VAT deduction regulations promote cashless payments
One of the important changes from July 1, 2025 is the condition of deducting input value-added tax (VAT) for purchased goods and services that is expanded to apply to all invoice values.
According to Clause 2, Article 14 of the Law on VAT 2024 (Law No. 48/2024/QH15), businesses are only allowed to deduct input VAT when they have legal invoices and payment documents that do not use cash, regardless of payment value. In case of cash payment, even with valid invoices, it is not eligible for tax deduction, except in special cases prescribed by the Government.
Compared to the previous regulation, the new point is that the requirement for cashless payment is no longer limited to invoices from 20 million VND or more, but applies to all purchases. The expansion of this scope aims to increase transparency in tax management and cash flow control, in line with the orientation of promoting digital transformation in the finance - accounting sector.
This regulation aims to increase transparency, combat tax refund fraud, and encourage cashless payments, in line with the digital transformation orientation in the tax sector, said Ms. Le Yen - CEO of Hanoi Tax Consulting Company Limited (Hanoitax).
Ms. Le Yen also said: "The new regulation strengthens the conditions for deduction, puts greater responsibility on businesses in controlling payments, and raises the requirement for controlling cash flow within businesses".
E-commerce platforms deduct and pay taxes on behalf
For business activities on e-commerce platforms, from July 1, 2025, tax deduction and payment on behalf of business households and individuals will be implemented according to the provisions of Decree 117/2025/ND-CP and Law No. 56/2024/QH15 amending and supplementing a number of articles of the Law on Tax Administration 2019.
According to Mr. Nguyen Quang Huy - Director of the Finance - Banking program, Nguyen Trai University, the new regulation will create equality between traditional and online business activities, while improving tax compliance in the digital economic sector.
Synchronizing information through personal identification and electronic accounts
From July 1, 2025, the personal identification number on the citizen identification card will be officially used instead of the tax code for all individuals residing in Vietnam, including business households, business individuals, salaried workers, dependents, etc.
Mr. Mai Son - Deputy Director of the Tax Department (Ministry of Finance) - emphasized: "A person only has one tax code, which is personal identification number. Applying identification numbers instead of tax codes not only facilitates people, but is also a breakthrough to help the Tax sector effectively connect with the national population database.
According to Mr. Son, taxpayers will not need to remember many different codes as before. Instead, it is only necessary to use personal identification numbers throughout the entire process of declaration, lookup and tax obligations. This approach helps reduce errors, while completing the tax database, serving the goal of digital transformation.
Regarding the current tax code data, Mr. Nguyen Duc Huy - Deputy Head of the Professional Affairs Department, Tax Department - said: the tax sector is currently managing about 81 million personal tax codes, of which about 65 million have been authenticated and standardized with citizen identification data. The remaining numbers, mainly the dependent's numbers, cannot be authenticated due to inconsistent information.
