Identifying risky invoices is becoming a major concern for accountants and business owners as tax authorities intensify their monitoring of electronic invoices using AI and big data analytics. Just one transaction lacking transparency can lead to businesses facing the risk of expense disallowance, VAT arrears, administrative penalties, or even criminal charges. This is especially true in the spirit of... Official Document 1125/CT-QLTT On February 13, 2026, businesses are facing intense scrutiny regarding the transparency of their input documents. This article will help businesses identify the most common signs of risky invoices, from the company's legal documentation and actual supply capacity to transaction cash flow and financial statement indicators. Simultaneously, MAN – Master Accountant Network will explore the new tax authority inspection process for 2026 and effective preventative measures to help businesses proactively protect themselves against legal and tax risks.
What are the telltale signs of a risky invoice?
Signs of a risky invoice include unusual occurrences in the invoice, the issuing business, or economic transactions, indicating that the invoice does not reflect the actual transaction or violates tax regulations. According to current regulations, these are electronic invoices or VAT invoices showing signs of tax law violations, including:
- A fictitious sales invoice (without actual goods or services attached).
- Invoices issued by businesses that have abandoned their business address or are temporarily suspended from operation.
- The invoices were used to inflate expenses in order to reduce corporate income tax or fraudulently claim VAT refunds.
Why should we pay special attention to identifying risky invoices?
The year 2026 marks a turning point when the Tax Authority applies the K coefficient.The K coefficient is a risk warning tool applied by the Tax authorities on the electronic invoicing system to control the issuance of fraudulent invoices and tax evasion. and algorithms that analyze taxpayer behavior. The unintentional or intentional use of risky invoices will lead to:
- Disallowed expenses: Not considered deductible expenses when settling corporate income tax.
- Tax collection: Input VAT cannot be deducted.
- Administrative penalties: Fines range from 20 to 50 million VND for each violation.
- Criminal risk: If the invoice value is large or there are signs of a series of fraudulent activities, the case will be transferred to the police for investigation into the crimes of "Illegal trading of invoices" or "Tax evasion".
In summary, indicators of risky invoices are legal irregularities, business capacity issues, cash flow problems, and transaction documentation issues, helping businesses and tax authorities identify invoices that may be illegal or lack actual transaction details.
Identifying legally risky invoices
To screen partners right from the start, accountants need to pay special attention to any irregularities in the legal documentation of the invoice issuer.
A young company with huge revenue.
One of the most common indicators of risky invoices is that newly established entities (less than 2 years old) have sales volumes reaching tens or hundreds of billions of VND.
- Suspicious sign: High sales revenue but very few input invoices, or only invoices from other risky entities. This suggests the business does not have a real source of goods but only acts as a "transfer point" for invoices.
The phenomenon of "professional legal representatives"
The tax authorities have now linked population data and business registrations. If an individual is listed as the legal representative for a series of businesses in different provinces and cities (Da Nang, Quang Ninh, An Giang, etc.) with unrelated industries, this is a very clear indicator of risky invoices. These businesses are often established in a chain to issue cross-invoices in order to erase traces of money flow.
Business registration information is constantly changing.
The entities that issue invoices change frequently:
- Head office address (continuously changing).
- The legal representative (instead of someone with fake credentials or an employee).
- The operating status (from active to temporarily suspended and then back to active). The purpose of this is to make it difficult for tax officials to conduct post-audits and on-site verification.
Identifying risks based on actual supply capacity.
Many businesses, despite having all the necessary legal documents, are completely lacking in production and business capabilities.
The absurdity of geographical distance and transportation.
Imagine your business is located in Ca Mau but imports heavy materials (such as sand, stone, and steel) from a supplier in the northern mountainous region without going through any intermediaries or local branches.
- Signs of a risky invoice: Inability to prove the method of transportation (transportation contract, vehicle license plate, toll fees, fuel costs). A large invoice with zero or illogical transportation costs is a target for tax inspectors.
