From 2026, regulations regarding payment methods for employees will undergo significant changes. According to guidance in Official Letter No. 1000/CTH-QLDN1 from the Can Tho City Tax Department, payments of 5 million VND or more must be made using non-cash methods if businesses wish to include them as deductible expenses when determining corporate income tax.
Major changes to the cash payment threshold.
Previously, many businesses were accustomed to a higher level of control over cash payments. However, according to new guidelines based on the Corporate Income Tax Law No. 67/2025/QH15 and related documents, the 5 million VND threshold has become a crucial limit that requires special attention.
This means that whenever a payment to an employee exceeds 5 million VND per payment, the business is not allowed to pay in cash if it wants to ensure that the expense is eligible for deduction.
Bank transfer is required for payments of 5 million VND or more.
According to Clause 1, Article 9 of Decree 320/2025/ND-CP, the conditions regarding non-cash payment documents apply to:
- Purchases of goods, services, or payments to employees with a value of 5 million VND or more per payment.
- Transactions under 5 million VND but occurring multiple times on the same day with the same party, if the total reaches 5 million VND or more.
Thus, not only individual expenses but also the cumulative value for the day are subject to control. Payment via bank transfer becomes a mandatory requirement for expenses to be considered reasonable and valid during tax settlement.
Conditions for inclusion in deductible expenses
In response to the company's letter, the tax authorities emphasized that payments to employees of 5 million VND or more are only deductible expenses if they meet the following criteria:
- Actual costs incurred and directly related to production and business operations.
- There are valid invoices and supporting documents as required by regulations.
- There is documentation proving non-cash payment for expenses that are required to be paid via bank transfer.
Without meeting any of the above conditions, businesses risk having expenses disallowed when determining taxable corporate income.
Important notes for business accountants.
Lowering the control threshold from 20 million VND to 5 million VND creates greater pressure on the accounting department. Businesses need to:
- Review and update all employee bank account information.
- Establish a process for paying salaries, bonuses, and allowances through bank transfers.
- Monitor the cumulative payment value for the day to avoid violations due to oversight.
In addition to ensuring tax compliance, switching to cashless payments also helps businesses increase cash flow transparency and reduce risks during tax audits and inspections.
In summary, from 2026 onwards, all payments to employees of 5 million VND or more must be made through a bank if businesses want to protect their tax interests. Proactively adjusting payment procedures from the beginning of the year will help businesses avoid unnecessary risks during the tax settlement process.
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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.
