The accounting conditions for authorized payments are a crucial issue that businesses need to pay special attention to when settling corporate income tax. In the context of increasingly stringent tax policies controlling cash flow, purchase transactions made through employees or authorized individuals must fully meet legal criteria to be accepted as valid expenses.
From 2025, along with the promulgation of Decree 320/2025/ND-CP and guidance from the tax authorities, especially Official document 619/VLO-QLDN3 According to a regulation issued by the Vinh Long Provincial Tax Department on March 6, 2026, the accounting conditions for authorized payments have undergone several notable changes. If businesses do not comply with regulations regarding documentation, payment methods, and authorization files, these expenses may be disallowed when determining deductible expenses.
This article will provide a detailed analysis of legal regulations and guidance on appropriate accounting procedures to ensure businesses fully meet the requirements for accounting for authorized payment expenses under the new regulations.
New regulations on accounting conditions for authorized payments starting from 2025.
Since Decree 320/2025/ND-CP officially came into effect, the management mechanism for expenses related to purchasing goods on behalf of others or making payments on their behalf has been more strictly controlled to increase transparency in financial transactions within businesses.
According to Article 9 of this Decree, the conditions for accounting for authorized payments to be included as deductible expenses when determining corporate income tax depend heavily on the payment method and accompanying documentation.
The most significant change is the reduction in the threshold for cashless payments. Previously, only transactions exceeding 20 million VND were required to be paid through a bank, but now this threshold has been adjusted down to 5 million VND for transactions paid via authorization.
Therefore, to ensure proper accounting of authorized payments, all purchases of goods or services exceeding 5 million VND must be paid by the employee using their personal bank account, after which the company will make a reimbursement transfer.
Official document 619/VLO-QLDN3 from the tax authority also emphasizes that in some specific cases, such as purchasing agricultural products from non-business individuals, if a business applies the payment authorization method but does not meet the conditions for accounting for authorized payments, then that payment may still be disallowed as a deductible expense when calculating taxes.
The legal documentation meets the requirements for accounting for authorized payment expenditures.
For expenses incurred for purchasing on behalf of others to be accepted by the tax authorities, businesses need to build a complete and transparent legal dossier. Meeting the accounting requirements for authorized payments depends not only on invoices or payment documents but also on the company's internal regulations.
Finalize internal regulations and authorization documents.
One of the key factors in ensuring the proper accounting of authorized payments is that businesses must establish a clear internal legal framework. The necessary documents include:
- Internal financial or expenditure regulations clearly specify the circumstances under which employees are permitted to make payments on behalf of the company.
- The decision to assign tasks or issue a purchase authorization to a specific individual for each transaction.
- The reimbursement process between businesses and employees aims to control cash flow and demonstrate the nature of the transaction.
These documents are crucial when businesses need to demonstrate the accounting treatment of authorized payments during tax audits or inspections.
Invoice requirements are necessary to fulfill the accounting conditions for authorized payment expenses.
In purchasing transactions, although the worker directly pays the supplier, legally, the buyer must still be the business.
Therefore, to meet the accounting requirements for authorized payments, invoices must meet the following criteria:
- Invoices must include the full name of the business, address, and tax identification number as stated in the business registration certificate.
- The employee's name must not be included in the buyer's section.
- Invoices must accurately reflect the content of transactions related to production and business activities.
If the invoice is in the name of an individual instead of a business, the transaction will not meet the requirements for accounting for authorized payments, resulting in the inability to deduct VAT and potentially being disallowed as an expense.
Regulations regarding cashless payments in authorization.
One of the key criteria for accounting for authorized payments is that the payment method must be through the banking system.
The typical process includes two steps:
- Workers use bank cards or transfer funds from their personal accounts to pay suppliers.
- The company then transfers the money from the company account to the employee's account to reimburse the amount spent.
Following this process correctly helps businesses demonstrate a transparent cash flow, thereby fully meeting the legal requirements for accounting for authorized payments.
Classify documents according to the accounting conditions for authorized payment expenditures.
In practice, accountants need to categorize expenses by invoice value and payment method to determine their taxability.
| Invoice value | Payment methods | VAT deduction | Deductible expenses |
| Under 5 million VND | Cash or bank transfer | Accepted | Accepted |
| From 5 million VND onwards | Transfer | Accepted | Accepted |
| From 5 million VND onwards | Cash | Not deductible | No charges will be applied. |
Note: In addition to the payment method, businesses must also ensure that all authorization documents are complete. If the documents proving the purchase transaction are missing, that expense may still not meet the conditions for accounting for expenses authorized for payment.
The accounting process meets the requirements for recording authorized payment expenditures.
To demonstrate the validity of a transaction, the business needs to record the accounting entry clearly, accurately reflecting the flow of money between the business, its employees, and its suppliers.
Accounting when an employee makes a payment to a supplier.
When the employee brings back the invoice along with the payment documents, the accountant makes the following journal entries:
Record the expense or goods as follows:
- Debit accounts 152, 153, 156, 642,...
- Debit account 133
- There is account 331 (Suppliers)
Transferring the payment processing duties to the employee:
- Debit account 331
- Account number 1388 (Employees)
See details: Goods accounting
Accounting when a business reimburses employees.
After the application is approved, the company transfers the refund to the employee:
- Debit Account 1388 (Employees)
- There is account 112 (Bank deposits)
Properly recording this process makes it easier for businesses to demonstrate the accounting conditions for authorized payments when tax authorities conduct an audit.
Conclude
Full compliance with accounting requirements for authorized payments is crucial for businesses to mitigate tax risks. With the new regulation reducing the non-cash payment threshold to 5 million VND under Decree 320/2025/ND-CP, businesses need to proactively adjust their internal processes and train employees on how to collect supporting documents correctly.
In practice, many businesses struggle with standardizing authorization documents, controlling cash flow, and ensuring documentation complies with legal regulations. Therefore, the use of tax accounting services Professional accounting services will help businesses build transparent accounting processes, optimize legitimate expenses, and ensure full compliance with current regulations for accounting for authorized payments.
With complete legal documentation, transparent payment methods, and clear accounting procedures, businesses can easily meet the accounting requirements for authorized payments, thereby ensuring that legitimate expenses are deductible when determining corporate income tax.
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
- Email: 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 Regarding Accounting Conditions for Authorized Expenses
Yes, but only if the business fully meets the legal requirements for accounting for authorized payments. This includes having a clear written authorization, invoices in the business's name, and payment documents that comply with regulations on cashless payments. If any of these elements are missing, the expense may be disallowed during tax settlement.
To qualify for accounting purposes for authorized payments, invoices must include the company's name, address, and tax identification number. If the invoice is in the name of an individual employee instead of the company, the expense will not be considered a valid expense and will not be eligible for value-added tax deduction.
According to the new regulations in Decree 320/2025/ND-CP, expenses for purchasing goods or services through authorized payment methods of VND 5 million or more must be paid using non-cash methods. This is one of the important criteria to ensure that authorized payment expenses are accounted for and included as deductible expenses when determining corporate income tax.
In many cases, even if payment has been made through a bank, if the business does not have a valid authorization document, the tax authorities may still assess that the transaction does not fully meet the conditions for accounting for authorized payments. Therefore, in addition to the payment aspect, businesses need to focus on building complete legal documentation to reduce risks during tax audits. Are expenses paid by employees on behalf of the company considered deductible business expenses?
Whose name should be included on the receipt when an employee pays on behalf of the customer?
What is the minimum payment amount required to be paid through a bank?
If a power of attorney is missing but the payment is made through a bank, is the expenditure valid?
