Ms. V.T.H, working at a manufacturing enterprise, reflected on difficulties in implementing regulations related to the conditions for deduction of input value-added tax (VAT) under the Law on VAT in 2024.
According to Ms. H., point b, clause 2, Article 14 of the Law on VAT 2024 (effective from July 1, 2024) clearly states: the condition for deducting input VAT is "to have non-cash payment documents for purchased goods and services, except for some special cases as prescribed by the Government".
At the unit where Ms. H. works, when there is a need to purchase materials, spare parts, and raw materials for production, the company often transfers the advance payment to the employee's personal account. The employee will then transfer the money to the supplier. The payment documents all have a complete VAT invoice with the company's name and tax code, a photo of the content of the transfers from personal accounts to the supplier, and clear regulations in the internal financial management regulations.
From this reality, Ms. H. questioned: is the above payment method considered to meet the conditions of non-cash payment documents, with sufficient basis for declaration, deduction of input VAT and being included in the valid cost when determining corporate income tax (CIT) or not.
Regarding Ms. H.'s question, the 8th Provincial Grassroots Tax Department of Dong Nai province said that after receiving the question via the Ministry of Finance's Electronic Information Portal, it cited the provisions of Article 26 of Decree 181/2025/ND-CP dated July 1, 2025 of the Government on non-cash payment documents.
Specifically, the Decree clearly states: business establishments must have non-cash payment documents for purchased goods and services of VND 5 million or more, including VAT. In which, non-cash payment documents are documents proving non-cash payment according to Decree No. 52/2024/ND-CP, except in cases where the buyer pays cash directly into the seller's account.
Notably, Point i stipulates specific cases, the law allows: goods and services serving production and business subject to VAT authorized to individuals who are employees of enterprises to pay without using cash from personal accounts (or loans from other individuals) according to financial regulations or internal regulations. After that, the enterprise can repay the employees in cash. In this case, payment documents are still accepted to deduct input VAT.
From there, the tax authority affirmed: in comparison with the regulations and through the presentation of Ms. V.T.H, the form of the company transferring the advance payment to the employee's personal account to make payment to the supplier, then refunding in cash with full valid documents, is considered to meet the conditions for deducting input VAT for invoices and documents for the purchase and sale of goods and services arising in the above form.
