Issuing VAT invoices is a mandatory procedure, which is both a legal basis for confirming transactions and a basis for tax authorities to manage tax payment, deduction and refund obligations of enterprises. Incorrectly issuing invoices can lead to legal risks, tax arrears or administrative penalties, and directly affect the reputation of enterprises in the market.
This article will analyze common errors when issuing VAT invoices, combining real case studies from businesses that have used MAN – Master Accountant Network’s services, and draw lessons and solutions. Through that, businesses will realize the importance of managing invoices properly and the value when working with a professional tax consulting unit.
Introduction to VAT invoice issuance
Before going into the errors and how to handle them, it is necessary to understand the nature of invoicing. VAT in business activities. This is not only an administrative procedure but also an important legal evidence proving the transaction between the parties. Enterprises need to carefully check the information before issuing VAT invoices to avoid the risk of being penalized by the tax authorities.
What is VAT invoice?
Issuing a VAT invoice is when a business creates and issues a value-added invoice to a customer when providing goods or services. This invoice is both an important accounting document and a legal basis for the customer to deduct input tax or account for valid expenses.
For businesses, issuing VAT invoices is not only a legal obligation but also an effective financial management tool. Invoices help businesses control revenue, expenses, calculate tax obligations and prepare accurate financial reports. At the same time, issuing invoices in accordance with regulations also helps limit the risk of tax errors, collection or administrative penalties.
Besides, VAT invoice also creates transparency in commercial transactions. Customers and partners can easily confirm the transaction value, protecting the legitimate rights of both parties. Correct implementation of invoice regulations contributes to enhancing the reputation of enterprises in the market, while increasing reliability when participating in business relations, bidding or international cooperation.
The role of VAT invoices
Issuing VAT invoices not only has accounting and tax implications, but also creates transparency in transactions. For customers, invoices are a legal basis for deducting or accounting for expenses. For businesses, this is a financial management tool, helping to limit legal risks and affirm reputation in the market.
| Aspect | Content | Practical significance |
| Tax management | Basis for calculating VAT and corporate income tax | Enterprises declare transparently, avoid fraud |
| Customer Relations | Proof of transaction legitimacy | Create trust, enhance commercial reputation |
| Internal management | Revenue and cost control | Support accurate business decisions |
5 common mistakes when issuing VAT invoices
In reality, errors in issuing VAT invoices can occur in both large and small businesses. The main causes include inexperienced staff, asynchronous accounting systems, or constant changes in legal regulations. If not detected and handled promptly, these errors can lead to administrative fines, tax arrears, and even directly affect the ability of businesses to deduct and refund VAT.
Incorrect information on invoice
The most common mistake is to enter incorrect information about the buyer or seller, such as the company name, tax identification number, address or contract number. In addition, businesses can easily enter incorrect product names, quantities, unit prices or applicable tax rates. These errors make the invoice lose its legal value and are not accepted by the tax authority for VAT deduction.
Incorrect invoice information also affects accounting data, revenue and expense reports, and tax liability calculations. This makes it difficult for businesses to control their finances, especially when making large or frequent transactions with customers.
Invoice timing error
Another common mistake is issuing invoices at the wrong time. According to regulations, VAT invoices must be issued at the time of transfer of ownership of goods or completion of service provision. Many businesses issue invoices too early or too late, causing discrepancies in tax declaration periods.
Incorrect timing of invoices not only puts businesses at risk of being charged back taxes or administratively sanctioned, but also makes it difficult for customers to deduct input tax on time. This directly affects the cash flow and financial planning of the business.
Invoice format error
Although electronic invoices have become the norm, many businesses still have problems with the format of invoices. Some businesses use paper invoices that are not in the correct format, lack authentication codes, or are in the wrong format. Additionally, invoices that are blurry, smudged, or contain unclear information are also common errors.
These errors prevent tax authorities from recognizing the legal value of invoices and complicate the process of checking, storing and comparing documents. Ensuring the correct form of invoices is a prerequisite for invoices to be legally accepted.
Errors in tax rates and tax amounts
Misapplication VAT rate is a common mistake, especially when businesses carry out many types of goods and services with different tax rates. For example, taxable goods 10% but recorded as 8%, taxable services 5% but calculated as 0%, or incorrect addition and subtraction in calculating the total amount before tax and VAT.
When detecting errors in tax rates, businesses are required to issue adjusted invoices according to regulations. If not done correctly, the invoice will be considered invalid, leading to the risk of being fined, losing the right to deduct input tax and affecting financial management.
Errors in invoice cancellation and adjustment
When errors are discovered, many businesses do not follow the correct procedures for canceling and adjusting invoices. They may not make a cancellation record, issue an adjustment invoice, or notify the tax authorities in a timely manner.
