VIETNAM'S NEW E-INVOICE REGIME

Key Changes Under Circular 32/2025/TT-BTC

AT A GLANCE

On May 31, 2025, the Ministry of Finance issued Circular No. 32/2025/TT-BTC ("Circular 32"), effective June 1, 2025, replacing Circular No. 78/2021/TT-BTC ("Circular 78") in its entirety. Circular 32 provides detailed guidance on Decree No. 70/2025/ND-CP, which amended Decree No. 123/2020/ND-CP on invoices and documents, marking the most significant overhaul of Vietnam's e-invoice framework since the nationwide rollout in 2022.

Key developments include:

·        Expanded third-party authorization for e-invoice issuance, with new obligations for e-commerce platforms;

·        Three new invoice template codes (Nos. 7, 8, 9) targeting e-commerce and integrated invoice-receipt documents;

·        A five-tier high-risk taxpayer identification framework with mandatory 12-month monitoring;

·        Specialized rules for financial leasing (CTTC) and multi-stakeholder VAT refund workflows;

·        Immediate migration deadline for personal income tax (PIT) withholding documents; and

·        Enhanced technical standards for e-invoice solution providers and TVAN operators.

1. REGULATORY OVERVIEW AND TRANSITION

Circular 32 was issued on May 31, 2025 and took effect on June 1, 2025, implementing detailed guidance on Articles 1(3), 1(6), 1(7), 1(11), 1(18), 1(37), and 1(38) of Decree No. 70/2025/ND-CP ("Decree 70"), which amended Decree No. 123/2020/ND-CP ("Decree 123") on invoices and documents.

Unlike previous incremental amendments, Circular 32 represents a comprehensive restructuring of Vietnam's e-invoice legal framework. The transition reflects the government's strategic push toward enhanced fiscal transparency, with particular emphasis on tightening oversight of digital economy and e-commerce transactions.

Practical Impact:

Failure to align e-invoice software systems with Circular 32's new data-structure standards by the June 1, 2025 deadline may result in: (i) outbound invoices being classified as "illegal invoices"; and (ii) denial of input VAT credit claims on non-compliant invoices. Businesses should conduct a comprehensive audit of their e-invoice software APIs to ensure compatibility.

2. THIRD-PARTY INVOICE AUTHORIZATION

Article 4 of Circular 32 sets out the authorization mechanism (ủy nhiệm) for e-invoice issuance, allowing sellers to delegate invoice preparation to third parties. This mechanism is particularly significant for e-commerce platforms managing tax obligations for small-scale individual sellers.

Key Principles (Article 4.1). The authorization must comply with the following requirements:

·        Eligibility: The authorized party must be eligible for e-invoice use and not subject to any "cease use" order under Article 16 of Decree 123 (as amended by Article 1(12) of Decree 70);

·        Written form: A written contract or agreement specifying purpose, duration, and settlement methods;

·        Tax registration: Both parties must file Form 01/ĐKTĐ-HĐĐT to notify the tax authority;

·        Invoice content: Invoices must display the name, address, and tax identification number (TIN) of both the authorizer and authorized party;

·        Tax method alignment: Invoices must strictly follow the authorizer's tax calculation method; and

·        Termination protocol: Under Article 4.1(đ), upon expiry or early termination of the authorization agreement, parties must immediately cancel the public notification on their websites or mass media channels.

E-Commerce Platform Obligations. Where household or individual businesses sell through e-commerce platforms and authorize the platform operator to issue invoices on their behalf, the platform operator bears the responsibility to notify tax authorities directly. Both the platform and the seller must publicly disclose the authorization status on their official websites or mass media channels.

Practical Impact:

Circular 32 effectively shifts compliance liability from decentralized small sellers to platform operators, requiring platforms to implement robust legal and technical vetting processes for all sellers. The termination protocol is a critical compliance trap: failure to remove expired authorization notices may be construed as facilitating fraudulent transactions. Additionally, Circular 32 significantly broadens the pool of eligible authorized parties — Circular 78 previously required the seller to be an "enterprise, economic organization, or other organization" and the third party to be an affiliated entity. These restrictions have been removed.

3. HIGH-RISK TAXPAYER IDENTIFICATION FRAMEWORK

Article 9 of Circular 32 establishes a five-tier risk assessment framework for identifying "high-risk" taxpayers, who face immediate operational restrictions on e-invoice use.

Risk Determination Criteria (Article 9.1). A taxpayer is classified as high-risk if it falls within any of the following tiers:

·        Tier 1: Legal representatives previously linked to entities found guilty of invoice fraud or tax evasion;

·        Tier 2: Entities or individuals flagged for suspicious transactions under anti-money laundering (AML) laws;

·        Tier 3: Businesses with non-concrete addresses (e.g., residential apartments not permitted for business use) or operating outside their registered province;

·        Tier 4: Representatives linked to "ghost companies" — entities that ceased operations without tax finalization or not operating at registered addresses; and

·        Tier 5: Other risk indicators identified by tax authorities requiring specific taxpayer explanation.

Consequences

Flagged taxpayers using non-coded invoices ("K") must switch to tax authority-coded invoices ("C") within 10 working days of notification, pursuant to Article 15 of Decree 123 (as amended by Article 1(11) of Decree 70). A mandatory 12-month monitoring period applies before the taxpayer may apply to resume non-coded invoice use.

Practical Impact:

Coded invoices ("C") require the GDT to issue a validation code before the invoice becomes effective for the buyer, creating a bottleneck in the sales cycle. Any system lag or "high-risk" flag results in immediate cash flow disruptions. Critically, Article 9.2 empowers local Tax Departments to define their own "very high risk" indicators, meaning risk criteria may vary between provinces. Multi-location businesses must maintain decentralized compliance monitoring to address varying local interpretations.

