Grant Thorton Vietnam’s Tax Flashcard

The Government issued Decree No. 181/2025/ND-CP (“Decree 181”) on 01 July 2025, providing detailed guidance on several articles of the Law on Value-Added Tax (“VAT”) No. 48/2025/QH15. One of the key concerns for enterprises when applying these regulations is whether input VAT remains eligible for deduction in cases where the non-cash payment is made after the payment deadline stipulated in the contract.

Understanding the regulatory framework and the correct application in each specific situation is essential for enterprises to ensure tax compliance and optimise their VAT deduction entitlements. This article provides an in-depth analysis of the relevant provisions and summarises the tax authority’s opinions to support enterprises in correctly addressing late-payment situations during VAT declaration.

According to Clause 2, Article 14 of the Law on Value-Added Tax 2024, one of the mandatory conditions for input VAT deduction is the availability of non-cash payment evidence for purchases of goods or services valued from VND 5,000,000 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 for invoices valued at VND 5 million or more which are paid late, the enterprise may still declare and deduct input VAT at the time of receiving the invoices, based on the contract and VAT invoice, even though payment has not yet been made.

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

Nevertheless, Decree 181 does not provide detailed guidance on an issue that many enterprises frequently encounter: whether the enterprise may re-increase or “restore” the input VAT amount previously adjusted downward if non-cash payment evidence becomes available only after the contractual payment deadline.

Regarding this matter, we note that on 25 November 2025, the Tax Department (formerly known as the General Department of Taxation) issued Official Letter No. 5487/CT-CS (“Official Letter 5487”). This document provides formal guidance stating that, where the taxpayer has initially declared and adjusted to exclude deductible input VAT but subsequently obtains valid non-cash payment evidence, the taxpayer may re-declare and deduct the corresponding input VAT for the value of goods and services supported by such non-cash payment documents, in accordance with prevailing regulations. Through Official Letter 5487, the Tax Department has affirmed that a taxpayer’s right to declare and deduct input VAT remains protected as long as non-cash payment documents are available.

As this Official Letter was issued by the central tax authority and circulated to the Tax Offices of Bac Ninh Province and Khanh Hoa Province, it serves as generally applicable guidance for similar cases.

Based on the above guidance, it is worth noting that during a tax inspection, the tax authority may require the enterprise to adjust and reduce the deductible input VAT or deny a the VAT refund if non-cash payment document are not available by the contractual payment due date. This may result in (i) an additional tax liability arising in the tax declaration period in which the adjustment is made, resulting in late payment interest for the enterprise, or (ii) the unrefunded VAT amount being carried forward to the next period, thereby reducing the enterprise’s refundable tax balance.

Key Takeaways for Enterprises

Enterprises may rely on Official Letter 5487 as a credible basis when declaring VAT in order to safeguard their right to deduct input VAT, even where non-cash payment is made after the contractual payment deadline, provided that such deadline is clearly reflected in the contract or its appendices.

In the event that delayed payment is anticipated, the enterprise may proactively negotiate supplementary agreements through contract appendices to extend the payment deadline in line with the actual payment schedule, or incorporate more flexible payment terms in future contracts. This approach helps avoid the need to declare input VAT adjustments in the period when the contractual payment obligation arises and minimizes the risk of the tax authority requiring such adjustments, which could result in additional tax liabilities and late payment interest.