Increasing the responsibility of controlling cash flow in enterprises
From July 1, 2025, the Law on Value Added Tax 2024 (Law No. 48/2024/QH15) officially took effect, stipulating that all expenses for purchasing goods and services - regardless of large or small value - to be deducted from input VAT must have non-cash payment documents, except in special cases prescribed by the Government.
This content is stipulated in Point b, Clause 2, Article 14 of the Law, with the goal of increasing transparency in buying and selling activities, limiting the use of cash in commercial transactions and preventing tax fraud.
Cashless payment methods include: bank transfer, payment via e-wallet, bank card, or other electronic payment methods recognized by law. Enterprises and business households need to fully store payment documents and invoices to ensure deduction conditions when settling taxes.
According to Ms. Le Yen - Director of Hanoi Tax Consulting Company Limited (Hanoitax): "The new regulation tightens deduction conditions, puts greater responsibility on businesses in controlling payments, and raises the requirement for controlling cash flow within businesses. Just one wrong transaction, no transfer documents, the entire input tax of that bill will be deducted from the reasonable cost".
If the transaction does not meet payment conditions, the enterprise will not only lose the right to deduct VAT but also have that cost excluded from the corporate income taxable income.
According to Ms. Le Yen, businesses need to review the entire accounting, procurement and payment process, especially for small but frequently arising loans. Payment via e-wallet, internal application, multi- installment payment or subdivision of invoices also need to be fully recorded and documents must be stored in accordance with regulations to avoid risks when settling taxes.
For example, businesses often buy stationery, printing services or customer service with a value of only a few hundred thousand VND/time. If there is no bank transfer or electronic payment document, that payment can be deducted from the deduction cost, even if there is a valid invoice, Ms. Yen cited. For transactions with multiple payments, if the invoice and transfer are not matched, it will easily be rejected by the tax authority.
Ms. Yen believes that the accounting department needs to change their thinking and working process, from the stage of requiring payment, making a transfer request to electronic document storage. This is a big but necessary pressure, helping businesses standardize records and minimize risks when being tax-inspected, she said.
What should businesses do to ensure tax deduction conditions?
Ms. Le Yen recommends that, while waiting for specific instructions from the tax authority, businesses should apply the form of transfer for all transactions arising from July 1 to avoid the risk of having their costs eliminated when settling taxes.
This is a sensitive time. If they wait for the document without proactively converting, businesses can easily fall into a passive position. In particular, small transactions are often easily overlooked, while the risk of cost elimination and loss of tax deduction is not small, Ms. Yen warned.
To ensure compliance with regulations and remaining flexible in operations, Ms. Le Yen proposed two payment processing options applied by many businesses:
Option 1: Enterprises can open a Visa Debit or Credit card from a company account, set a limit and assign the right to use it to authorized individuals (Director, accountant, department head...). This both ensures cash flow control and meets the conditions for non-cash payment.
Option 2: In case the employee has to advance work or shopping expenses, the enterprise can prepare a document authorizing the individual to pay in advance through personal accounts via bank transfer. After that, the company will refund by transferring money from the business account, along with a cost statement and full valid invoices and documents.
We have received a lot of questions from customers over the past week. At this stage, businesses need to pay special attention to payment documents and accompanying invoices. Cash payments even with valid invoices still risk being excluded from tax costs, Ms. Yen noted.
