Decree 123/2020/ND-CP dated October 19, 2020, issued by the Government, provides detailed regulations on invoices and supporting documents, including provisions related to the recording of trade discounts on invoices and how to handle invoice errors. This article aims to help businesses and individuals better understand these regulations to ensure compliance with the law and effective invoice management.

1. Regulations on Trade Discounts on Invoices 

According to point d, clause 6 of Article 10 of Decree 123/2020/ND-CP, when applying trade discounts, businesses must clearly state the discount amount on the invoice. The calculation of the value added tax base will be performed in accordance with the provisions of value added tax law.

• Cases of discounts:
  • Discounts based on the quantity or sales of goods and services.
  • Discounts under promotional programs.
• Recording discounts:
  • In cases where discounts are calculated immediately upon sale: The discount amount will be deducted directly from the value of the goods on the invoice.
  • In cases where discounts are calculated at the end of the period: The business will issue an adjustment invoice to record the discount amount, along with a list of invoices to be adjusted.

2. Regulations on Handling Invoice Errors 

Article 19 of Decree 123/2020/ND-CP stipulates specific cases and methods for handling invoice errors.

• Electronic invoices that have been assigned a tax code but not yet sent to the buyer:
  • Notify the tax authority: The business must notify the tax authority about the invoice error and request to cancel that invoice.
  • Issue a new invoice: The business will issue a new invoice to replace the old one.
• Electronic invoices with or without a tax code that have been sent to the buyer:
• • Errors in the buyer’s name or address but not the tax code: The business only needs to notify the buyer and the tax authority.
  • Errors in the tax code, amount, tax rate, or goods listed on the invoice that do not meet the specifications or quality: The business can choose one of two methods:
    • Issue an adjustment invoice: The business issues an adjustment invoice to correct the errors. The electronic adjustment invoice must have the phrase “Adjustment for invoice number…, symbol…, number…, date…”.
    • Issue a replacement invoice: The business issues a new invoice to completely replace the old one. The new electronic invoice replacing the erroneous electronic invoice must have the phrase “Replacement for invoice number…, symbol…, number…, date…”.

3. Based on the above regulations 

If a company’s trade discount is based on the quantity or sales of goods and services, the discount amount for the goods sold must be clearly stated on the invoice. If the discount amount is calculated at the end of a promotional program or period, an adjustment invoice will be issued along with a list of invoices to be adjusted, the amount, and the tax amount. Based on the adjustment invoice, the seller and buyer will declare adjustments to purchase and sales revenue, output tax, and input tax.

4. Conclusion 

Compliance with regulations on trade discounts and invoice error handling is essential to ensure the accuracy of invoices and avoid risks during tax audits. Businesses need to master these regulations and establish a strict invoice management process to ensure smooth business operations.

5. References

• Point d, clause 6, Article 10 of Decree 123/2020/ND-CP
• Article 19 of Decree 123/2020/ND-CP
• Tax and accounting websites
• Tax forums and discussion groups