Issue an invoice in case the customer returns the goods due to improper specifications and quality

8/15/2023
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Official Letter 8999/CTTPHCM-TTHT dated July 19, 2023, on electronic invoices issued by Ho Chi Minh City Tax Department on invoicing in case the buyer returns goods due to improper specifications and quality:

When selling goods or providing services, the seller must issue an invoice to deliver to the buyer (including cases where goods and services are used for promotion, advertising, samples, forgiving, giving, giving, exchanging, paying for employees' wages, and for internal consumption (except for goods circulating internally to continue the production process); exporting goods in the form of loans, giving borrow or return goods) and must write all contents on the invoice as prescribed; e-invoices must follow the standard data format of the tax authority.

If an organization or individual buys goods, the seller has issued an invoice, and the buyer has received the goods, but then the buyer discovers that the goods do not conform to specifications or quality, and must return all or part of the goods. The seller shall issue an invoice to return the goods to reduce or replace the invoice already made, and the seller and the buyer have an agreement to state the returned goods clearly.

For goods purchased before January 1, 2023, subject to VAT reduction at the rate of 8%, after December 31, 2022, the buyer returns the goods due to improper specifications and quality, the seller issues an invoice to return the goods at the VAT rate of 8%.

Regarding the issuance of trade discount invoices for goods eligible for VAT reduction according to Decree No. 15/2022/ND-CP:

In case business establishments apply the form of trade discount for customers and for trade discounts of goods eligible for VAT reduction at the rate of 8% sold in 2022 but not issue an invoice showing the trade discount not until January 1, 2023, then:

  • In case the discount amount is made on the last purchase or the next period after December 31, 2022, the discount amount of the sold goods shall be adjusted according to the content of the taxable price and the applicable tax rate in accordance with the tax regulations at the time of issuing invoice.
  • In case the discount amount is made at the end of the discount program (period) after December 31, 2022, the seller shall issue a new invoice to adjust and apply the VAT rate of 8% at the time of selling goods.