Is proof of cashless payment a condition for input value-added tax credit in Vietnam?

Is proof of cashless payment a condition for input value-added tax credit in Vietnam?

Pursuant to Clause 2, Article 12 of the Law on Value Added Tax 2008, as amended by Clause 6, Article 1 of the Law on Amendments to Law on Value Added Tax 2013, the conditions for the deduction of input value-added tax are stipulated as follows:

Deduction of Input Value Added Tax

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2. The conditions for the deduction of input value-added tax are stipulated as follows:

a) Having a value-added tax invoice for the purchase of goods and services or a record proving the payment of value-added tax at the importation stage;

b) Having a cashless payment record for the purchased goods and services, except for goods and services purchased in individual transactions valued at less than twenty million dong;

c) For exported goods and services, in addition to the conditions stipulated at points a and b of this clause, the following must also be available: a contract signed with a foreign party for the sale, processing of goods, provision of services; an invoice for the sale of goods and services; a cashless payment record; a customs declaration for exported goods.

Payment for exported goods and services in the form of offsetting between exported goods and services and imported goods and services or state debt repayment is considered as cashless payment.

Thus, according to the above regulations, a cashless payment record for purchased goods and services is considered a condition for the deduction of input value-added tax.

Note: proof of cashless payment are required for goods and services, except for those purchased in individual transactions valued at less than twenty million dong.

Is proof of cashless payment a condition for input value-added tax credit in Vietnam? (Image from Internet)

Vietnam: What contents does the certificate of VAT deduction include?

According to Clause 1, Article 32 of Decree 123/2020/ND-CP, the specific content of the record is stipulated as follows:

- Name of the tax deduction record, sample code of the tax deduction record, code of the tax deduction record, and serial number of the tax deduction record;

- Name, address, and tax code of the payer;

- Name, address, and tax code of the taxpayer (if the taxpayer has a tax code);

- Nationality (if the taxpayer is not of Vietnamese nationality);

- Income amount, time of income payment, total taxable income, deducted tax amount; remaining receivable income;

- Date, month, year of preparing the tax deduction record;

- Full name and signature of the income payer.

Note: In the case of using electronic tax deduction records, the signature on the electronic record is a digital signature.

Vietnam: What contents does the receipt considered as certificate of tax deduction include?

Pursuant to Clause 2, Article 32 of Decree 123/2020/ND-CP, the specific type of receipt is stipulated as follows:

[1] Name of Receipt Type:

Receipts for taxes, fees, and charges not pre-printed with a value; receipts for taxes, fees, and charges pre-printed with a value; receipts for taxes, fees, and charges.

[2] Code of Receipt Sample and Receipt Code.

- The code of the receipt sample includes information showing the name of the receipt type, the number of receipt copies, and the serial number of a sample within a receipt type (a receipt type may have multiple samples).

- The receipt code is a distinguishing mark of the receipt using a system of Vietnamese alphabets and the last two digits of the year.

- For printed receipts, the last two digits of the year indicate the year the receipt was printed. For self-printed and electronic receipts, the last two digits of the year mark the year the receipt usage commenced as stated in the issue notice or the year the receipt was printed.

[3] Receipt Number

This is the serial number indicated on tax, fee, and charge receipts. The receipt number is represented using Arabic numerals up to a maximum of 7 digits. For self-printed and order-printed receipts, the receipt numbering starts from 0000001. For electronic receipts, the electronic receipt numbering starts from 1 on January 1 or the commencement date of using electronic receipts and ends on December 31 each year.

[4] Copies of the Receipt (applicable to order-printed and self-printed receipts)

This is the number of sheets in the same receipt number. Each receipt number must have at least 02 copies or more, of which:

- Copy (part) 1: retained by the collecting organization;

- Copy (part) 2: delivered to the payer of taxes, fees, charges;

Note:

Copies from the third onwards are named according to their specific use for management purposes as prescribed by the law.

[5] Name and tax code of the organization collecting taxes, fees, charges.

[6] Name of the types of taxes, fees, charges collected and the amount written in numbers and letters.

[7] Date, month, year of preparing the receipt.

[8] Signature of the money collector. In the case of using electronic receipts, the signature on the electronic receipt is a digital signature.

[9] Name and tax code of the organization printing the receipt (in case of order printing).

[10] Receipts are presented in Vietnamese.

- In cases where it is necessary to additionally record in a foreign language, the additional recording in the foreign language is placed on the right within parentheses “( )” or directly below the line content written in Vietnamese with a smaller font size than the Vietnamese text.

- Numbers written on receipts are natural numbers 0, 1, 2, 3, 4, 5, 6, 7, 8, 9.

Important Notes:

- The currency recorded on receipts is Vietnamese dong. In cases where other collections into the state budget are specified by law in a foreign currency, it is permissible to collect in that foreign currency or in Vietnamese dong based on the conversion from the foreign currency to Vietnamese dong at the exchange rate stipulated in Clause 4, Article 3 of Decree 120/2016/ND-CP.

- In cases where the list of fees and charges requires more lines than a receipt allows, a supplementary schedule can be prepared along with the receipt. The schedule should be designed by the fee and charge collecting organization to suit the characteristics of each type of fee and charge. The schedule must clearly state “attached to receipt number... dated... month... year”.

- For fee and charge collecting organizations using electronic receipts, if there is a need to adjust certain content criteria on the electronic receipt to match reality, the collecting organization may exchange correspondence with the Ministry of Finance (General Department of Taxation) for consideration and guidance prior to implementation.

- Besides the mandatory information as prescribed in this clause, fee, and charge collecting organizations may add additional information, including creating logos, decorative images, or advertisements appropriate to the legal regulations and not obscuring or making the mandatory content on the receipt unclear. The font size of the additional information should not be larger than the font size of the mandatory content on the receipt.