Issuing invoices for products and services used as gifts or donations is a frequent occurrence in businesses. To ensure legal compliance, especially after the promulgation of Decree 70/2025/ND-CP (amending Decree 123/2020/ND-CP) and guidance from Official Letter No. 33436/HAN-QLDN3 of the Hanoi City Tax Department, accountants need to thoroughly understand the latest regulations on buyer criteria and how to determine the taxable price.
Even if you don't collect payment, you still have to issue an invoice.
According to Clause 1, Article 4 of Decree 123/2020/ND-CP, when selling goods or providing services, the seller must issue an invoice to the buyer. This regulation applies to cases where goods or services are used for:
- Advertising, modeling.
- Give, present, offer, exchange.
- Paying wages to workers.
Note: Giving gifts without issuing invoices will be considered tax evasion or a violation of invoicing regulations, and may be subject to administrative penalties according to Decree 125/2020/ND-CP.
Instructions on how to record buyer information according to Decree 70/2025/ND-CP
The most significant change in Decree 70/2025/ND-CP is the detailed specification of cases for recording buyer criteria, aiming to reduce the administrative burden on businesses.
For buyers who are businesses with a tax identification number.
If the recipient of the gift is an organization, household business, or individual business registered for tax purposes, the invoice must fully detail:
- Buyer's name: The full name of the organization or individual as stated in the license.
- Address: The registered office of the business.
- Tax identification number: Must be accurate.
For individual customers who are not engaged in business and do not have a tax identification number.
In this case, the regulations were relaxed to facilitate the issuance of large-volume invoices:
- Required information: Clearly state the recipient's name and address.
- Optional information: Tax identification number or Personal identification number is not required (except when requested by the client for tax deductions or asset registration).
Special cases at supermarkets and shopping malls.
According to Clause 7, Article 1 of Decree 70/2025/ND-CP (amending Article 10 of Decree 123/2020/ND-CP), if the gift-giving takes place directly to individual customers at these sales points:
- The invoice does not necessarily have to include: the buyer's name, address, tax identification number, and digital signature.
- This applies to concentrated promotional programs that offer gifts with purchases made at the counter.
Principles for determining value and tax rates
Many accountants are confused when determining the value of gifts on invoices because there is no actual cash flow generated.
- VAT taxable value: According to Clause 3, Article 7 of Circular 219/2013/TT-BTC, the taxable value for goods given as gifts is the taxable value of similar or equivalent goods and services at the time the gifting activity occurs.
- Tax rate: The applicable tax rate (5%, 8%, or 10%) will depend on the type of goods or services, as stipulated in the Value Added Tax Law and any tax reduction decrees (if applicable).
- Presentation method: The invoice must still include all the following: Amount, Tax rate, Tax amount, and Total payment. In the goods description section, it should clearly state: "Goods given as a gift, no payment required."
Conditions for gift expenses to be deductible when calculating corporate income tax.
For expenses related to gifts and donations to be recognized as legitimate business expenses and eligible for input VAT deduction, businesses need to prepare a "clean" set of documents including:
- Output invoices: Prepared correctly according to the instructions above.
- Documentation proving the purpose: Decision approving the gift program, marketing plan, or approval from the Board of Directors.
- Receipt documents: Gift handover record, list of customers who have signed for receipt, or shipping bill of lading (if sending gifts long distances).
- Input documents: Purchase invoices for goods intended as gifts, to prove origin and cost.
Conclusion and recommendations
Strict adherence to the guidelines in Circular 33436 and Decree 70/2025/ND-CP not only helps businesses transparently disclose their financial data but also serves as a crucial legal shield when dealing with tax authorities. A small error in recording the buyer's details or a missing accompanying document can lead to the disallowance of expenses, causing direct economic losses for the business.
Based on the updates in Official Letter 33436/HAN-QLDN3, accountants should note the following:
- Reviewing target customers: Clearly categorize customers with tax identification numbers (TINs) and individual customers to accurately record buyer criteria from the outset. In addition, businesses can refer to various resources. accounting services Professional support is available for information control and regular invoice reconciliation.
- Market price: Avoid listing prices that are significantly lower than the usual selling price to prevent tax assessments by the tax authorities.
- Data synchronization: Ensure that the quantity of gifted goods on the invoice matches the delivery note and the actual handover list.
Are you having trouble processing electronic invoices for complex promotional programs? Don't hesitate to contact the MAN – Master Accountant Network team for support and advice!
Contact information MAN – Master Accountant Network
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Content production by: Mr. Le Hoang Tuyen – Founder & CEO MAN – Master Accountant Network, Vietnamese CPA Auditor with over 30 years of experience in Accounting, Auditing and Financial Consulting.
MAN Editorial Board – Master Accountant Network
