MANDATORY TRANSITION AND NEW REGULATIONS ON ELECTRONIC INVOICE & DIGITAL IDENTITY: COMPLIANCE ADVISORY EFFECTIVE JUNE 2025
As of June 1, 2025, several new regulations regarding electronic invoices, digital identity, and procedures for handling invoice errors come into effect. These are significant changes, directly impacting the work of accountants and the operations of enterprises. The analysis below provides specific details for clarity.
Contents
I. LEGAL BASIS
The main legal basis is Decree 70/2025/ND-CP of the Government, amending Decree 123/2020/ND-CP on invoices and documents.
Some content also relates to Decree 69/2024/ND-CP concerning digital identity when performing administrative procedures. Furthermore, the Ministry of Finance and the General Department of Taxation will provide detailed guidance for easy practical application by accountants.
II. IMPORTANT UPDATES ON ELECTRONIC INVOICE ISSUANCE
2.1. Mandatory Requirement for Cash Register Invoices
Stores, supermarkets, retail chains, and similar establishments that have cash registers connected directly to the tax authorities must issue electronic invoices generated from the cash register. This means that enterprises subject to the mandatory use of cash register invoices will be required to utilize data-connecting software and transmit the data immediately to the tax authority.
2.2. Flexibility in Commercial Electronic Invoices for Exported Goods
The new regulation allows exporting enterprises more flexibility regarding the timing of issuing commercial electronic invoices. This aims to reduce procedural pressure, instead of having to issue the invoice immediately upon the goods leaving the customs supervision area as previously required.
III. CRUCIAL CHANGES IN ELECTRONIC INVOICE ERROR HANDLING (EFFECTIVE 01/06/2025)
3.1. Abolition of the “Invoice Cancellation” Mechanism
Previously, when an electronic invoice was found to have errors, the enterprise could “cancel” it and issue a new one. From 01/6/2025, this regulation is abandoned. Instead, enterprises may only choose to issue an adjustment invoice or a replacement invoice.
3.2. Differentiation Between Adjustment and Replacement
Issuing an Adjustment Invoice: Applied when errors relate to quantitative or value factors such as amount, tax rate, tax money, or quantity of goods. The accountant must issue the adjustment invoice to reflect an increase or decrease.
Issuing a Replacement Invoice: Applied when needing to change many important details on the old invoice or when the enterprise wishes to replace the entire invoice.
Note on Buyer Information Errors: If the error solely concerns the buyer’s name or address, provided the Tax Identification Number (TIN) and other important information are correct, the enterprise does not need to re-issue the invoice. The enterprise only needs to inform the buyer and send a notification according to the prescribed form to the tax authority.
3.3. Requirement for Written Agreement
In cases of invoice adjustment or replacement, the enterprise must have a written agreement with the buyer (if the buyer is an organization). If the buyer is an individual, only notification of the error is required.
3.4. Handling Errors Detected by the Tax Authority
If the error is detected by the Tax Authority, they will send a notification requesting the enterprise to check, then proceed to issue an adjustment or replacement invoice to ensure compliance with regulations.
IV. MANDATORY DIGITAL IDENTITY REQUIREMENT (VNeID)
The transition of administrative system access is another critical legal requirement:
Starting 01/7/2025, current accounts used to access the National Public Service Portal or administrative systems of ministries, departments, and provinces will be mandatory to switch to logging in using the VNeID digital identity account.
Enterprises need to urgently prepare their digital identity to ensure the ability to perform administrative procedures, including tax payment and invoice declaration, before the public systems completely switch the login method.
V. LEGAL RECOMMENDATIONS AND WARNINGS OF SANCTIONS
Failure to comply with these new regulations may expose enterprises to serious legal sanctions and financial risks:
- Administrative Sanctions: Subject to administrative penalties for not using the correct type of invoice (e.g., being required to use a cash register invoice but using a standard invoice).
- Financial Risk: Invoices may be considered invalid due to improper error handling (e.g., unauthorized cancellation, lack of written agreement with the buyer), leading to the loss of tax deductibility.
- Operational Disruption: Delay in activating the digital identity poses a risk that the enterprise may be unable to file declarations or issue invoices within the statutory deadlines.
To ensure legal compliance and mitigate risks, we strongly recommend that enterprises immediately take the following actions:
- Review and Restructure Procedures: Re-examine internal procedures for issuing and handling invoice errors.
- Activate Digital Identity: Register the VNeID digital identity account as soon as possible.
- Compliance Training: Conduct training for relevant personnel to ensure full comprehension of the new rules regarding adjustment and replacement invoices.
Proactive compliance not only helps the enterprise avoid sanctions but also harnesses the benefits of a modern and transparent electronic tax system.
VI. About Us, Hankuk Law Firm
■ Hankuk Law Firm – Introduction
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To protect the legitimate rights and interests of our clients and achieve the best results, we provide legal advice and participate in civil lawsuits related to business, labor, marriage, family, and inheritance.
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