods must comply with general regulations on invoices and vouchers, and also must have:

- If operating a fixed business and purchasing goods for resale or raw materials for production, they must maintain a purchase record. Purchased goods must be recorded accurately in terms of quantity, type, and value in the purchase record before transportation.

- If operating a mobile trading business, they must pay taxes before transporting goods out of the purchasing locality. Transported goods must be accompanied by turnover tax receipts and circulation profit tax receipts.

II. INVOICES AND VOUCHERS REGULATED FOR SPECIFIC CASES:

A. FOR DOMESTICALLY PRODUCED GOODS

1. Goods exported for sale, given to agents, or sent for exchange must be accompanied by sales invoices or combined sales and warehouse release forms handed over to customers.

In cases where goods are sold, given to agents, or sent for exchange through delivery to locations specified by customers, economic contracts must be attached.

2. Goods of fixed business entities sent for mobile sales must be accompanied by transfer orders and internal transportation and warehouse release forms handed over to personnel responsible for transportation and sale.

3. Business entities sending raw materials for processing must provide warehouse release forms clearly stating "sent for processing" along with processing contracts.

4. Internal goods transfers from one warehouse to another, or between affiliated units within the same business entity must be accompanied by internal transfer orders and internal transportation and warehouse release forms.

When a production unit transfers goods to branches or stores located in different localities (provinces, cities) for sale, a combined sales and warehouse release form must be issued.

5. Goods returned to sellers due to non-compliance with specifications or quality must be accompanied by a return notice from the returning entity detailing the reasons for return, along with warehouse release forms from the returning unit and sales invoices or combined sales and warehouse release forms (copies bearing the stamp of the seller) from the selling entity.

6. For low-value consumable goods below the threshold requiring invoices, if the buyer does not request an invoice, the selling entity must prepare a sales list according to the guidance of the tax authority.

7. Products exempt from issuing sales invoices as follows:

- Agricultural, forestry, and aquatic products not processed directly sold by farmers or fishermen.

- Personal items of individuals who do not engage in business.

When purchasing goods, the purchasing entity must prepare a purchase list according to the guidance of the tax authority. If a business entity sets up a procurement station in concentrated production areas, it must register with the tax authority at the procurement station location and prepare lists as prescribed above. When transporting goods out of the procurement station, a warehouse release order from the entity must accompany the internal transportation and warehouse release form.

8. Agricultural, forestry, and aquatic products directly produced or harvested by farmers or fishermen without further processing, sold outside the locality of direct production (district) or beyond the regular consumption area, are exempt from turnover tax and circulation profit tax but must be accompanied by a confirmation from the People's Committee of the commune regarding the quantity (weight) of products produced and carried by themselves.

9. Business entities purchasing or receiving goods must be responsible for requesting the delivering party to issue valid invoices and documents to hand over to themselves. In cases of purchasing from non-business entities (as stipulated in Points 7 and 8), they must prepare a list of purchases. State-owned enterprises, foreign-invested enterprises, limited liability companies, joint-stock companies, private enterprises, and cooperatives purchasing or receiving goods and directly transporting them back must accompany with economic contracts or internal dispatch orders as in the case of sales or exchanges, and provide to agents.

B. FOR IMPORTED GOODS

1. Goods imported through informal channels.

Goods imported through informal channels must have the following documents:

- Declaration form for goods imported through informal border channels.

- Receipt for import tax on goods imported through informal border channels.

- Purchase record if it is an individual business household.

2. Goods imported through formal channels:

Goods imported through formal channels must have a declaration form for imported goods that has been inspected and certified by customs authorities, or a notification of tax payment issued by customs authorities, or a receipt for import tax. If importing large consignments requiring multiple shipments, the importer must request the customs authority at the port of entry to certify each transport declaration form for imported goods.

3. Business entities importing under agency agreements when exporting goods back to the principal must issue a sales invoice or a combined sales invoice and warehouse withdrawal note.

4. Imported goods as gifts or presents must have:

A declaration form for imported goods that has been inspected and certified by customs authorities.

Receipt for import tax, receipt for special consumption tax (for goods subject to both import tax and special consumption tax) if the value of the consignment exceeds the tax-exempt threshold. In cases where import tax and special consumption tax are exempted, a decision from the competent authority must be provided.

5. Personal luggage of individuals entering Vietnam exceeding the tax-exempt allowance must have a declaration form for imported goods that has been inspected and certified by customs authorities, and a receipt for import tax, receipt for special consumption tax, or a decision exempting import tax and special consumption tax if the luggage is subject to import tax and special consumption tax.

6. Business entities importing goods that are required by the state to be labeled must affix labels according to regulations.

