Knowing how to identify legitimate, valid, and reasonable invoices is crucial, especially given the increasing prevalence of illegal invoice usage today.
Businesses need to equip themselves with knowledge because they are the first to be affected by invoices that do not comply with current regulations.
1. Legality of the invoice
1.1. What does it mean to use an "illegal invoice"?
The regulations governing invoices do not provide a definition of a "legal invoice." However, through the regulations on the use of illegal invoices, we can identify them as follows:
First, a legal invoice is one that complies with legal regulations. An illegal invoice is one that falls under the cases specified in Clause 9, Article 3 of the law. Decree 123/2020/ND-CP, details include the following cases:
- Fake invoices and documents;
- Invoices and documents that are not yet valid or have expired;
- Invoices are suspended from use during periods of enforcement through invoicing suspension measures, except in cases where their use is permitted as notified by the tax authorities;
- Electronic invoices that are not registered for use with the tax authorities;
- Electronic invoices that do not yet have a tax authority code, in cases where electronic invoices with a tax authority code are to be used;
- Invoices for goods and services must have a date of issuance from the date the tax authority determines that the seller is not operating at the business address registered with the competent state authority;
- Invoices and purchase documents for goods and services that are dated before the date the issuer is determined to be no longer operating at the registered business address, or before the tax authority has notified the issuer that the issuer is no longer operating at the registered business address, but which the tax authority, police, or other relevant agencies have concluded are illegal.
So Using "illegal invoices" This involves using invoices and supporting documents as mentioned in the seven cases above, or other cases as prescribed by law.
1.2. What does "illegal use" of invoices mean?
Illegal use of invoices and documents refers to the illegal use of invoices and documents as stipulated in Clause 9, Article 3 of... Decree 123/2020/ND-CP, details include the following cases:
- Invoices and supporting documents do not contain all the required information as stipulated by regulations;
- Invoices that have been altered or corrected improperly;
- Using fictitious invoices and documents (invoices and documents that record economic transaction details and content, but the purchase and sale of goods or services are partially or wholly fictitious);
- Using invoices that do not reflect the actual value of the transaction, or creating fictitious or fake invoices;
- Using invoices with discrepancies in the value of goods or services, or inaccuracies in mandatory information between different copies of the invoice;
- Using invoices to facilitate the movement of goods during circulation or using invoices for one type of goods or service to substantiate another type of goods or service;
- Using invoices and documents from other organizations or individuals (except for invoices from tax authorities and in cases where invoice issuance is authorized) to legitimize purchased goods and services or sold goods and services;
- Using invoices or documents that the tax authorities, the police, or other competent authorities have concluded are illegally used.
Therefore, to comply with regulations when using invoices, the invoice issuer needs to avoid 8 situations. "Illegal use"the aforementioned invoice.
2. The reasonableness of the invoice
An invoice, when put into use, must not only be legal but also reasonable. An invoice is reasonable if it is consistent with the business activities of the business organization.
The tax authorities always present arguments regarding the reasonableness of expenses incurred by businesses during the period to exclude them from deductible expenses. If a business cannot prove, refute, or convince the tax authorities of the logic, reasonableness, and authenticity of its expenses, it will be subject to assessment and tax collection.
Therefore, to ensure reasonableness, businesses need to ensure that the expenses incurred are justified, relevant, and serve the production and business activities.
3. Validity of the invoice
Valid Here, it can only be understood as: customaryAnd in the case of an invoice, which is a legally binding document, relying on it is important. custom That is inappropriate. The invoice must comply. legal (according to regulations of the Law) and reasonable (suitable for business purposesTherefore, the use of the concept of validity is unnecessary and should be eliminated when discussing invoices.
Therefore, when considering whether an invoice is eligible for use, consider the legal and reasonable factors mentioned above.