Grant Thorton Vietnam’s Tax Flashcard

On 01 July 2025, the Government issued Decree No. 181/2025/ND-CP (“Decree 181”), providing detailed guidance on several provisions of the Law on Value-Added Tax (“VAT”) No. 48/2025/QH15. One of the key concerns for enterprises is whether input VAT remains eligible for deduction when non-cash payment occurs after the contractual payment deadline.

Understanding the regulatory framework and applying it correctly in each specific situation is critical for enterprises to ensure compliance and optimise their VAT deduction entitlements. This article analyses the relevant provisions and summarises the tax authorities’ opinions to help enterprises properly manage late-payment scenarios during VAT declaration.

According to Clause 2, Article 14 of the Law on Value-Added Tax 2024, one of the mandatory conditions for claiming input VAT deduction is the availability of non-cash payment evidence for purchases of goods or services valued from VND 5 million and above (inclusive of VAT), except for special cases stipulated by the Government.

Pursuant to Clause 2, Article 26 of Decree 181, it can be interpreted that where invoices valued at VND 5 million or more are paid late, enterprises may still declare and deduct input VAT at the time of receiving the invoices, based on the contract and VAT invoice, even if payment has not yet been made.

However, the regulations also clearly requires that if, by the contractual payment deadline, the enterprise fails to provide valid non-cash payment evidence, it must declare and adjust to reduce the previously deducted input VAT.

Nevertheless, Decree 181 does not provide detailed guidance on a common practical concern: whether an enterprise may subsequently re-increase or “restore” the previously adjusted input VAT amount once non-cash payment evidence becomes available after the contractual payment deadline.

Regarding this issue, we note that several provincial tax authorities have issued official letters, including Official Letter No. 434/VLO-QLDN2 of Vinh Long Tax Department dated 21 August 2025 and Official Letter No. 3367/TPHCM-QLDN1 of Ho Chi Minh City Tax Department dated 08 October 2025 addressed to Sai Gon Petro Oil Joint Stock Company (PV Oil Sai Gon). These letters generally state that if an enterprise fails to obtain valid non-cash payment evidence for invoices valued at VND 5 million or more by the contractual payment deadline, it must declare and adjust to reduce the previously declared input VAT. Furthermore, the tax authorities confirm that there is no “restoration of deduction rights” even if the non-cash payment is made after the payment deadline. Instead, the input VAT amount that cannot be deducted may be included in deductible expenses for corporate income tax (“CIT”) purposes. This interpretation, however, may create practical challenges for enterprises in managing contractual payment deadlines and VAT adjustment declarations.

During the tax–business dialogue sessions (https://thoibaotaichinhvietnam.vn/thue-tp-ho-chi-minh-giai-dap-nhieu-cau-hoi-cho-doanh-nghiep-tren-dia-ban-186114.html), a representative of the Ho Chi Minh City Tax Department expressed a differing opinion: if, payment evidence is not available at the time of VAT declaration, the enterprise may temporarily exclude the VAT amount and later adjust to deduct it once payment evidence becomes available. A late payment of one to two days may not cause issues if declarations are timely. However, this opinion has not been formalised into any official written guidance.

Key Takeaways for Enterprises

Based on official written guidance currently available, tax authorities appears to take the position enterprises are not permitted to re-declare and increase the input VAT amount previously adjusted downward, even if valid non-cash payment evidence is subsequently obtained after the contractual payment deadline.

In the absence of official guidance supporting a more favourable interpretation for enterprises, and to safeguard VAT deduction rights while ensuring regulatory compliance, enterprises are advised to closely monitor contractual payment deadlines and maintain proper payment documentation to mitigate unnecessary tax risks. Where payment delays are expected, enterprises may proactively negotiate supplementary agreements to extend contractual deadlines to reflect actual payment schedules, or include more flexible payment terms in future contracts. This approach will help ensure compliance with VAT regulations and avoid unnecessary disputes with tax authorities.