With the Value Added Tax (VAT) policy undergoing significant changes between 2025 and 2026, handling invoices for returned goods is becoming a perplexing issue for the accounting community. Incorrect application of the tax rate not only leads to discrepancies in accounting records but also carries the risk of administrative penalties for invoice violations.
This article will clarify the latest regulations in Decree 70/2025/ND-CP and Resolution 204/2025/QH15 to help businesses correctly implement this procedure in 2026.
Key legal basis
Entering 2026, regulations on VAT and invoices will be based on two key legal documents:
Resolution No. 204/2025/QH15
Resolution 204/2025/QH15 is effective from July 1, 2025 to December 31, 2026. The resolution clarifies the specific scope of application as follows:
“Reduce the value-added tax rate by 2%, applicable to the groups of goods and services specified in Clause 3, Article 9 of the Value Added Tax Law No. 48/2024/QH15 (also known as 8%), except for certain groups of goods and services as follows: telecommunications, financial activities, banking, securities, insurance, real estate business, metal products, mining products (excluding coal), and goods and services subject to special consumption tax (excluding gasoline).”
This document is a continuation of the policy to support the economy, allowing for a further reduction in VAT from 10% to 8% for certain groups of goods and services in 2026.
Decree 70/2025/ND-CP
This is an amendment and supplement to Clause 1, Article 4 of Decree 123/2020/ND-CP. The new point of this Decree has definitively resolved the controversies regarding the application of tax rates to returned goods.
“When selling goods or providing services, the seller must issue an invoice to the buyer (including cases where goods and services are used for promotions, advertising, samples; goods and services used for giving, gifting, exchanging, paying as wages to employees, and internal consumption (except for goods circulated internally to continue the production process); exporting goods in the form of loans, borrowing, or returning goods) and cases where invoices are issued as prescribed in Article 19 of this Decree. The invoice must contain all the information as prescribed in Article 10 of this Decree. In case of using electronic invoices, they must follow the standard data format of the tax authority as prescribed in Article 12 of this Decree.”
The combination of a document regulating tax rates (Resolution 204) and a document regulating invoicing methods (Decree 70) forms a complete legal framework that accountants must strictly adhere to.
New regulations: Which tax rate should be applied to returns in 2026?
The most common problem is: How should the invoice be recorded if goods were purchased at a time when the tax rate was 10% but returned at a time when the tax rate was reduced to 8% (or vice versa)?
Based on Point a, Clause 3, Article 1 of Decree 70/2025/ND-CP, the golden rule is established as follows:
"In cases where purchased goods are returned in whole or in part due to incorrect specifications or quality, the seller shall issue a return invoice… The tax rate on the return invoice must be recorded according to the tax rate in effect at the time the invoice was issued when the goods were purchased."
Why is that regulation in place?
From an economic standpoint, returning goods is a "reverse" transaction of the original purchase.
- Symmetry: When purchasing goods, the buyer declared input tax deductions (e.g., 10%). When returning goods, the goal is to refund the exact amount of the deducted tax to the State budget.
- Avoiding profiteering: If allowing recording based on the current tax rate (e.g., 8% when the tax is decreasing), businesses could unfairly benefit from the difference in the 2% tax rate, causing budget losses or distorting the nature of the refund transaction.
Practical examples
To better understand this, let's consider a real-world application of Resolution 204/2025/QH15:
Let's assume the following situation: In November 2025, Company X (the seller) issues an invoice to Company Y (the buyer) for a shipment of electronic components worth VND 500,000,000, with a VAT rate of 10% (tax amount of VND 50,000,000).
By February 2026, due to a technical error, Company Y returned the entire shipment. At this time, according to Resolution 204/2025/QH15, this item was enjoying a preferential tax rate of 8%.
Below, MAN – Master Accountant Network analyzes two possible solutions, specifically as follows:
- The error: Company X issued a return invoice with a tax rate of 8%. This resulted in the buyer only receiving a refund of VND 40,000,000 in tax, while VND 50,000,000 had been deducted previously.
- The correct procedure (according to Decree 70/2025/ND-CP): Company X must issue a return invoice clearly stating the tax rate as 10%. The adjusted tax amount must match the invoice issued in November 2025.
Standard return invoice processing procedure for 2026
To ensure transparency and accuracy, accountants need to follow this three-step process:
Step 1 – Reconcile and verify the original invoice
Before issuing a return invoice, the accountant must retrieve the electronic invoice that was issued when the goods were sold.
- Check the invoice number, symbol, and date.
- Determine the exact tax rate that was in effect at that time.
- Check the invoice status on the General Department of Taxation's system to ensure the original invoice is valid.
Step 2 – Prepare a return agreement (Return Receipt)
Although current regulations are more flexible in terms of form, for the purpose of future inspections, both parties should sign a Return Receipt (with digital signatures). The content of the receipt should clearly state:
- Reason for return (defective goods, not as described, etc.).
- Provide a detailed list of the items and quantities returned.
- The value before tax and the VAT amount (must correspond to the tax rate on the original invoice).
Step 3 – Generate invoices using the software.
In the electronic invoicing software, the accountant selects the transaction "Return Invoice" (or Adjustment or Replacement Invoice depending on the software configuration):
- Content: Clearly state “Return goods according to invoice number… symbol… dated…”.
- Tax rate: Select the tax rate of the original invoice (the 2026 software system usually allows manual selection of 5%, 8%, 10%, or other tax rates for refund purposes).
Mistakes and legal risks to avoid.
During the process of advising and supporting businesses, we have noticed the following common mistakes:
- Confusion between "Adjustment Invoice" and "Return Invoice": According to Decree 70, returned goods require an invoice to "adjust for reduction or replacement." However, many accountants still confuse this with correcting ordinary errors.
- Incorrect tax rate application due to software default: Some accounting software automatically assigns the current tax rate (8%) to all invoices issued in 2026. If the accountant does not double-check, issuing an invoice with the 8% rate for goods purchased at the 10% rate is against regulations.
- Omission to adjust tax declarations: After issuing a return invoice, both the seller and the buyer must declare adjustments to revenue and VAT on form 01/GTGT for the period in which the return invoice was issued.
Risk: If found to have applied the wrong tax rate when returning goods, businesses may be fined from VND 2,000,000 to VND 8,000,000 for issuing invoices improperly, and may also be subject to back taxes and late payment penalties.
Recording the tax rate on the return invoice according to the tax rate of the original sales invoice is a mandatory regulation, specifically stipulated in Decree 70/2025/ND-CP. This provides a legal basis for businesses to properly perform accounting tasks, ensure their tax deduction rights, and avoid unnecessary legal risks.
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.
Source:
- Decree 70/2025/ND-CP amends and supplements Decree 123/2020/ND-CP.
- Resolution No. 204/2025/QH15 of the National Assembly.
- Article Vietnamese Law