7. Imported goods sold directly by businesses importing them or purchased by other businesses for resale must comply with the invoice and document system as stipulated for domestically produced goods in Section A above.

III. HANDLING VIOLATIONS

Business entities violating the invoice and document system for goods circulating in the market shall be handled as follows:

A. FOR DOMESTICALLY PRODUCED GOODS

1. Transporting goods with invoices or combined invoices and warehouse withdrawal notes as prescribed in Point 1, warehouse withdrawal notes prescribed in Points 3 and 5; combined warehouse withdrawal and internal transportation notes prescribed in Points 2 and 4 of Section A, Part II but without an economic contract or internal dispatch order will be subject to collection of turnover tax and profit tax during circulation.

Farmers or fishermen transporting large quantities of agricultural, forestry, or aquatic products they produce or harvest out of their production area without confirmation from the People's Committee of the commune will be subject to collection of turnover tax and profit tax during circulation.

2. If goods are exported without issuing invoices as prescribed in Points 1, 2, 3, 4, and 5 of Section A, Part II, they will be subject to recovery of turnover tax and profit tax during circulation and administrative fines ranging from one to three times the amount of turnover tax and profit tax depending on the severity of the violation. For production units subject to special consumption tax, they will be subject to recovery of special consumption tax and fines ranging from one to three times the amount of special consumption tax.

3. Purchased or received goods without invoices from the seller or deliverer or purchase lists (in cases where purchase lists are required) will be considered as collusion to evade taxes and will be subject to collection of turnover tax and profit tax during circulation based on market prices at the time of inspection (if the goods are in transit) or based on the value of goods reflected in accounting records. If the price reflected in the accounting records does not match the actual price, the market value of the goods at the time of purchase will be used, and when calculating profit tax, the tax authority may determine reasonable and legitimate costs based on investigation. The purchase value and collected taxes will be recorded as reasonable and legitimate costs when determining taxable profit.

4. Businesses engaged in wholesale trading without receipts for turnover tax and profit tax will be subject to recovery of turnover tax and profit tax during circulation and administrative fines ranging from one to three times the amount of turnover tax and profit tax depending on the severity of the violation. The tax base will be based on market prices at the location where the tax authority discovers the violation.

5. Individual fixed businesses purchasing goods for sale or raw materials for production with invoices but without purchase records will be subject to collection of turnover tax and profit tax during circulation and administrative fines for tax violations.

6. Business entities violating the invoice and document system and evading taxes in large amounts or repeatedly may be criminally prosecuted according to the law.

7. Cases of domestic production goods business violating the document system that have been penalized must have a penalty decision and a receipt for payment attached.

B. FOR IMPORTED GOODS

1. Imported goods lacking invoices and documents as prescribed in Points 1, 2, 3, 4, 5, and 6 of Section B, Part II will be considered as smuggled goods and subject to confiscation.

2. Selling imported goods without issuing invoices to buyers will, in addition to recovery of turnover tax and profit tax during circulation, be subject to administrative fines ranging from one to three times the amount of turnover tax and profit tax.

3. Purchasing imported goods for business without valid invoices and documents will be considered as smuggled goods and subject to confiscation.

4. Cases of imported goods business violating the invoice and document system and evading taxes in large amounts or repeatedly may be criminally prosecuted according to the law.

5. Cases of imported goods business violating the regulations that have been penalized must have a penalty decision and a receipt for payment attached.

C. SETTLEMENT OF COMPLAINTS

A business entity has the right to appeal if the decision on handling does not conform to its situation. The appeal letter shall be submitted to the agency issuing the handling decision or to a higher-level agency. The procedures and authority for resolving appeals shall be carried out in accordance with the provisions of tax laws.

While awaiting resolution, the business entity must still comply with the signed decision.

IV. IMPLEMENTATION

1. The authority to handle violations concerning invoice and document regimes for goods circulating in the market as stipulated in this Circular shall be exercised by the tax authority or the inspection agency which discovers the violation and issues the handling decision after coordinating with the tax authority.

2. All cases of violation must be recorded in a record book according to the prescribed regime. When handling, if taxes are recovered and fines imposed, tax receipts (Form CT 11) must be used for collection and handed over to the business entity subject to the violation. The recovered tax amount, fine, and proceeds from confiscated sales must be deposited into the State Treasury according to the current regulations. 3. Organizations or individuals obstructing the circulation of goods, causing losses due to incorrect handling, must compensate the affected entities for their losses.

This Circular takes effect from December 1, 1997, replacing Circular No. 79 TC/TCT dated October 1, 1994, and other provisions on invoices and documents set forth in Circular No. 61 TC/TCT dated July 22, 1993 of the Ministry of Finance that conflict with this Circular are hereby abolished./.