This leads to a skewed invoice management system, which is easily assessed as tax fraud and increases the risk of being audited and inspected. Properly following the invoice cancellation and adjustment process helps businesses ensure legality and transparency, while maintaining a stable accounting and tax management system.
| STT | Error | Explain | Harmful effects / Notes |
| 1 | Incorrect information on invoice | Incorrect company name, tax code, address, contract number, product name, quantity, unit price or tax rate. | Invoices lose legal value, cannot be deducted; incorrect accounting data; affects cost management and financial reporting. |
| 2 | Incorrect billing time | Invoicing too early or too late relative to the time of delivery of goods or completion of services. | Difference in tax declaration period; being charged back or administratively fined; customers not deducting on time; affecting business cash flow. |
| 3 | Incorrect invoice form | Using paper invoices that are not in the correct format, lack authentication codes, or are in the wrong format; invoices that are blurry, smudged, or have unclear information. | Tax authorities do not recognize; complicated checking, storing and comparing documents; increased legal risks. |
| 4 | Incorrect tax rate and tax amount | Wrong tax rate applied (for example: 10% record 8%, 5% record 0%), wrong addition and subtraction in total amount before tax and VAT amount. | Must issue adjusted invoice; invoice is considered invalid; loss of input tax deduction rights; affects financial management. |
| 5 | Errors in invoice cancellation and adjustment | No cancellation record, no adjustment invoice, no timely notification to tax authorities. | Invoice management system is skewed; susceptible to tax fraud assessment; increases risk of inspection; reduces transparency and legality. |
Consequences of errors in issuing VAT invoices
Errors in issuing VAT invoices not only cause difficulties in accounting and declaration, but also lead to many legal and financial consequences. Depending on the level of violation, businesses may be subject to administrative penalties, tax arrears, and even affect their reputation and ability to cooperate with domestic and foreign partners.
Administrative penalties for tax and invoices
According to Decree 125/2020/ND-CP, errors in issuing VAT invoices can be fined from several million to tens of millions of VND. For example, if an invoice is issued at the wrong time, the fine will be from 4-8 million VND, or if an invoice has incorrect content, the fine will be from 2-4 million VND. These fines increase the administrative costs of the business. Tax authorities can impose heavy fines if the business repeatedly issues invalid VAT invoices.
Risk of being charged VAT and other taxes
When an invoice is deemed invalid, the input VAT cannot be deducted, meaning that the business must pay additional tax. In many cases, the tax authorities also apply measures to collect related taxes, along with late payment fees. This is a huge financial burden, especially for small businesses.
Impact on reputation and ability to cooperate
Errors in issuing VAT invoices can make partners doubt the transparency and professionalism of the business. This directly affects commercial contracts, especially in import and export, where legal compliance is a prerequisite for long-term cooperation. Some small businesses are often subjective when issuing VAT invoices, leading to additional collection and loss of reputation with partners.
Disruption of business operations
Having to adjust, cancel invoices or wait for tax authorities to resolve errors takes time, affecting payment schedules and cash flow. In a context where businesses need continuous working capital, these disruptions can slow down production and business plans.
| Consequence | Specific content | Impact on business |
| Administrative sanctions | Fine from 2-8 million VND depending on the level of violation | Increased administrative costs, loss of resources |
| Tax collection | Not deductible, subject to VAT and related taxes | Financial burden, cash flow risk |
| Loss of reputation | Partners doubt transparency and professionalism | Affecting contracts, reducing cooperation opportunities |
| Interruption of operations | Time consuming to adjust and handle errors | Slow business plan, affecting liquidity |
Case Study: Businesses handle errors when issuing VAT invoices
In reality, errors in VAT invoices can arise for a variety of reasons – from accounting errors to poor management processes. Here are two typical cases that show how businesses handled them and the valuable lessons to avoid repeating them.
Case 1: Issue VAT invoice at wrong time
Company A operates in the logistics sector and provided international transportation services to customers on March 10, 2025, but the accountant issued a VAT invoice on March 25, 2025. This 15-day discrepancy violates the regulations on the time of invoice issuance and may be subject to penalties under Decree 123/2020/ND-CP.
Not only that, in the issued invoice, the tax rate is recorded as 8% instead of 10% as prescribed. When the tax authority inspects, the enterprise must explain and comply with the administrative penalty. To remedy the situation, Company A makes a record of invoice adjustment, sends a notice with documents to the tax authority, and pays the fine according to regulations. At the same time, the enterprise deploys electronic invoice management software with integrated deadline warnings to ensure that invoices are issued on time in the future.
Lessons learned: Errors in invoice timing not only lead to fines but also affect the reputation with customers. Enterprises need to establish internal monitoring processes and integrate warning systems to ensure invoices are issued on time.
Case 2: Incorrect VAT rate invoice
Company B, an agricultural exporter, encountered a situation where the tax rate of an invoice was incorrect. An export shipment was eligible for tax rate 0%, but the accountant issued an invoice with the number 10%. This error caused the company to declare higher taxes than it actually paid, reducing cash flow and causing difficulties in financial planning.
