New Regulations on Non-Cash Payments Under the 2024 VAT Law

New Regulations on Non-Cash Payments Under the 2024 VAT Law

New Regulations on Non-Cash Payments Under the 2024 VAT Law

Posted on: 18/02/2025

With significant changes in the 2024 VAT Law, businesses must comply with the new regulations regarding non-cash payments to be eligible for input VAT deductions. These regulations will take effect from July 1, 2025, and companies need to understand the requirements to ensure compliance. Below is detailed information on the non-cash payment regulations under the 2024 VAT Law.

1. Conditions for Input VAT Deductions

To qualify for input VAT deductions, businesses must meet the following conditions:

  • Valid VAT invoices: The invoices must be issued in compliance with legal regulations, containing all necessary information about the buyer, seller, goods, services, value, and VAT.

  • Non-cash payment documents: All purchases of goods or services must have non-cash payment documents. Regardless of the transaction value, even transactions below 20 million VND must be supported by non-cash payment proof.

2. Non-Cash Payment Methods

To comply with the non-cash payment requirement, businesses can use the following methods:

  • Bank transfers: Businesses can use bank transfer services to pay for goods and services. Proof of transfer must be kept properly.

  • Bank cards: Payments can be made through credit cards or debit cards. Both credit and debit cards are acceptable for non-cash payments.

  • E-wallets: E-wallet applications such as MoMo, ZaloPay, PayPal, etc., are valid non-cash payment methods.

  • Online payment services: Online payment platforms, including those from other service organizations, are recognized as valid non-cash payment methods.

3. Some Exceptions

Although the regulations require non-cash payment documents for all transactions, there are some exceptional cases where this may not be required, according to government regulations. These exceptions will be detailed in the government’s guidance documents.

4. Non-Cash Payment Process

Businesses should follow these steps to ensure compliance with the non-cash payment regulations:

  • Step 1: Open a bank account: Businesses need to open an account with commercial banks or credit institutions authorized to operate in Vietnam to conduct non-cash transactions.

  • Step 2: Sign a contract with the supplier: Before making a transaction, businesses must sign a contract with the supplier of goods or services, clearly specifying the non-cash payment method.

  • Step 3: Make the payment: Payments can be made using methods such as bank transfers, bank cards, or e-wallets. After the payment, businesses should retain payment documents such as transfer receipts, bank statements, or electronic invoices.

  • Step 4: Store payment documents: All non-cash payment documents must be stored for at least 5 years in accordance with legal requirements to be available for tax authorities’ audits.

5. Document System

Businesses must maintain a complete document system for non-cash payments to prove their tax obligations and for tax authority audits. The storage of these documents must comply with legal regulations.

6. Penalties for Non-Compliance

If businesses do not comply with non-cash payment regulations, they may face administrative penalties, tax reassessment, and will not be allowed to deduct input VAT. Therefore, compliance with non-cash payment regulations is crucial for businesses.

7. Effective Date

The 2024 VAT Law will take effect on July 1, 2025, and businesses need to proactively implement necessary measures before this date to avoid legal risks when the new regulations come into force.

8. Key Notes

  • Businesses must stay updated on and comply with the regulations on non-cash payments to ensure legal compliance.

  • It is critical to update information about tax policies and non-cash payments to avoid legal risks and optimize tax obligations.

Legal Basis:

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