Issuing invoices is directly related to the tax obligations of the business. Therefore, businesses have the obligation to issue invoices and record revenue in accordance with regulations.

Legal grounds:

• Circular No. 219/2013/TT-BTC;
• Decree No. 123/2020/ND-CP;
• Decree No. 125/2020/ND-CP;
• Decree No. 102/2021/ND-CP.

We receive the following questions:

Hello, I just graduated from school and work as an accountant for a construction company. We have many projects that last a year. Some times there are projects that have been signed for acceptance but customers pay very slowly, so the boss prescribes waiting for payment to be fullfill collected before issuing invoices to avoid bad debt. Is that okay?

Invoice is one of the documents used as a basis for recording revenue from selling goods and providing services. So the time of invoice issuance is directly related to the time of the business’s tax obligations.

1. Acceptance the project first, invoice later?

Pursuant to Point c, Clause 4, Article 9 of Decree No. 123/2020/ND-CP as follows:

Article 9. Time of invoice issuance

4. Invoicing time for some specific cases is as follows:

c) For construction and installation activities, the time of invoice is the time of acceptance and handover of the project, project items, completed construction and installation volume, regardless of whether money has been collected or not.

Pursuant to Clause 5, Article 8 of Circular No. 219/2013/TT-BTC as follows:

Article 8. Time to determine VAT

5. For construction and installation, including shipbuilding, it is the time of acceptance and handover of the project, project items, completed construction and installation volume, regardless of whether money has been collected or not.

According to the above regulations, for enterprises providing construction and installation services, the time to issue invoices and determine value added tax is the time of acceptance and handover of the project, regardless of whether money has been collected or not.

Therefore, in the case of the specific question mentioned above, the parties have signed to accept the project but the enterprise delays and waits for the customer to pay before issuing an invoice, which is not in accordance with the law.

2. What are the effects of issuing invoices at the wrong time?

Delay in issuing sales and providing services invoices delays tax liability. Therefore, businesses may have to pay interest due to late tax payment, as well as be fined for administrative violations.

Pursuant to Article 24 of Decree No. 125/2020/ND-CP, the act of making invoices at the wrong time is subject to administrative penalties as follows:

Article 24. Penalties for violations of regulations on invoicing when selling goods and services

1. A warning shall be imposed for one of the following acts:

a) Issuing invoices at the wrong time but does not lead to delay in fulfilling tax obligations and there are extenuating circumstances;

…

3. A fine from 3,000,000 VND to 5,000,000 VND shall be imposed for making invoices at the wrong time but not leading to delay in fulfilling tax obligations, except for the case specified in Point a, Clause 1 of this Article.

4. Fine from 4,000,000 VND to 8,000,000 VND for one of the following acts:

a) Issuing invoices at the wrong time according to the provisions of law on invoices for selling goods and providing services, except for the cases specified in Point a, Clause 1, Clause 3 of this Article;

…

Note: Pursuant to Article 1 of Decree No. 102/2021/ND-CP amending and supplementing Decree No. 125/2020/ND-CP, the statute of limitations for sanctioning administrative violations of making invoices at the wrong time is 2 years.