I. Legal basic

• Decree No. 181/2025/ND-CP
• Decree No. 52/2024/ND-CP
• Law on Value-Added Tax 2024

II. The regulation that invoices from VND 5 million and above must be paid via bank transfer in order to be eligible for tax deduction

Pursuant to Article 26 of Decree No. 181/2025/ND-CP, it is stipulated that non-cash payment documents are those that prove non-cash payments in accordance with the provisions of Decree No. 52/2024/ND-CP on non-cash payments, excluding documents showing that the buyer has deposited cash into the seller’s account. Accordingly, the condition for VAT deduction is stipulated as follows: Business establishments must have non-cash payment documents for purchases of goods and services (including imported goods) with a value of 5 million VND or more, including value-added tax. Therefore, from July 1, 2025, enterprises and business establishments with input invoices valued at 5 million VND or more shall only be eligible for value-added tax deduction if payment is made via non-cash methods. 

III. Important cases to note regarding non-cash payments

During the payment process, there are certain special cases that should be noted to avoid ineligibility for VAT deduction.

1. After completing the non-cash payment

In cases where, after making a non-cash payment, the remaining amount is paid in cash with a value of VND 5 million or more, then:

– Value-added tax (VAT) is deductible only when supported by non-cash payment documents.

– The portion paid in cash is not eligible for value-added tax (VAT) deduction.

2. In cases of purchasing goods or services on deferred payment or installment basis

For goods and services purchased on deferred payment or installment terms with a payment value of VND 5 million or more, the business establishment shall base the VAT deduction on the contract, VAT invoice, and non-cash payment documents:

– In cases where payment documents are not yet available because the payment is not yet due under the contract, the enterprise or business establishment is still entitled to deduct input value-added tax (VAT).

– In cases where the payment is due and the business establishment possesses non-cash payment documents, it must declare and adjust to reduce the deductible VAT amount corresponding to the value of goods or services for which there are no non-cash payment documents, in the tax period in which the contractual payment obligation arises. 

3. In cases of imported goods or services, or one-time purchases

Non-cash payment documents are not required for VAT deduction in the following cases:

– Imported goods purchased on a one-time basis with a value under VND 5 million. 

– Goods or services purchased on a one-time basis with an invoice value under VND 5 million (VAT-inclusive). 

– Imported goods that are gifts, donations, or free samples from foreign organizations or individuals. 

4. In cases of purchasing goods or services multiple times in the same day from the same supplier

When purchasing goods or services from the same taxpayer with individual transaction values under VND 5 million, but with a total value of VND 5 million or more on the same day, the enterprise shall only be entitled to deduct value-added tax (VAT) if non-cash payment documents are available. 

5. In cases where an employee is authorized to make purchases on behalf of the enterprise

If the enterprise authorizes an employee to make a non-cash payment and subsequently reimburses the employee, it shall still be considered eligible for VAT deduction, provided that such authorization is clearly stipulated in the company’s financial or internal regulations.

6. Some other cases

• In cases where the buyer makes payment into a third party’s account at the State Treasury pursuant to an enforcement decision issued by a state authority, such payment shall still be considered eligible for VAT deduction.
• In cases of payment made by shares or bonds, a sales contract must be established in advance.
• In cases of borrowing or lending money, there must be a loan agreement established in advance and a bank transfer document showing the transfer from the lender to the borrower.

IV. Taxpayers subject to VAT under the Law on Value-Added Tax 2024

Pursuant to Article 4 of the 2024 Law on Value-Added Tax (effective from July 1, 2025), VAT taxpayers are defined as follows:

• Organizations, households, and individuals that produce or trade in goods and services subject to value-added tax (hereinafter referred to as business establishments).
• Organizations and individuals that import goods subject to value-added tax (hereinafter referred to as importers).
• Organizations and individuals conducting production or business activities in Vietnam that purchase services (including services associated with goods) from foreign organizations without a permanent establishment in Vietnam or from foreign individuals who are non-residents in Vietnam, except for cases specified in Clauses 4 and 5, Article 4 of the 2024 Law on Value-Added Tax; organizations conducting production or business activities in Vietnam that purchase goods or services to carry out petroleum exploration, field development, and oil and gas extraction activities from foreign organizations without a permanent establishment in Vietnam or from foreign individuals who are non-residents in Vietnam.
• Foreign suppliers without a permanent establishment in Vietnam that conduct e-commerce or digital platform-based business activities with organizations and individuals in Vietnam (hereinafter referred to as foreign suppliers); Organizations that are foreign digital platform operators shall withhold and remit tax on behalf of foreign suppliers; business organizations in Vietnam that apply the credit method for value-added tax calculation and purchase services from foreign suppliers without a permanent establishment in Vietnam through e-commerce channels or digital platforms shall withhold and remit the tax payable on behalf of the foreign suppliers.
• Organizations that operate e-commerce trading floors or digital platforms with payment functions shall withhold, declare, and remit taxes on behalf of household businesses and individual businesses conducting business on such e-commerce platforms or digital platforms.

V. Conclusion

The implementation of the new regulation on invoices, which mandates that payments of VND 5 million or more must be made via bank transfer or non-cash methods to be eligible for VAT deduction, contributes to financial transparency and promotes digital transformation. Enterprises and business establishments should proactively develop electronic payment processes and use e-invoices to optimize tax costs and comply with tax authority regulations, thereby avoiding unnecessary financial penalties.

VI. About Us, Hankuk Law Firm

■ Hankuk Law Firm – Introduction

The goal of the legal services provided by HANKUK LAW FIRM is to support businesses, investors, and people. Our organization employs skilled Korean lawyers, partners, and professionals to provide legal services to businesses related to corporations and litigation.

To support the startup process, our lawyers and staff provide a wide range of services, including business law consulting, tax and immigration law consulting, real estate services, business consulting, marketing and communications, human resources, product distribution, franchise options, etc. We provide expert advice on every aspect of your business needs.

To protect the legitimate rights and interests of our clients and achieve the best results, we provide legal advice and participate in civil lawsuits related to business, labor, marriage, family, and inheritance.

■ Contact us now

For reliable and effective legal advice, please contact HANKUK LAW FIRM now. We are committed to providing you with the best possible answers and our team of experienced lawyers has extensive knowledge in many legal fields. We are always here to provide the most competent and dedicated support, whether you are dealing with contractual issues, commercial disputes or need guidance on foreign investment. HANKUK LAW FIRM is honored to have assisted hundreds of domestic and international clients in skillfully resolving complex legal issues as their trusted legal partner. Do not let legal issues hinder your success. Let us accompany you towards legal achievement and comfort. For prompt guidance and support to ensure your rights are always maintained at the highest standards, contact HANKUK LAW FIRM now.

■ Contact Hankuk Law Firm:

Website: http://hankuklawfirm.com/en/  FB: https://www.facebook.com/hankuk.lawfirm  Tiktok: https://www.tiktok.com/@hankuklawfirm Youtube: https://www.youtube.com/@hankuklawfirm6375 Email:  info@hankuklawfirm.com   SĐT: 0942.339.063