From July 1, 2025, how to determine taxable prices for promotional goods and services in Vietnam?

From July 1, 2025, how to determine taxable prices for promotional goods and services in Vietnam?

Based on point c, clause 1, Article 7 of the Law on Value-Added Tax 2024 (effective from July 1, 2025) which regulates the taxable prices as follows:

Tax Calculation Price

1. The tax calculation price is regulated as follows:

a) For goods and services sold by business establishments, it is the selling price without value-added tax; for goods and services subject to special consumption tax, it is the selling price including special consumption tax but excluding value-added tax; for goods subject to environmental protection tax, it is the selling price including environmental protection tax but excluding value-added tax; for goods subject to both special consumption tax and environmental protection tax, it is the selling price including both special consumption tax and environmental protection tax but excluding value-added tax;

b) For imported goods, it is the import tax calculation value based on legal regulations on export tax and import tax, plus import tax plus any additional import taxes as per law (if any), plus special consumption tax (if any), and plus environmental protection tax (if any);

c) For goods and services used for exchange, internal consumption, gifting, and donations, the tax calculation price is the VAT price of similar or equivalent goods and services at the time these activities occur.

For promotional goods and services according to commercial regulations, the tax calculation is determined as zero (0)

d) For leasing activities, it is the rent amount excluding value-added tax.

In cases of rental with periodic payment or advance payment for the rental period, the tax calculation is the periodic payment or advance rent amount excluding value-added tax;

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Thus, from July 1, 2025, the taxable prices price for promotional goods and services is determined as 0.

From July 1, 2025, how to determine taxable prices for promotional goods and services in Vietnam? (Image from the Internet)

Are invoices required for promotional goods and services in Vietnam?

According to Article 4 of Decree 123/2020/ND-CP which regulates the principles of creating, managing, and using invoices and documents as follows:

Principles of Creating, Managing, and Using Invoices and Documents

1. When selling goods or providing services, the seller must create an invoice to deliver to the buyer (including cases of promotional goods and services, advertising, samples; goods and services used for giving, gifting, donations, exchanges, or employee salary compensation and internal consumption (except for internal goods circulation to continue the production process); issuing goods under lending, borrowing, or return forms) and must fully record the contents in accordance with Article 10 of this Decree. If using electronic invoices, it must follow the data format standards of the tax authority as stipulated in Article 12 of this Decree.

2. When withholding personal income tax, collecting taxes, fees, charges, the organization withholding tax, the organization collecting fees, charges, taxes must create tax withholding, tax, fee, charge receipts and deliver them to the income-earning individual subject to tax withholding, tax, fee, charge payer and must fully record the contents in accordance with Article 32 of this Decree. In cases of using electronic receipts, it must adhere to the data format standards of the tax authority. In cases where an individual authorizes tax finalization, a personal income tax withholding certificate will not be issued.

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Accordingly, the seller must create an invoice to deliver to the buyer, including cases of promotional goods and services. When providing promotional goods and services, the seller must issue an invoice to send to the buyer as per regulations.

What is the penalty for failing to issue invoices when providing promotional goods and services in Vietnam?

According to clause 2, Article 24 of Decree 125/2020/ND-CP which regulates penalties for violations regarding invoice issuance when selling goods and services as follows:

Penalties for Violations regarding Invoice Issuance when Selling Goods and Services

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2. A fine from 500,000 VND to 1,500,000 VND for any of the following acts:

a) Not issuing a summary invoice according to legal regulations on selling goods and providing services.

b) Not issuing an invoice for promotional goods and services, advertising, samples; goods and services used for giving, gifting, donations, exchanges, or employee salary compensation, except for circulating internal goods for continued production or internal consumption.

3. A fine from 3,000,000 VND to 5,000,000 VND for issuing an invoice at the wrong time that does not delay tax obligations, except for cases specified in point a, clause 1 of this Article.

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Thus, failure to issue invoices when providing promotional goods and services will result in a fine ranging from 500,000 to 1,500,000 VND depending on the severity of the violation.

Note: The aforementioned fine applies to administrative violations committed by organizations. For the same administrative violation regarding tax and invoices, the fine imposed on organizations is twice the fine imposed on individuals.