VAT Tax Deduction: Bank Transfer for Purchases Over 5M VND

(updated Decree 181/2025/ND-CP)

From July 1, 2025, according to Decree 181/2025/ND-CP, enterprises purchasing goods/services worth 5 million VND or more must pay by bank transfer to be eligible for VAT deduction. This regulation promotes non-cash payments, increases transparency, and requires enterprises to adjust accounting processes to comply. This ensures effective tax management and minimizes errors. Through the article below, Viet An Law will delve into the analysis of VAT tax deduction: bank transfer for purchases over 5M VND from July 1, 2025.

VAT tax deduction: bank transfer for purchases over 5M VND (update Decree 181/2025/ND-CP)

Pursuant to Article 26 of Decree 181/2025/ND-CP, business establishments must have non-cash payment documents for purchased goods and services (including imported goods) of 5 million VND or more, including value-added tax. Of which:

Non-cash payment documents are bank payment documents proving the transfer of money from the buyer’s account to the seller’s account opened at payment service providers according to payment methods under current legal regulations, as prescribed in Decree No. 52/2024/ND-CP, including:

• Cheques, payment orders, payment authorizations, collection orders, collection authorizations,
• Bank cards (including: debit cards, credit cards, prepaid cards),
• E-wallets, and other payment instruments according to the regulations of SBV (including the case where the buyer pays from the buyer’s account to the seller’s account in the name of the private business owner or the buyer pays from the buyer’s account in the name of the private business owner to the seller’s account).

VAT deduction regulations

Pursuant to Clause 2 and Clause 3, Article 26 of Decree 181/2025/ND-CP, non-cash payment documents are prescribed for VAT deduction as follows:

• Some special cases as prescribed in Point b, Clause 2, Article 14:
  • In case of goods and services purchased by the offsetting method;
  • In case of goods and services purchased by the debt offsetting method;
  • In case of goods and services purchased by authorization payment through a third party that makes non-cash payments;
  • In case of goods and services purchased by the method of payment for goods and services by stocks or bonds;
  • In case of following the payment methods specified in Article 26 of Decree 181/2025/ND-CP;
  • In case purchased goods and services are paid for non-cash into a third-party account opened at the State Treasury for enforcement;
  • For goods and services purchased on deferred payment or installment payment with a value of 5 million VND or more, business establishments shall base on written contracts for purchasing goods and services, value-added invoices, and non-cash payment documents for goods and services purchased on deferred payment or installment payment to deduct input value-added tax;
  • In case the value of imported goods and services each time is less than 5 million VND, goods and services purchased each time according to invoices are less than 5 million VND at prices including value added tax, and in case the business establishment imports goods that are gifts, presents, and samples without payment from organizations and individuals abroad, there is no need for non-cash payment documents for purchased goods and services;
  • In case goods and services purchased to serve the production and business activities of goods and services subject to value added tax are authorized to individuals who are employees of the business establishment
• In case a taxpayer purchases goods or services with a value of less than 5 million VND but purchases multiple times on the same day with a total value of 5 million VND or more, tax deduction is only allowed in cases where there is a non-cash payment document.

Why does Decree 181/2025/ND-CP stipulate that invoices over 5 million must be transferred?

Pursuant to Government Submission No. 50/TTr-BTC dated March 26, 2024 on the draft Law on VAT (amended), the Ministry of Finance has submitted to the Government to amend the regulation on not having to have non-cash payment documents for goods and services purchased each time with a value of less than 20 million VND to the level of less than 5 million VND for the condition of deducting input VAT to continue implementing Decision No. 1813/QDTTg dated October 28, 2021 of the Prime Minister approving the Project on developing non-cash payments in Vietnam for the period 2021-2025 and contributing to the transparency of business transactions (content specified in Point b, Clause 2, Article 13 of the draft Law).

Are invoices over 5 million required to be transferred to be deducted from VAT?

Pursuant to Decree 181/2025/ND-CP, from July 1, 2025, when purchasing goods and services worth 5 million VND or more (including VAT), businesses are required to have non-cash payment documents as prescribed in Decree 52/2024/ND-CP to be eligible for input VAT deduction. If paid in cash, it will not be eligible for tax deduction.

Therefore, enterprises can perform this obligation to get a tax deduction or not perform it.

How is the VAT deduction method regulated?

Under Article 11 of the Law on Value Added Tax 2024, the tax deduction method is prescribed as follows:

Credit-invoice method is prescribed as follows:

• VAT payable equals (=) output VAT minus (-) deductible input VAT;
• Output VAT is the amount of VAT on sold goods and services written on the VAT invoices.
• VAT on sold goods and services written on the VAT invoice equals (=) the taxable prices of the goods and services multiplied by (x) VAT rate on such goods and services.
• If the amount payable written on the invoice is inclusive of VAT, the output VAT shall equal (=) the amount payable minus (-) taxable price determined according to Point k Clause 1 Article 7 of Law on Value Added Tax 2024;
• Deductible input VAT equals (=) the total VAT written on the invoice for purchase of goods and services or document on payment of VAT on imports or VAT payment document in case of purchase of services specified in Clause 3 and Clause 4 Article 4 of this Law and must satisfy the requirements specified in Article 14 of Law on Value Added Tax 2024.

The tax deduction method applies to business establishments that fully implement the accounting, invoice, and voucher regimes according to the provisions of the law on accounting, invoices, and vouchers, including:

• Business establishments with annual revenue from selling goods and providing services of 1 billion VND or more, except for households and individuals engaged in production and business;
• Business establishments voluntarily apply the tax deduction method, except for households and individuals engaged in production and business;
• Foreign organizations and individuals providing goods and services to conduct oil and gas exploration, development, and exploitation activities pay tax according to the tax deduction method declared, deducted, and paid by the Vietnamese party on their behalf.

Above is the legal advice of Viet An Law on VAT tax deduction: bank transfer for purchases over 5M VND from July 1, 2025 (updated Decree 181/2025/ND-CP). If you have any other questions related to VAT deduction, please contact Viet An Law for specific advice.