HOW TO HANDLE PURCHASE AND SALES INVOICES FOR INDIVIDUAL BUSINESS HOUSEHOLDS?

As an individual business household owner, are you wondering about how to handle purchase and sales invoices? How can you ensure legal compliance and avoid risks during inspections? This article will provide detailed answers to all your questions about invoice management for individual business households.

What Are Legitimate Input Costs?

To ensure costs are legally recognized in accounting books and eligible for tax deduction, businesses need to have the following types of documentation:

1. Value added tax (VAT) invoice from companies

This is the most common type of invoice when transacting between companies and businesses. A valid VAT invoice must have a code from the tax authority, including complete information about the seller, buyer, items, and tax rate.

2. Sales invoice from individual business households

Individual business households can also issue electronic invoices with codes from the tax authority. Businesses can completely use this type of invoice as legitimate input documentation.

3. Import documentationsset

If a business imports goods from abroad, a complete set of import documentation is required, including customs declarations, payment documents, and international purchase contracts to prove the origin of goods.

Special Cases Where Invoices Are Not Required

According to Vietnamese tax law regulations, there are some cases where businesses purchasing goods and services do not need invoices but can still have legitimate expense recognition. However, these cases need to meet specific conditions and procedures.

1. When purchasing goods and services in the following cases, businesses do not need VAT invoices:

• Agricultural, forestry, and aquatic products from producers who directly harvest and sell
• Handicraft products made from jute, sedge, bamboo, rattan, leaves, rush, straw, coconut husk, coconut shell, or recycled materials from agricultural products by non-commercial handicraft producers who directly sell
• Soil, rocks, sand, and gravel from households and individuals who directly extract and sell
• Scrap materials purchased from people who directly collect them
• Assets and services from non-commercial households and individuals who directly sell are also not required to have invoices. This applies when purchasing personal assets such as used vehicles and personal items from citizens.
• Purchasing goods and services from individuals and business households with revenue below the VAT threshold of 100 million VND per year do not require VAT invoices.

2. Requirements when there is no invoice

Although VAT invoices are not required, businesses must still complete the following procedures to ensure legitimate expenses:

• Prepare a purchase list for goods and services according to Form 01/TNDN issued with Circular 78/2014/TT-BTC. This list must be accompanied by payment documents for the seller or service provider.
• Prepare complete documentation:

• Purchase contract
• Payment documents: payment request form, payment receipt (if paying in cash) or debit note (if paying through bank)
• Goods delivery record

Risks When Not Having Legitimate Input Documentation

1. Tax impact

The absence or lack of legitimate input documentation will have different impacts depending on the revenue scale of the business household.

• For business households with revenue over 3 billion VND per year: Not having input invoices means expenses are not recognized. When there are no legitimate input costs to deduct, the tax payable on profit will increase significantly, directly affecting business efficiency.

→ Example: If a business has 500 million VND in expenses but no invoices, with a 20% tax rate, the business will have to pay an additional 100 million VND in taxes.

• For the revenue group under 3 billion VND: taxes will not be significantly affected because tax is calculated on revenue at a fixed rate (expenses are not calculated). However, this does not mean that documentation retention can be overlooked as there are many other risks.

2. Legal Risks

Inspection of goods origin and source:

This is the biggest risk that many businesses are not yet aware of. When tax authorities discover incomplete input documentation, they have the right to inspect the origin of goods and report information to inter-agency authorities.

Market management inspection:

Market management coordinating with tax authorities can directly come to inspect business establishments. Consequences may include:

• Administrative violation fines
• Confiscation of goods with unclear origin
• More severe legal penalties depending on the violation level

Special risks for regulated industries:

Industries such as pharmaceuticals, medical services, food, beverages, imported branded goods have many strict regulations regarding origin and licenses. Operating without complete input documentation in these industries can lead to:

• Business suspension
• Heavy fines according to specialized regulations
• Criminal prosecution in some serious cases

Sales Invoices for Individual Business Households

1. Modern electronic invoice solutions

Currently, most business households have switched to using electronic invoices from cash register systems to optimize the sales process. This is a solution combining sales management software with the tax authority’s electronic invoice system.

Popular sales software chosen by many business households include:

• KiotViet: Integrated sales management and invoice issuance solution
• Haravan: E-commerce platform with electronic invoice features
• IPOS: Store management software with automatic invoice system

2. Automatic invoice issuance process

When sales staff enter product and customer information into the sales software, the system will automatically connect with the tax authority’s electronic invoice system and issue invoices immediately. This helps save time and ensure accuracy.

3. Important costs to note

Businesses need to budget for:

• Purchasing invoices from tax authorities
• Issuing and using electronic invoices
• Registering for sales management software

Advice for Businesses

• Always request input invoices when purchasing goods and services from other companies and businesses
• Prepare complete purchase lists in special cases without invoices
• Retain payment documents such as payment receipts and bank debit notes
• Pay special attention to goods origin for regulated industries
• Use electronic invoice software to manage sales efficiently and transparently

Invoice input management not only helps businesses optimize taxes but also protects businesses from serious legal risks. Investing reasonable time and costs in accounting and documentation work is the best way to protect sustainable business development.

If you are having difficulty handling invoices, preparing purchase lists, or worried about inspection risks from tax authorities, 1KETOAN is ready to support with comprehensive accounting services specifically for individual business households.

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