The discrepancy between warehousing and inventory.
A business issues invoices for the sale of thousands of tons of inventory, but its headquarters are a 40m2 virtual office with no warehouse system, no loading and unloading workers, and no lifting equipment. This is a sign of a risky invoice that accountants need to check through on-site verification or by reviewing the partner's labor usage reports.
Identifying risky invoices through cash flow and contracts.
Cash flow is the "lifeblood" of economic transactions. If cash flow is disrupted, the bills are inevitably at risk.
Cash flow
To legitimize invoices exceeding 20 million VND that require bank transfers, these individuals often employ the following tactic:
- The buyer transfers the money to the seller, and the seller withdraws the cash and returns it to the buyer (after deducting invoice fees).
- Alternatively, the money may pass through a series of intermediary companies before returning to the original buyer. Tax authorities, in coordination with banks, can easily detect money transfers that occur on the same day or have an unusually repetitive nature.
The customer base is too narrow.
If a business has trillion-VND revenue but focuses on only 1-2 fixed customers, and these customers have a linked relationship (shared owner, shared address), this is a sign of risky invoices within a linked business ecosystem aimed at transfer pricing or tax evasion.
Analyzing the identifying signs of risky invoices in financial statements.
Numbers don't lie if we know how to analyze the correlation between them.
The registered capital and revenue are not commensurate.
The company registered with a capital of only 100 million VND but issued invoices worth billions of VND every day. Although the law does not prohibit revenue exceeding capital, such a huge discrepancy in a short period without supporting resources is a typical sign of risky invoices that should be added to the warning list.
"Fictitious" inventory on the books.
On the balance sheet, the inventory value is very large, but there are no warehousing costs, cargo insurance costs, or warehouse management labor costs. This is often the result of "buying input invoices" to balance taxes without actual goods, leading to fictitious inventory that persists year after year.
Procedures for reviewing and checking risky invoices: Points to note
According to Official Letter 1125/CT-QLTT, the tax authorities have completely changed their working methods. Accountants need to understand this process to prepare explanatory documents. The table below will help you compare in detail the important changes in how explanations are received, locations are verified, data is analyzed, and the burden of proof for businesses.
| Criteria | The old way | New process 2026 |
| Method of receiving explanations | Accept written explanations via online submission or mail. | Verification is necessary. Do not stop issuing warnings if the business only submits a document without original supporting documents for verification. |
| Verify location | They mainly check the registration documents. | On-site verification. Tax officials will visit the warehouse and office in person to check the presence of personnel. |
| Data analysis | Regular audits are conducted based on monthly/quarterly tax reports. | Real-time analysis. AI continuously scans based on the K coefficient (buy-sell correlation) and 9 risk invoice criteria from the General Department of Taxation. |
| Burden of Proof | The tax authorities are looking for evidence of violations. | Businesses must provide proof themselves. Without sufficient documentation regarding shipping, warehousing, and cash flow, invoices are automatically considered risky. |
The comparison table shows that the process for checking risky invoices in 2026 has changed towards stricter and more proactive measures from the Tax authorities. Instead of just checking paper documents as before, the tax authorities now combine on-site verification, real-time data analysis using AI, and require businesses to prove the legality of the transaction. This means that all input invoices must have a complete set of supporting documents such as contracts, transportation, warehousing, and clear cash flow. Businesses and accounting departments need to proactively review their document management processes to avoid being included in the risky invoice warning list and minimize the risk of tax arrears or penalties.
Solutions for handling cases where signs of a risky invoice are detected.
If, after reviewing your records, you find any signs of risky invoices in your business, take these four steps immediately:
Step 1: Lookup and cross-checking
Use the General Department of Taxation's online portal to look up the seller's tax identification number. Pay particular attention to the seller's status at the time the invoice is issued.
- If they were active at the time but have since absconded, you need an extremely thorough file to protect your rights.
