Regulations on issuing invoices over 20 million VND

Value-added invoices (VAT) are an important part of business operations, helping businesses comply with tax regulations and manage their finances effectively. This type of invoice is used to record information about the sale of goods or provision of services, and at the same time show the amount of VAT payable to the state budget. This type of invoice is applied to business organizations and individuals that are declaring VAT by the deduction method. The characteristic of a VAT invoice is that it has a characteristic red color (often called a red invoice) to help distinguish it from other types of invoices. Invoices must be made in accordance with the regulations of the Ministry of Finance. According to Circular No. 219/2013/TT-BTC, when invoices valued at VND 20 million or more have non-cash payment vouchers, input VAT will be deducted. Therefore, Viet An Tax Agent will provide you with specific regulations on issuing invoices over 20 million VND.

Regulations on payment for invoices over VND 20 million

Pursuant to Clause 1, Article 1, Circular 26/2015/TT-BTC amending and supplementing Article 15 of Circular 219/2013/TT-BTC, the Ministry of Finance has regulations on the case of input invoices of VND 20 million

Specifically, enterprises are only allowed to deduct input VAT when invoices valued at 20 million VND or more have non-cash payment documents, that is, they must be transferred via bank. This regulation does not apply to the value of goods and services imported each time with a value of less than VND 20 million; goods and services purchased each time according to invoices of less than VND 20 million at VAT-inclusive prices and in case the purchase invoices for goods are gifts or gifts of overseas organizations or individuals

On the other hand, according to Clause 1, Article 6, Circular 78/2014/TT-BTC, in the section guiding the deduction of expenses for enterprises, the Ministry of Finance has regulations on expenses if there is an invoice for the purchase of goods and services each time of over 20 million VND (including VAT). Based on the above regulations, for invoices valued at over VND 20 million, the buyer must make a bank transfer payment

Bills over 20 million VND must be transferred

Pursuant to Article 4, Circular 96/2015/TT-BTC guiding amendments and supplements to Article 6, Circular 78/2014/TT-BTC:

“Article 6. Deductible and non-deductible expenses when determining taxable income

Except for the non-deductible expenses mentioned in Clause 2 of this Article, the enterprise may deduct all expenses if it fully satisfies the following conditions:

a) Actual expenses incurred related to the production and business activities of the enterprise

b) Expenses with sufficient lawful invoices and documents as prescribed by law

c) Expenses for the purchase of goods and services each time with a value of VND 20 million or more (VAT included) must be accompanied by non-cash payment vouchers when making payment

Non-cash payment vouchers shall comply with the provisions of legal documents on value-added tax”

Thus, according to Circular 78/2014/TT-BTC, the Ministry of Finance stipulates that if there is an invoice for the purchase and sale of goods and services each time of over VND 20 million or more, in order to be deducted VAT and included in reasonable expenses, the buyer must be obliged to make payment via bank transfer to the seller.

In case of purchasing goods or services each time with a value of twenty million VND or more inscribed on the invoice but the enterprise has not yet paid the expenses by the time of recording the expenses, the enterprise shall be included in the deductible expenses when determining taxable income.

In case the enterprise does not have payment vouchers and decides not to use cash, the enterprise shall declare and adjust the reduction of expenses for the value of goods and services without non-cash payment vouchers in the tax period in which the payment is made in cash (including the case where the tax authority and the functional agency have determined the payment check and examine the tax period in which this expense is incurred)

Invoices on the same day with a total value of over 20 million VND

In case many invoices are issued on the same day, the value of each invoice is less than 20 million VND, but the total value of these invoices is greater than 20 million VND. To be able to answer this problem, business units need to base on relevant current legal regulations.

In Article 15, Circular No. 219/2013/TT-BTC, the Ministry of Finance has stipulated: For cases of purchasing goods and services many times on the same day, although the value of each invoice is less than 20 million VND, if the total value of the invoices is greater than 20 million VND, the buyer is only entitled to apply tax deduction when there are payment vouchers at the bank row. That is, the buyer who wants to be deducted is not paid in cash. In this case, the main supplier is the taxpayer with the tax identification number, directly declaring and paying tax.

In Clause 1, Article 14, Circular No. 96/2015/TT-BTC, the Ministry of Finance stipulates:

• Expenses with invoices for the purchase of goods and services valued at VND 20 million or more each time must have non-cash payment vouchers to enjoy deduction;
• For cases of purchasing goods and services each time with a value of VND 20 million or more stated on the invoice but by the time of recording the expenses, the enterprise has not yet paid, the enterprise shall be included in the deductible expenses when determining taxable income. In case the enterprise does not have non-cash payment vouchers when making payment, the enterprise must declare and adjust the reduction of expenses for the value of goods and services without non-cash payment vouchers in the tax period in which the cash payment arises (even in cases where the tax authority and functional agencies already have decisions on inspection and examination of the tax period incurring this expense)
• In case the enterprise purchases goods and services related to its production and business activities and has invoices printed directly from the cash register in accordance with the law on invoices; If this invoice is valued at VND 20 million or more, the enterprise shall base itself on this invoice and the enterprise’s non-cash payment voucher to calculate the deductible expenses when determining taxable income.
• In case the enterprise purchases goods or services related to its production and business activities and has invoices printed directly from cash registers in accordance with the law on invoices; If this invoice is valued at less than VND 20 million and is paid in cash, the enterprise shall base itself on this invoice and the enterprise’s cash payment voucher to include in the deductible expenses when determining taxable income

Thus, based on the above regulations, business units, when purchasing goods and services from a supplier, if there are many input invoices issued on the same day, the value of each invoice is lower than 20 million VND, but the total value of the invoices reaches over 20 million VND, they are forced to apply payment via bank to enjoy it tax deduction.

In case the bill is over 20 million, it can be paid in cash

In principle, for invoices for the purchase of goods and services, it is mandatory to have non-cash payment documents. However, according to Article 9 of Decree 218/2013/ND-CP, there are still a number of cases of purchasing goods and services worth over VND 20 million that are not required to be paid non-cash, including the following expenses:

How to handle invoices over VND 20 million without transfer?

Enterprises will have 3 handling options for cases where the buyer has made cash payment for invoices valued at over VND 20 million:

If you have any difficulties or questions related to the regulations on issuing invoices over VND 20 million, please contact Viet An Tax Agent for the most specific advice.