Understanding Circular 32/2025/TT-BTC: Vietnam’s Latest Tax Management Update

In recent months, Vietnam has been making significant strides in enhancing its tax management system. A key development in this ongoing effort is Circular No. 32/2025/TT-BTC (“Circular 32”), which details new regulations for electronic invoice (e-invoice) issuance and management. This article delves into the crucial aspects of Circular 32, emphasizing what businesses need to know as these rules come into effect in June 2025.

The Significance of Circular 32

Issued on May 31, 2025, Circular 32 provides comprehensive guidelines regarding various aspects of invoice management, aligning with existing laws such as the 2019 Law on Tax Administration and Decree No. 123/2020/ND-CP. The circular aims to create a more streamlined and efficient tax environment, which is pivotal for both businesses and the government.

Key Features of Circular 32

Circular 32 touches on many facets of tax management, including:

• Strategies to encourage consumers to request invoices when purchasing goods or services.
• Authorization protocols for issuing e-invoices.
• Specifications for invoice numbering.
• Unique circumstances surrounding e-invoice utilization.
• Guidelines for VAT invoices related to refund claims.
• Regulations for e-invoice conversions.
• Criteria for identifying high-risk taxpayers.

E-Invoice Issuance Authorization

Expanded Eligibility for E-Invoice Providers

One of the most noteworthy changes in Circular 32 is the removal of restrictions that previously required the seller and its authorized e-invoice issuers to be related parties. Now, businesses have the flexibility to select e-invoicing partners based solely on the provider’s eligibility to use e-invoices.

Contract Requirements for E-Invoice Authorization

Circular 32 stipulates several mandatory elements that must be included in the e-invoice authorization contracts. The details required include the names, addresses, tax codes, and digital certificates of both parties, along with specifics about the e-invoices to be authorized. This transparent framework enhances accountability and reduces misunderstandings.

E-commerce Platform Responsibilities

Significantly, if business households or individual enterprises authorize an e-commerce platform to issue e-invoices on their behalf, the platform must inform tax authorities about this arrangement. This provision aims to reinforce tax compliance among e-commerce operators.

The E-Invoice Numbering System

Circular 32 introduces a structured e-invoice numbering format that comprises two main components: the form number and a reference code.

• Form Number: This consists of a digit from 1 to 9, representing various types of e-invoices such as VAT, sales, or invoices for public assets.
• Reference Code: A six-character code combining letters and numbers, this serves to indicate whether an invoice contains the tax authority’s authentication code, the year of issuance, and the type of e-invoice.

The clear categorization makes it easier for businesses to understand their invoicing obligations.

Special Cases for E-Invoice Application

E-Invoicing in Financial Leasing

For financial leasing entities, Circular 32 mandates that VAT invoices be issued for leased assets. The regulations specify that these invoices must correspond with input VAT documentation, ensuring precision in tax reporting and compliance.

High-Volume Transaction Regulations

In circumstances involving high-volume, frequent transactions, the circular allows businesses to issue e-invoices after data reconciliation rather than at the point of sale. This is particularly relevant for industries like catering, goods exchanges, and taxi services, facilitating smoother transactional processes.

Eligible Subjects for E-Invoices from Cash Registers

Under Clause 5 of Article 12, specific entities can register for e-invoices generated from cash registers. These entities must be directly selling goods/services to consumers and have secured permission from the tax authority to utilize e-invoices. The invoices must include essential details such as consumer information and the specifics of goods/services sold.

Upcoming Changes Starting June 1, 2025

Mandatory E-Invoice Adoption for Certain Businesses

As delineated in Decree 70, individuals and household businesses generating an annual revenue of VND 1 billion or more from specific sectors must utilize e-invoices generated from cash registers. This requirement elevates the necessity for compliance, especially among smaller enterprises.

Updated Guidelines for Personal Income Tax Withholding Certificates

From June 1, 2025, entities engaging in personal income tax withholding must transition to new electronic certificates that meet Decree 70 standards. Any older certificates identified with inaccuracies will need to be replaced, streamlining tax reporting processes.

Circular 32 exemplifies Vietnam’s commitment to modernizing its tax administration, reflecting the government’s focus on enhancing compliance and accountability. As businesses navigate these changes, staying informed and adapting to the evolving landscape will be crucial to their success in the Vietnamese market.