Vietnam: What do supplementary documents for input VAT credit include from July 1, 2025?

Vietnam: What do supplementary documents for input VAT credit include from July 1, 2025?

Based on Clause 2, Article 14 of the Law on Value Added Tax 2024 stipulating

Input VAT credit

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Conditions for input VAT credit are specified as follows:

a) There must be a VAT invoice for purchased goods and services or a document for paying VAT at the importation stage or a document for paying VAT on behalf of foreign entities as stipulated in Clauses 3 and 4, Article 4 of this Law. The Minister of Finance stipulates the documents for paying VAT on behalf of foreign entities;

b) There must be non-cash payment documents for purchased goods and services, except for some specific cases as regulated by the Government of Vietnam;

c) For exported goods and services, in addition to the conditions stipulated at Points a and b of this clause, the following are also required: a signed contract with a foreign entity for selling, processing goods, or providing services; sales or service provision invoices; non-cash payment documents; customs declarations for exported goods; packing slips, bills of lading, and insurance documents for goods (if any). The Government of Vietnam specifies the deduction conditions for cases of exporting goods through foreign e-commerce platforms and some other specific cases.

3. Business entities not meeting the deduction conditions stated in Clauses 1 and 2 of this Article and invoices, documents made from prohibited acts under this Law, are not entitled to deduct VAT.

4. The Government of Vietnam provides detailed regulations on this Article.

And based on Clause 2, Article 12 of the Law on Value Added Tax 2008 as amended by Clause 6, Article 1 of the Amended Law on Value Added Tax 2013 stipulating:

Input VAT credit

...

Conditions for input VAT credit are specified as follows:

a) There must be a VAT invoice for purchased goods and services or a document for paying VAT at the importation stage;

b) There must be non-cash payment documents for purchased goods and services, except for goods and services purchased each time with a value of 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 are also required: a signed contract with a foreign entity for selling, processing goods, or providing services; sales or service provision invoices; non-cash payment documents; customs declarations for exported goods.

Payment for exported goods and services in the form of offset payment between exported goods, services, and imported goods, services, replacement debt payment for the State is considered non-cash payment.

Thus, based on the regulations mentioned above, the additional documents for input VAT credit from July 1, 2025, will be packing slips, bills of lading, and insurance documents for goods (if any) for export goods and services that can be used for input VAT credit.

Vietnam: What do supplementary documents for input VAT credit include from July 1, 2025? (Image from the Internet)

What are regulations on VAT credit method in Vietnam from July 1, 2025?

Based on Clause 1, Article 11 of the Law on Value Added Tax 2024 regulating the VAT credit method from July 1, 2025, as follows:

- The payable VAT amount according to the deduction method is the output VAT minus the deductible input VAT;

- The output VAT amount is the total VAT of goods and services sold as recorded on VAT invoices.

The VAT of goods and services sold as recorded on VAT invoices is the taxable price of goods and services subjected to sales tax multiplied by the VAT rate of those goods and services.

If invoices are used showing the payment price inclusive of VAT, the output VAT is determined by the payment price minus the VAT calculation price determined in accordance with point k, Clause 1, Article 7 of the Law on Value Added Tax 2024

- The deductible input VAT is the total VAT recorded on VAT purchase invoices, tax payment documents of imported goods, or tax payment documents for cases of purchasing services as stipulated in Clauses 3 and 4, Article 4 of the Law on Value Added Tax 2024 and meeting the conditions prescribed in Article 14 of the Law on Value Added Tax 2024

What are prohibited acts in VAT credit in Vietnam?

Based on Article 13 of the Law on Value Added Tax 2024 regulating prohibited acts in VAT credit as follows:

- Buying, giving, selling, organizing advertising, brokering the purchase, sale of invoices.

- Creating fake transactions for buying, selling goods, providing services, or transactions that are not in conformity with the law.

- Issuing invoices for selling goods, providing services during the period of business suspension, except for issuing invoices to customers for executing contracts signed before the business suspension notice date.

- Using unlawful invoices, documents, or illegally using invoices, documents as stipulated by the Government of Vietnam.

- Failing to transmit electronic invoice data to the tax authority as required.

- Tampering with, misusing, unlawful access, or destroying the information system regarding invoices and documents.

- Offering, receiving, or brokering bribes or performing other actions related to invoices and documents to obtain tax deductions, refunds, tax embezzlement, or evasion.

- Colluding, covering up; colluding between tax officials, tax authorities, business entities, importers, and between business entities, importers in the use of unlawful invoices, documents for obtaining tax deductions, refunds, tax embezzlement, or evasion.