Receipts for non-cash payments for deducting input VAT in Vietnam

Hi DMS Law office in Vietnam! Can you advise me about Receipts for non-cash payments which are used for deducting input VAT in Vietnam ?

Hi!

Receipts for non-cash payments include bank transfer receipts and other receipts for non-cash payments.

Receipts for non-cash payments:

Receipts for non-cash payments include bank transfer receipts and other receipts for non-cash payments.

Bank transfer receipts:

Bank transfer receipts are the documents proving the transfer of money from the buyer’s account to the seller’s account opened at providers of payment services in legitimate forms such as checks, payment order, collection order, banking card, credit card, SIM card (digital wallet), and other methods of payment (even when the buyer transfer money from the buyer’s account to the seller’s account bearing the name of a private enterprise’s owner, or when the buyer transfer money from the buyer’s account bearing the name of a private enterprise’s owner to the seller’s account).

Receipts for cash deposit to the seller’s account or the payment receipts that are not conformable with current law are not sufficient for refund or deduction of VAT on the purchases that cost VND 20 million or more.

VAT on any one-off purchase that costs VND 20 million or more (VAT-inclusive) shall not be deducted if no bank transfer receipt is presented.

For goods, services bought under a deferred payment plan or installment plan that cost VND 20 million or more based on the written purchase agreement, VAT invoices and bank transfer receipt the taxpayer shall declare and deduct input VAT on the purchase. If the bank transfer receipt is not available because the payment deadline is not due, the taxpayer may still declare, deduct input VAT.

If bank transfer receipts are not available when the payment is due, the taxpayer must declare, adjust to reduce the input VAT which was deducted corresponding to the value of goods, services without bank transfer receipts in the tax period which the cash-in-hand payment is made (even where the tax authorities have issued a decision on tax inspection, tax examination for the tax period when the input VAT was deducted)

Other receipts for non-cash payments:

Other cases in which non-cash payments are used for deducting input VAT:

If goods and services are purchased by offsetting their value against the value of sold goods and services, or by lending goods under contracts, there must be an official record of the data collation and confirmation about such offsetting made by both parties. If debt is offset through a third party, there must be an official record of such offsetting signed by the three parties for the purpose of deducting input VAT.

If goods and services are purchased by debt offsetting of a loan, a borrowing or offset of debt through a third party under contracts, then there must be lending, borrowing agreements made earlier and there must be bank transfer receipts from the lender’s bank account to the borrower’s bank account for the loan, including cases where goods, services bought are offset against the allowance given to the buyer by the seller, or paid by the buyer on behalf of the seller.

If a third party is authorized to receive the payment for purchases by bank transfer (including the case in which the seller requests the buyer to wire the payment to a third party appointed by the seller), this authorization must be agreed in the written contract, and the third party must be a lawful legal person or a natural person.

After payments are made these ways, if the remaining value is paid in cash that is VND 20 million or more, tax shall only be deducted corresponding to the amount having bank transfer receipts.

If payment for purchases is wired to a third party’s account at a State Treasury, which is opened to enforce collection of money, assets hold by another organization, individual (according to a Decision of a competent state agency), input VAT may still be deducted (Clauses 3, 4 Article 15 Circular No.14/VBHN-BTC dated May 09, 2018).

Related topics:

Differences in tax position of individual investors in Vietnam

Conditions for input VAT deduction

Consulting services:

Phone: 0914 165 703 or email: dmslawfirm@gmail.com

Receipts for non-cash payments for deducting input VAT in Vietnam