Customer overpaid, did not use the service: Do I need an invoice?

When customers overpay or do not use the service, many businesses are confused about whether they need to issue a value-added tax invoice or not. What are the regulations?

During the transaction process, many businesses and business households encounter situations where customers transfer more money than the order value, or deposit money in advance but then do not use the goods or services, nor request a refund.

In these cases, many people wonder whether a VAT invoice is required and, if so, what tax rate is applied.

Pursuant to Clause 1, Article 4 of Decree 123/2020/ND-CP dated October 19, 2020 of the Government regulating invoices and documents, clearly states the principles of making, managing and using invoices and documents.

Customers overpay or do not use the service, many businesses are confused about whether they need to issue a VAT invoice or not? Illustrative photo

Accordingly, when selling goods or providing services, the seller must issue an invoice to deliver to the buyer (including cases of goods and services used for promotion, advertising, samples; goods and services used for giving, presenting, exchanging, paying in lieu of salary to employees and internal consumption (except for goods circulated internally to continue the production process); exporting goods in the form of loans, lending or returning goods) and must fully record the content as prescribed in Article 10 of this Decree. In case of using electronic invoices, it must follow the standard data format of the tax authority as prescribed in Article 12 of this Decree.

In addition, pursuant to Article 2 of Circular 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance guiding the implementation of the Law on Value Added Tax and Decree 209/2013/ND-CP of the Government detailing and guiding the implementation of a number of articles of the Law on Value Added Tax, it is stated that taxable entity

Specifically, the subjects subject to value added tax are goods and services used for production, business and consumption in Vietnam (including goods and services purchased from organizations and individuals abroad), except for subjects not subject to value added tax as guided in Article 4 of this Circular.

Pursuant to Clause 1, Article 5 of Circular 219/2013/TT-BTC, the following cases are not required to declare and pay value added tax: Organizations and individuals receiving compensation in cash (including compensation for land and resettlement support); bonuses, support money; transfer of emission rights and other financial revenues. Business establishments are not required to declare and pay value added tax on the above-mentioned revenues.

Therefore, for the amount of money that customers pay in excess but do not get back, or the money is transferred but there is no activity of providing goods or services, the enterprise does not have to issue a value-added tax invoice. These are revenues that do not give rise to the obligation to declare and pay value-added tax according to current regulations.

Thanh Binh

Source: https://congthuong.vn/khach-hang-tra-thua-tien-khong-dung-dich-vu-co-can-hoa-don-391680.html