Upon discovery, Company B cancelled the old invoice and issued a new invoice with the correct tax rate 0%. At the same time, the company sent an explanation letter to the tax authority, adjusted the declaration and requested a refund of the difference in overpaid tax. Timely handling helps businesses overcome financial risks and protect their legitimate rights.
Lessons learned: Tax rate errors often come from not understanding the applicable conditions. Businesses need to constantly update legal regulations, train accountants, and apply a checklist before issuing invoices to avoid wasting time and money when having to adjust records.
Tax Services at MAN
For many businesses, errors in issuing VAT invoices not only lead to the risk of administrative penalties, but also directly affect cash flow, profits and brand reputation. Understanding this, MAN - Master Accountant Network provides comprehensive support services, helping businesses feel secure in all stages of tax management.
Main services include:
- Full accounting: MAN is responsible for all accounting and tax work, ensuring VAT invoices are issued in accordance with regulations, books match financial reports and tax declarations.
- Periodic tax reporting: Declare and pay VAT monthly/quarterly, review input and output invoices to promptly detect and handle errors.
- Tax settlement: Support businesses in settlement periods with tax authorities, including handling situations of errors in issuing VAT invoices for many years.
- In-depth tax consulting: Timely updates on new regulations, consulting on internal control procedures for invoices, from preparation, issuance, adjustment to cancellation of invoices.
With this approach, businesses not only reduce legal risks, but also increase transparency in financial management and strengthen their reputation with partners and customers. When using the service, businesses can rest assured that every time they issue VAT invoices, they are in accordance with the law and standards.
Benefits of using services at MAN – Master Accountant Network
Using services at MAN provides businesses with comprehensive support in all areas of accounting, tax and financial management. From VAT consulting, tax refund declaration, invoice error handling, to full accounting or auditing services, MAN helps businesses operate effectively, minimize risks and optimize profits. Including:
Save time and effort
MAN performs the entire accounting and tax process for businesses, from financial reporting, tax declaration, electronic invoice management to VAT refund. Businesses do not need to worry about cumbersome procedures or complicated legal regulations.
This allows business personnel to focus on core business activities, improving productivity and efficiency. At the same time, tax and accounting tasks are performed on time and accurately, minimizing errors caused by humans or lack of experience.
Minimize legal and tax risks
MAN has a team of experts with in-depth knowledge of tax laws, helping to promptly detect and handle errors when issuing invoices, declaring taxes or refunding VAT. Businesses will be given detailed instructions to comply with legal regulations, avoiding violations that lead to fines or tax arrears.
As a result, legal risks are minimized, while the business's reputation is protected before tax authorities, partners and customers. This peace of mind helps businesses focus on business development without worrying about interruptions due to tax issues.
Optimize tax refunds and profits
MAN advises, prepares documents and supports businesses in refunding VAT accurately and quickly. This helps release cash flow held back in input taxes, thereby giving businesses working capital to reinvest or pay for production and business activities.
In addition, timely tax refunds also help businesses optimize costs and improve overall financial efficiency. Transparent and legal processes also minimize the risk of being inspected or audited, thereby keeping business profits unaffected.
Improve transparency and financial governance
MAN provides professional accounting, auditing and document management services, helping businesses maintain a transparent and accurate financial management system. Documents, invoices and reports are fully stored and easy to retrieve when needed.
This not only meets the requirements of tax authorities but also enhances the reputation of the business with partners and investors. A tight management system helps businesses control cash flow well, limit the risk of fraud and ensure all financial activities are transparent and reliable.
Strategic consulting and long-term support
MAN not only provides administrative services but also accompanies businesses in tax strategy planning, long-term financial planning and cost control. Businesses are advised to optimize tax obligations, forecast cash flows and plan effective capital.
This long-term companionship helps businesses take the initiative in sustainable development and improve their competitiveness in the market. Professional processes and clear strategies help businesses reduce financial risks, maximize tax incentives and effectively exploit available resources.
Conclude
Issuing VAT invoices is a familiar task but it is fraught with risks. Errors in invoicing not only affect reputation and customer relations but can also lead to administrative fines, tax arrears or loss of deduction rights. Real case studies show that handling errors requires in-depth understanding of legal regulations and accurate accounting skills.
In the context of increasingly strict tax policies, businesses need to proactively equip themselves with knowledge and seek support from reputable consulting firms. MAN – Master Accountant Network Chosen by many businesses for its solid expertise in VAT and ability to provide comprehensive, cost-effective and efficient solutions.
If your business wants to ensure full compliance with the new regulations on VAT invoices, from setting up the invoice issuance process, accounting for documents to handling errors, MAN is always ready to accompany you. With a team of experienced experts and a modern management tool system, we are committed to optimizing tax obligations, minimizing risks and improving financial efficiency.
Contact information:
MAN – Master Accountant Network
- Address: No. 19A, Street 43, Tan Thuan Ward, Ho Chi Minh City
- Hotline: 0903 963 163 – 0903 428 622
- E-mail: man@man.net.vn
