Knowledge Hub Vietnam

​“Can you issue a VAT invoice?” – This is a common question service providers in Vietnam hear from clients. While the request seems simple, its legal requirements are often misunderstood. 

In this article, we break down the key rules for issuing VAT service invoices, highlight common exceptions, and explain why understanding the timing matters, especially when advance payments or milestone-based projects are involved. 

 

Legal Basis 

The issuance of VAT invoices for services is governed by Decree 123/2020/NĐ-CP, specifically: 

• Article 4(1) – General rule for invoice issuance 

• Article 9(2) – Exceptions for deposits and advance payments 

These rules apply to all service providers operating in Vietnam, regardless of whether the client is domestic or international. 

 

General Rule: Invoice Upon Completion 

The core principle is straightforward: 

A VAT invoice must be issued when the service is completed, regardless of whether payment has been received. 

This means that even if your client hasn’t paid yet, you are legally required to issue the invoice once the service is delivered. 

Example: You complete a translation project. Even if the client pays two weeks later, the invoice must be issued now, at the time of completion. 

 

Advance Payments: Invoice at Time of Payment 

If the client pays in advance or during the service period, the law requires that: 

A VAT invoice must be issued at the time of payment. 

Example: A client pays 50% upfront for a photography session. You must issue a VAT invoice immediately for that amount, even if the session is scheduled for next week. 

 

Exception: Deposits for Certain Service Contracts 

Not all advance payments require immediate invoicing. According to Article 9(2) of the Decree: 

Deposits or advance payments made to secure the execution of specific service contracts do not require a VAT invoice at the time of payment. 

This applies to contracts for services such as: 

• Accounting and auditing 

• Financial or tax consulting 

• Project planning and supervision 

• Technical design and engineering 

Example: A company pays you 30% in advance for a tax consulting project. Since this is a deposit under a consulting contract, you are not required to issue a VAT invoice at the time of payment. The invoice is issued only upon completion of the service. 

 

Milestone-Based or Partial Services 

For services delivered in phases or milestones, the rule is: 

A VAT invoice must be issued for each completed part of the service. 

 Example: A software development project is divided into three phases. After completing Phase 1, you must issue an invoice for that portion, even if the full project is ongoing. 

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❓ Common Misunderstandings 

 

 

 

 

 

 

 

 

 

 

​Conclusion 

Issuing VAT invoices for services in Vietnam is not just a formality – it’s a legal requirement with specific timing rules.  

 

Please note that this information is provided without liability and may not be complete, accurate, or up to date. For legally binding advice, please consult a qualified lawyer.  

A list of German lawyers can be found here.