Mistakes in issuing invoices that are subject to penalties: penalties, statutes of limitations, and remedies

In tax management, invoices are not only ordinary accounting documents but also direct bases for the tax authorities to determine a company's revenue, expenses, and tax obligations. In reality, many businesses and households are penalized not for intentional violations, but for issuing invoices at the wrong time, misrepresenting the nature of transactions, or using invalid invoices.

The following article summarizes common invoice issuance errors that incur penalties, along with specific penalties, statutes of limitations for penalties, and remedies for incorrect invoices, to help businesses proactively avoid legal risks.

Error 1: Issuing invoices at the wrong time

When is an invoice considered issued at the wrong time?

A business is considered to have issued an invoice at the wrong time when the invoice is not issued at the time stipulated by law, including common cases:

• Goods have been delivered or services completed, but the invoice is issued late
• Invoice issued before goods delivery or service completion
• Invoice recorded in the wrong accounting period, leading to discrepancies in revenue and tax obligations
• This error is often detected when tax authorities reconcile the actual transaction time with electronic invoice data.

Penalties for issuing invoices at the wrong time

According to Decree 125/2020/ND-CP (effective until January 16, 2026)

• Warning: Applied when an invoice is issued at the wrong time but does not cause delayed tax obligations and there are mitigating circumstances.
• Fine from VND 3,000,000 to VND 5,000,000: Applied when an invoice is issued at the wrong time but does not lead to delayed tax obligations.
• Fine from VND 4,000,000 to VND 8,000,000: Applied for issuing invoices at the wrong time as per regulations on goods sales and service provision.

According to Decree 310/2025/ND-CP (effective from January 16, 2026)

Penalties are determined by the number of violating invoices:

• Warning: Promotional goods, advertisements, samples, gifts, internal use, issuance of goods under forms of loan, borrowing, or return of goods; issuance of 01 invoice.
• Fine from VND 500,000 - 1,500,000: From 02 to less than 10 invoices (issuance of goods under forms of loan, borrowing, or return of goods); 01 invoice (issuing invoice at the wrong time when selling goods/services).
• Fine from VND 2,000,000 - 5,000,000: From 10 to less than 50 invoices (issuance of goods under forms of loan, borrowing, or return of goods); From 01 to less than 10 invoices (issuing invoice at the wrong time when selling goods/services).
• Fine from VND 5,000,000 - 15,000,000: From 50 to less than 100 invoices (issuance of goods under forms of loan, borrowing, or return of goods); From 10 to less than 20 invoices (issuing invoice at the wrong time when selling goods/services).
• Fine from VND 15,000,000 - 30,000,000: 100 invoices or more (issuance of goods under forms of loan, borrowing, or return of goods); From 10 to less than 20 invoices (issuing invoice at the wrong time when selling goods/services).
• Fine from VND 30,000,000 - 50,000,000: 50 to less than 100 invoices (selling goods, providing services).
• Fine from VND 50,000,000 - 70,000,000: 100 invoices or more (selling goods, providing services).

Remedies when an invoice has been issued at the wrong time

For the seller

• Re-determine the actual transaction time
• Declare VAT and record corporate income tax revenue in the period the transaction occurred, not according to the invoice issuance date.
• Adjust tax declaration records if incorrectly declared for the period.

For the buyer

• Declare input VAT in the period the invoice was received.
• Record corporate income tax expenses in the period the actual transaction occurred.

If an invoice is found to be issued at the wrong time, the buyer should request the seller to make timely corrections to avoid the risk of using invalid invoices.

Illustrative example

Invoice issued on January 1, 2026, but goods actually delivered on December 31, 2025:

• The seller records revenue and declares tax for December 2025.
• The buyer declares VAT in January 2026, but records expenses in 2025.

Error 2: Issuing fictitious invoices or using illegal invoices

What is a fictitious invoice?

A fictitious invoice is an invoice that does not reflect the actual economic transaction, including:

• Fake invoice, no actual transaction: Invoice with complete information, but the sale and purchase of goods/services did not occur in reality, or only partially occurred.
• Incorrectly reflects the actual value: Invoice shows a value higher or lower than the actual value of the goods/services sold.
• Invoice lacks mandatory content: Invoice does not include all required information such as the name, address, tax code of the seller and buyer, date, description of goods/services, unit of measure, quantity, unit price, and total amount as stipulated.
• Invoice altered or modified incorrectly: Invoice is erased or modified without complying with regulations on invoice amendments.
• Discrepancy between invoice copies: Values on different copies of the invoice do not match.
• Using invoices from other organizations or individuals to legitimize: Using invoices not belonging to one's own company to prove purchased or sold goods/services.
• Using invoices that have been determined by competent authorities to be used illegally: Invoices determined by tax authorities, police, or other competent authorities to be used illegally.
• Invoices issued by an entity not authorized to issue invoices, or invoices not yet valid for use.

Penalties for issuing fictitious invoices

Penalties for incorrect tax declaration leading to understated tax payable or overstated tax exemptions, reductions, or refunds.

A penalty of 20% of the understated tax amount or the overstated exempted, reduced, or refunded tax amount for using illegal invoices or documents to account for purchased goods/services, thereby reducing the tax payable or increasing the tax refund, exemption, or reduction, but when detected by tax authorities during inspection, the buyer can prove that the violation of using illegal invoices/documents belongs to the seller and the buyer has fully accounted for it according to regulations.

Penalties for tax evasion (Article 17 of Decree 125/2020/ND-CP): Depending on the severity of the violation and aggravating/mitigating circumstances, the specific penalties are as follows:

• Fine equal to 1 time the evaded tax amount, if the violator has at least one mitigating circumstance.
• Fine equal to 1.5 times the evaded tax amount, if there are no aggravating or mitigating circumstances.
• Fine equal to 2 times the evaded tax amount, if there is one aggravating circumstance.
• Fine equal to 2.5 times the evaded tax amount, if there are two aggravating circumstances.
• Fine equal to 3 times the evaded tax amount, if there are three or more aggravating circumstances.

In serious cases, individuals and commercial legal entities may be prosecuted according to the Penal Code.

Remedies when a fictitious invoice is detected

When an invoice is found not to reflect the actual transaction:

• Stop using that invoice for tax declaration.
• Review all contracts, delivery documents, and payment documents.
• Adjust accounting books and tax records if incorrectly accounted for.
• Proactively cooperate with tax authorities in cases of high risk.

Continuing to use incorrect invoices after detection may be considered an intentional violation, leading to heavier penalties.

Statute of limitations for invoice violations

According to the law on administrative sanctions for tax and invoice violations, the statute of limitations for administrative sanctions related to invoices is 02 years.

How to determine the start of the statute of limitations:

• For completed violations, the statute of limitations starts from the date the violation ceases.
• For ongoing violations, the statute of limitations starts from the date the competent authority detects it.

This means that even after a business has corrected its errors, the risk of penalties still exists for 02 years.

Conclusion

Invoice issuance errors, from wrong timing to fictitious invoices, all have clear penalty frameworks and statutes of limitations extending up to 02 years. In an era of increasingly data-driven tax management, issuing invoices that do not reflect the nature of transactions poses significant risks of penalties, back taxes, and legal liabilities.

Proactively controlling sales transactions, revenue, and invoice issuance times from the outset is key to minimizing risks for businesses. With a centralized management platform like GTG CRM, businesses can track orders, revenue, and invoices within a single system, thus enabling timely invoice issuance, transparent sales data, and support for tax obligation optimization, especially for small businesses and sole proprietorships facing pressure from lump-sum taxes and tax inspections.