What is a trade discount? What is the VAT taxable price for goods with trade discounts in Vietnam in 2025?

What is a trade discount?

Based on the regulations stipulated in Standard No. 14 - Revenue and Other Income issued and announced according to Decision 149/2001/QD-BTC, a trade discount is a reduction in the listed price for customers purchasing in large quantities provided by the selling enterprise.

What are contents of invoice for goods with trade discounts in Vietnam?

Based on the regulation at point dd clause 6 Article 10 of Decree 123/2020/ND-CP regarding the content of an invoice as follows:

Contents of the invoice

...

6. Name, unit of measurement, quantity, unit price of goods, services; total amount excluding value-added tax, value-added tax rate, total value-added tax by tax rate type, total value-added tax, total payment amount including value-added tax.

...

dd) In the case where a business entity applies the form of trade discount for customers or promotion according to legal regulations, the trade discount, promotion must be clearly stated on the invoice. The determination of value-added tax calculation (total amount excluding value-added tax) in cases where trade discount is applied for customers or promotions are carried out according to the provisions of the value-added tax law.

...

When a business entity applies a form of trade discount for a customer, it must clearly state the trade discount on the invoice.

What is the VAT taxable price for goods with trade discounts in Vietnam in 2025? (Image from the Internet)

What is the latest VAT taxable price for goods with trade discounts in Vietnam in 2025?

Based on the guidance in Official Dispatch 3292/TCT-CS of 2023 regarding invoices calculating VAT in cases where a business entity applies trade discounts for customers as follows:

Based on clause 22 Article 7 Circular No. 219/2013/TT-BTC dated December 31, 2013, by the Ministry of Finance guiding the implementation of the Law on Value-Added Tax and Decree No. 209/2013/ND-CP dated December 18, 2013, of the Government of Vietnam providing detailed provisions and guidance on certain articles of the Law on Value-Added Tax regarding taxable prices;

Based on point đ clause 6 Article 10 of Decree No. 123/2020/ND-CP dated October 19, 2020, of the Government of Vietnam on invoices and documents regulating the application of trade discount forms;

Based on point e, clause 1 Article 7 Circular No. 78/2021/TT-BTC dated September 17, 2021, by the Ministry of Finance guiding the execution of certain articles of the Law on Tax Administration dated June 13, 2019, Decree No. 123/2020/ND-CP dated October 19, 2020, of the Government of Vietnam on invoices and documents regulating the handling of electronic invoices, aggregated data tables of electronic invoices sent to tax authorities in certain cases.

According to the above guidance, if a business entity applies a trade discount for customers (if any), the VAT taxable price is the selling price after deducting the trade discount for the customers. If the trade discount is based on the quantity, sales volume of goods, or services, the discounted amount for goods already sold is to be adjusted on the invoice for the final purchase or subsequent period. If the discounted amount is set when concluding the discount program (period), an adjustment invoice should be issued accompanied by a list of invoices to be adjusted, the amount, and the tax adjustment. Based on the adjustment invoice, the seller and buyer declare the adjustment of purchase and sales revenue, output, and input taxes.

Referring to the provision in clause 22 Article 7 Circular 219/2013/TT-BTC:

Taxable price

...

22. The taxable price for various types of goods and services specified from clauses 1 to 21 of this Article includes any additional charges and fees outside of the goods and services price which the business entity benefits from.

In cases where a business entity applies a trade discount for customers (if any), the VAT taxable price is the selling price after deducting the trade discount. If the discount is based on the quantity, sales volume of goods, services, the discounted amount for sold goods will be adjusted on the invoice for the last purchase or subsequent cycle. If the discount amount is issued upon the completion of the discount sales program (cycle), an adjustment invoice with an attachment listing the invoice numbers requiring adjustment, amounts, and tax adjustments should be issued. Based on the adjustment invoice, both sellers and buyers disclose adjusted sales and purchases, output, and input taxes.

The taxable price is determined in Vietnamese Dong. In the case of taxpayers with revenue in foreign currency, it must be converted into Vietnamese Dong at the average exchange rate on the interbank foreign currency market published by the State Bank at the time the revenue arises to determine the taxable price.

In cases where a business entity applies a trade discount form for customers, the VAT taxable price is the selling price after deducting the trade discount for customers.

- If the trade discount is based on the quantity, sales volume of goods, or services, the discounted amount for sold goods is adjusted on the invoice for the final purchase or subsequent cycle.

- If the discounted amount is prepared at the end of the discount program (cycle), an adjustment invoice should be issued accompanied by a table listing the invoices requiring adjustment, amounts, and tax adjustment.

Based on the adjustment invoice, both the seller and the buyer declare the adjustment of purchase and sales revenue, output, and input taxes.