Step 2: Complete a “clean record”
A set of documents to refute doubts about the identifying features of a risky invoice must include:
- Detailed economic contract.
- Goods delivery and receipt record (with signatures of the sender, receiver, and carrier).
- Warehouse receipt/delivery slip.
- Bank payment documents (Statement with clear details).
Step 3: Proactively adjust
If you suspect the transaction is fictitious (e.g., purchasing invoices), the best advice is to proactively file an amended tax return, adjusting the VAT and corporate income tax deductions downwards before the tax authorities announce an audit decision. This voluntary action will help the business avoid penalties for "Tax Evasion" and only have to pay late payment fees.
Step 4: Explanation
When dealing with tax authorities, focus on the practicality of the transaction. Clearly explain the origin of the goods: Who purchased them from? Who sold them to? What means of transport were used? Where are they stored? Transparency in explanation will help eliminate any doubts about identifying risky invoices.
For businesses without a strong professional team, using accounting services Professionalism is the optimal solution for reviewing and correcting these errors.
How to prevent risky invoices
To avoid having to "chase after" the consequences, businesses should build a systematic tax risk management system.
Set up vendor filters
Never conduct business with a partner solely over the phone. Request a company profile, warehouse photos, and conduct a monthly tax identification number lookup. Checking for suspicious invoice patterns should become a mandatory procedure before accountants approve payments.
Application of automated reconciliation technology
In 2026, next-generation electronic invoicing software will integrate a warning feature. The software will automatically connect to the tax authority's blacklist to immediately alert you if there are any issues with the seller's tax identification number. This is a powerful tool to eliminate human errors.
Smart document storage
Instead of just storing invoices, digitize all accompanying documents (contracts, delivery notes, bills of lading). Centralized storage helps businesses be ready to respond quickly to surprise inspections regarding risky invoices.
Enhancing the capabilities of the accounting team.
Accountants are not just data entry clerks; they must be risk analysts. Regularly updating their knowledge of regulations such as Circular 1125/CT-QLTT and understanding the signs of risky invoices is crucial for protecting the assets and reputation of the business.
For businesses without a strong professional team, using professional accounting services is the optimal solution to review and correct these errors.
Conclude
Managing and identifying risky invoices is no longer just a matter for the Tax Department, but a matter of survival for all businesses in 2026. By mastering the signs of risky invoices in terms of legal aspects, actual capacity, cash flow, and financial reporting, you will build a solid defense for your organization.
Remember: Transparency today is security for the future. Don't let small mistakes in document verification lead to unnecessary legal consequences.
Contact information MAN – Master Accountant Network
- Address: No. 19A, Street 43, Tan Thuan Ward, Ho Chi Minh City
- Mobile/Zalo: 0903 963 163 – 0903 428 622
- E-mail: man@man.net.vn
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.
Frequently Asked Questions about Identifying Risky Invoices
According to the 2026 regulations, you still have a chance to claim a deduction if you can prove the transaction was genuine. You need to prepare: a warehouse receipt, bank payment documents, a contract, shipping documents, and a detailed explanation of the transaction. However, the risk of the expense being rejected remains very high if the seller is on a high-risk blacklist.
The K ratio is an indicator comparing sales revenue and the value of goods purchased. If this ratio exceeds the set threshold (usually indicating unusually high revenue compared to the cost of goods purchased), the tax authority's AI system will automatically list the business as having suspicious invoices and request immediate explanation.
In addition to being subject to back taxes and late payment penalties (0.031 TP3T/day), businesses are also subject to administrative fines ranging from 20 to 50 million VND for using illegal invoices. If the amount of tax evaded reaches 100 million VND or more, the business may face criminal prosecution under Article 200 of the Penal Code. If the seller absconds but I actually have the goods, am I still eligible for a tax deduction?
What is the K-factor and how is it related to the bill of risk?
How much is a business fined for using risky invoices?
