Mandatory Bank Transfer for VAT Invoices in Vietnam

Transferring money when receiving value-added tax (VAT) invoices is one of the important changes in tax administration in Vietnam, especially affecting enterprises and individuals engaged in business activities. This regulation aims to increase transparency, prevent tax losses and more closely control transactions of buying and selling goods and services. Non-cash payments, specifically transfers, are gradually becoming a mandatory requirement when receiving VAT invoices. In the article below, Viet An Law will provide customers with general legal advice on the mandatory bank transfer for VAT invoices in Vietnam.

What is the VAT invoice for?

Deduction of input VAT

• When an enterprise purchases goods and services for production and business activities subject to VAT, the VAT amount on the purchase invoice (input tax) will be deducted from the VAT amount payable when the enterprise sells goods and services (output tax).
• This helps enterprises avoid double taxation on the same added value and reduces the tax burden.

VAT refund

• In some cases, if the deductible input VAT is greater than the output VAT in a certain tax period (exporting enterprises, or enterprises in the investment phase with no revenue, etc.), the enterprise can be refunded by the State the excess input VAT paid.
• VAT invoice is a required document to prove the input tax incurred and qualify for tax refund.

Legalize deductible expenses when calculating corporate income tax (CIT)

• VAT invoice (especially invoice that has been paid non-cash if the transaction value is over 20 million VND) is one of the important documents to prove that the enterprise’s expenses are reasonable and valid.
• Only expenses with full legal invoices and documents can be counted as deductible expenses when determining taxable income, helping to reduce the amount of CIT payable.

Used as the basis for accounting records

• VAT invoice is an important original document for accountants to record economic transactions arising related to the purchase and sale of goods and services in the enterprise’s accounting books.
• It helps to track receivables, manage inventory, fixed assets and other financial items accurately.

Evidence of transactions for the purchase and sale of goods and services

• VAT invoice is legal evidence of a transaction of goods and services between parties, clearly identifying information of the seller, buyer, type of goods/services, quantity, unit price, total amount and VAT.
• This is an important document in case of dispute or need to compare transaction information.

Mandatory bank transfer for VAT invoices in Vietnam

Pursuant to Point b, Clause 2, Article 14 of the Law on Value-added Tax 2024, which stipulates the deduction of input value added tax, from July 1, 2025, when the Law on Value-added Tax 2024 takes effect, all purchased goods and services (including goods and services with a value of less than 20 million VND) must have non-cash payment documents, except for some special cases as prescribed by the Government. Thus, it can be seen that the Law has removed the previous provision exempting non-cash payment documents for expenses under 20 million VND. From July 1, 2025, all expenditures — regardless of their amount – must be accompanied by invoices and non-cash payment documents to be eligible for input VAT deduction. In addition, from June 1, 2025, organizations deducting personal income tax must stop using electronic personal income tax documents according to previous regulations and switch to applying electronic personal income tax deduction according to Decree No. 70/2025/ND-CP.

Cases in which the bank transfer requirement applies when obtaining VAT invoices

Subjects to be affected 

This regulation applies to both enterprises and organizations when purchasing goods and services and to individuals and business households in the course of their operations. Payment by bank transfer is not only applied to the purchase of goods and services for normal production and business activities but also includes fixed asset purchases, ensuring that all large-value expenses are clear and transparent.

Transaction value threshold 

The mandatory payment by bank transfer is usually applied to transactions of goods and services with a value of 20 million VND or more (according to current regulations on VAT deduction and refund). This is an important threshold to determine the validity of VAT invoices for tax purposes. If the transaction value is less than 20 million VND, it is still possible to pay in cash and the VAT invoice is still valid for tax deduction/refund purposes.

Purpose of payment transfer

• Deduction of input VAT: For enterprises to be able to deduct input VAT, transactions for purchasing goods and services (especially those worth 20 million VND or more) must have non-cash payment documents, i.e. bank transfers.
• VAT refund: Similar to deductions, VAT refunds also require transactions to be paid by bank transfer to ensure transparency and control by tax authorities.
• Purchase of fixed assets, goods and services for production and business: Large transactions related to production and business activities and fixed asset purchases are also required to be paid by bank transfer if you want to use invoices for tax declaration.

The meaning of the regulation on the mandatory bank transfer for VAT invoices in Vietnam

For the State and tax administration

• Increase transparency of economic transactions: This regulation helps transactions of buying and selling goods and services to be clearly recorded on the banking system, making transactions transparent, easy to check and compare.
• Prevent tax loss, limit invoice fraud: By requiring payment through banks, tax authorities can more closely control transactions, promptly detect and prevent illegal invoice trading and false declarations for tax profit, thereby minimizing loss of state budget revenue.
• Tightly control cash flow and business transactions: All payments of 20 million VND or more must go through the bank to help management agencies grasp the financial flow of businesses and individuals, supporting the analysis and assessment of tax risks.
• Promoting digital transformation and modernizing the tax sector: This regulation encourages businesses and people to use electronic payment methods, contributing to accelerating digital transformation in the financial and tax sectors, towards a complete digital economy.

For enterprises and people

• Promote cashless payments, in line with development trends: Making money transfers mandatory will encourage transaction parties to become familiar with and regularly use electronic payment methods, in line with the general development trend of the modern economy.
• Ensuring the validity of invoices for tax deduction/refund purposes: For enterprises, compliance with this regulation helps their input VAT invoices to be considered valid, eligible for tax deduction or refund according to law, avoiding the risk of having expenses eliminated when settling taxes.
• Helps enterprises manage cash flow and costs more effectively: Transactions through banks provide clear documents and statements, helping enterprises easily track and compare revenues and expenditures, and manage finances more scientifically and strictly.
• Contribute to building a healthy and fair business environment: This regulation creates a fairer playing field for businesses, minimizing unfair competition from entities that commit tax fraud.

Above is an analysis of the mandatory bank transfer for VAT invoices in Vietnam. If you have any related questions or need advice on legal regulations, please contact Viet An Law for the best support!