4. SPECIALIZED RULES: FINANCIAL LEASING AND MULTI-DOCUMENT INTEGRATION

Circular 32 introduces targeted provisions to align high-value sectors and international trade activities with the e-invoice ecosystem.

Financial Leasing (CTTC) Compliance. Entities engaged in financial leasing must ensure:

·        Input/output VAT matching: Total output VAT on the lease invoice must exactly match the input VAT from the asset purchase or import document;

·        Symbol verification: Leasing invoices must use the specialized tax rate symbol "CTTC";

·        Early termination protocol: If a lease is terminated early and the asset is recovered, the lessee must adjust the deducted VAT based on the asset's remaining value; and

·        Asset sale: If the recovered asset is subsequently sold, a standard VAT invoice must be issued.

VAT Invoice cum Tax Refund Declaration. Circular 32 prescribes a multi-stakeholder workflow:

·        Part A (Retailer): Records traveler passport, nationality, and commodity details including serial/model numbers;

·        Part B (Customs): Records goods inspection results and calculated refund amounts; and

·        Part C (Bank): Finalizes payment (cash or card) and records transaction timing.

Practical Impact:

The integration of receipts into e-commerce invoices (Codes 7, 8, 9) reduces administrative redundancy but requires a mandatory re-mapping of the General Ledger in ERP systems. Because these documents now serve dual functions (invoice and receipt), accounting software must process multi-layered data fields without corrupting the audit trail.

5. IMPLEMENTATION TIMELINE AND TRANSITIONAL PROVISIONS

Article 12 of Circular 32 sets out the transitional rules, establishing June 1, 2025 as the deadline for compliance.

Key Transitional Rules:

·        PIT withholding documents (Urgent): Organizations must immediately cease using legacy PIT documents and switch to the new e-document format using Form 03/TNCN (Appendix II.A of Circular 32). This is the highest-priority migration item;

·        Retail and household businesses: Shopping malls and hotels already using e-invoices prior to June 1, 2025 may choose to migrate to cash register-initiated invoices or maintain current systems if they meet the new data standards;

·        Cash registers: Household businesses already registered for cash register-initiated e-invoices may continue without re-registration; and

·        Legacy invoice corrections: If errors are discovered in invoices issued under Decree No. 51/2010/ND-CP or Decree No. 04/2014/ND-CP after migration, a replacement e-invoice must be issued with the mandatory wording: "Replacement for Invoice Template No. ... symbol ... number ... date ...".

Practical Impact:

The greatest risk lies in PIT documents. Because PIT finalization occurs months after the fiscal year-end, failure to use the correct electronic format from June 1, 2025 will invalidate employee tax credits, creating significant corporate liability and employee dissatisfaction during annual tax audits.

6. TECHNICAL INFRASTRUCTURE: TVAN AND SOLUTION PROVIDER STANDARDS

Article 11 of Circular 32 establishes the technical and financial criteria that e-invoice solution providers and TVAN (electronic invoice data transmission and reception service) operators must satisfy.

Key Requirements:

·        Solution providers: Minimum 5 staff with IT degrees; proven data processing and storage solutions;

·        TVAN operators: Minimum 20 staff with IT degrees; financial guarantee or escrow of at least VND 5 billion (approximately USD 195,000);

·        Disaster recovery: TVANs must operate a primary and backup data center, with the backup located at least 20 km from the primary facility; and

·        Connectivity: Leased line or MPLS VPN Layer 3 connection with minimum 20 Mbps bandwidth.

Practical Impact:

Businesses bear legal liability for the validity of their invoices. Using a non-compliant or unlisted provider places every transaction at risk of being declared null and void. Organizations should cross-reference their provider's status against the official registry on the GDT portal, with reference to Appendix I.A of Circular 32 (which includes specialized department codes 01–22 for categories such as "Large Taxpayer" and "E-commerce").

 7. RECOMMENDED ACTION ITEMS

Immediate (before or as soon as practicable after June 1, 2025):

·        Migrate all PIT withholding documents to the new electronic format (Form 03/TNCN);

·        Conduct a comprehensive audit and update of e-invoice software systems to meet Circular 32 data-structure standards; and

·        Verify the compliance status of your current e-invoice solution provider on the GDT portal.

Within 30 days:

·        Review and update all existing e-invoice authorization agreements to comply with the new requirements;

·        Train accounting staff on the new invoice symbol and classification system; and

·        Conduct an internal audit of legal representative backgrounds and business registration status across all operating locations.

Within 60–90 days:

·        Coordinate with ERP vendors to assess system readiness for integrated documents (Codes 7, 8, 9);

·        Establish automated compliance monitoring systems, including authorization deadline tracking and risk alerts; and

·        Engage with local Tax Departments to understand supplementary risk criteria applicable in your jurisdiction.

Ongoing:

·        Monitor supplementary guidance from the GDT;

·        Maintain complete compliance records for tax inspections; and

·        Conduct quarterly compliance reassessments during the first year of implementation.

General notes:

• The above is summarised from the current legislations and practices for internal reference only.

• This document cannot be relied upon by any other parties nor included in any submissions, reports, documents or letters required by the relevant regulatory bodies without our prior written consent and/or subject to our approval on the appropriate form and contents; and

• Please kindly noted that SP&A is not a legal firm, our comments provided under this document may include reviewing regulatory documents to be identified as general management consultancy, therefore, should not be considered, nor intended to be, a legal advice.