Electronic invoices have become an indispensable part of business transactions in Vietnam, particularly amidst the country’s comprehensive digital transformation. However, under Vietnamese law, there are specific cases where enterprises, organizations, or individuals are required to suspend the use of electronic invoices. This article clarifies these cases based on specific legal regulations in Vietnam’s legal system.

I. Legal Basis

Decree 119/2018/ND-CP (dated September 12, 2018): This decree governs electronic invoices in the sale of goods and provision of services. It outlines circumstances requiring businesses to cease using electronic invoices, such as when they cease operations, face enforcement measures for tax-related administrative decisions, or commit tax fraud.

Circular 68/2019/TT-BTC (dated September 30, 2019): This circular provides detailed guidance on implementing Decree 119/2018/ND-CP, specifying cases such as violations of tax regulations, invoice fraud, or the termination of tax codes.

Decree 123/2020/ND-CP (dated October 19, 2020): This decree supplements and clarifies regulations regarding invoices and documents, including conditions for the suspension of electronic invoice usage due to non-compliance or legal violations by businesses.

II. Definition and Role of Electronic Invoices

Electronic invoices are documents issued, signed, and transmitted in electronic form through IT platforms. As per Decree 119/2018/ND-CP and Circular 68/2019/TT-BTC, electronic invoices help businesses reduce costs, save time, and minimize errors in invoice preparation while facilitating tax management. However, in specific situations, businesses may be required to suspend their use.

III. Cases of Suspension of Electronic Invoices

1. Suspension Due to Business Cessation

One common scenario for suspension arises when businesses cease operations. According to Article 16(1) of Decree 119/2018/ND-CP, if the tax authority determines that a business has stopped operating and no longer meets the conditions for issuing invoices, it may mandate the cessation of electronic invoice usage. This ensures invoices are not misused for fraudulent purposes during tax reporting and payment.

2. Tax Fraud or Violations

As stipulated in Article 9 of Circular 68/2019/TT-BTC, businesses found engaging in fraudulent activities related to electronic invoices—such as issuing improper invoices, underreporting taxable amounts, or tax evasion—will have their right to use electronic invoices temporarily suspended. This measure upholds transparency and integrity in electronic invoicing, preventing tax revenue loss.

3. Suspension Due to Termination of Tax Codes

According to Article 16 of Decree 119/2018/ND-CP, the termination of a business’s tax code results in the mandatory cessation of electronic invoice usage. This often occurs when businesses seriously violate tax laws, fail to fulfill tax declaration obligations over a certain period, or commit tax fraud. Tax authorities will deactivate the tax code and require the suspension of electronic invoicing.

4. During Business Dissolution or Bankruptcy

Businesses undergoing dissolution or bankruptcy are also required to stop using electronic invoices, as outlined in Article 16(2) of Decree 119/2018/ND-CP. During these processes, all business activities, including invoice issuance, must cease to ensure transparency in settling debts and assets without market disruptions.

5. Ownership Restructuring or Internal Reorganization

When businesses engage in ownership restructuring (e.g., transitioning from an LLC to a joint-stock company) or internal reorganization, they may need to temporarily suspend electronic invoice usage. According to Decree 119/2018/ND-CP and Circular 68/2019/TT-BTC, tax authorities will reassess and restore invoice usage rights after the restructuring or reorganization is completed.

6. Tax Enforcement Actions

Businesses subject to tax enforcement actions, such as account freezing or operational suspension, will also be required to suspend electronic invoicing. This ensures they cannot continue business operations or issue invoices during enforcement periods. This regulation is detailed in Circular 68/2019/TT-BTC and other related guidelines.

7. Invalid or Expired Invoices

The use of invalid or expired electronic invoices may also lead to suspension. This can occur when businesses use unapproved electronic invoice software or fail to comply with regulations regarding invoice content and format. Tax authorities may suspend the use of such invoices and conduct checks before allowing their continued use.

By understanding these regulations, businesses can ensure compliance and avoid disruptions in their operations caused by the suspension of electronic invoices.

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■ Hankuk Law Firm – Introduction

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