The application of trade discounts and value-added tax (VAT) reduction policies in the 2025-2026 period places high demands on businesses to understand and correctly implement regulations on invoice preparation and processing. To address practical difficulties, the Tay Ninh Provincial Tax Department issued Official Letter No. 4014/TNI-QLDN2 dated December 30, 2025, which provides specific guidance on many related issues. This article summarizes and analyzes the key points that businesses need to pay attention to in order to comply with tax laws and regulations.
VAT reduction policy to be applied in 2026
According to the guidelines in Official Letter No. 4014/TNI-QLDN2, the VAT reduction in 2026 will be implemented based on Government Decree No. 174/2025/ND-CP dated June 30, 2025, and National Assembly Resolution No. 204/2025/QH15. Businesses need to accurately identify the groups of goods and services eligible for the tax reduction in order to apply the appropriate tax rate.
Specifically, goods and services currently subject to VAT under Article 10% will have their tax reduced, except for certain specific sectors such as telecommunications, finance and banking, securities, insurance, real estate business, and products and services subject to excise tax.
The tax reduction rate applied varies depending on the method of calculating VAT used by the taxpayer:
- For businesses declaring VAT using the deduction method: the VAT rate for goods and services eligible for reduction will be 8%.
- For businesses declaring VAT using the direct method based on revenue: a reduction of 20% is granted, with a rate of % used to determine the VAT payable when issuing invoices for goods and services eligible for preferential treatment.
Obligation to register for the sales discount program
One of the issues frequently raised by businesses is whether sales discount programs are required to be registered with the state trade management agency. In response to this, the Tay Ninh Provincial Tax Department clarified in Official Letter No. 4014/TNI-QLDN2 that administrative procedures related to trade promotion are not within the scope of the tax authority's professional guidance.
Accordingly, businesses should proactively contact the Department of Industry and Trade in the locality where the program is implemented for specific guidance, based on current legal regulations on trade promotion. Determining whether the discount is a regular trade discount or a form of promotion will directly affect the obligation to register or notify the relevant specialized management agency.
How to invoice for sales-based trade discounts.
Based on the regulations in Decree No. 123/2020/ND-CP and Decree No. 70/2025/ND-CP, the issuance of invoices in cases where trade discounts arise must strictly adhere to principles to ensure transparency and accuracy in tax management.
Principles for showing discounts on invoices
According to Clause 6, Point d, Article 10 of Decree 123/2020/ND-CP, when businesses apply trade discounts to customers or implement promotional programs in accordance with the law, this discount must be clearly shown on the invoice. The VAT taxable price is the adjusted price after deducting the discount, i.e., the value excluding VAT after deduction.
Options for handling invoices when sales discounts are incurred.
In cases where discounts are determined based on the volume or sales of goods and services consumed, businesses can choose one of the following two methods of processing:
- Direct discount adjustment on the invoice of the last purchase or the next period: The total discount amount is deducted directly from the sales invoice or service provision invoice, provided that the discount amount does not exceed the value stated on the invoice.
- Separate adjustment invoice: Businesses must issue a downward adjustment invoice accompanied by a detailed list of related invoices, clearly stating the adjusted amount and the corresponding adjusted VAT. This list must be kept by the business and presented upon request from the tax authorities or other competent agencies.
Based on the adjusted invoice issued, both the seller and the buyer are responsible for declaring adjustments to revenue, output VAT, and input VAT in the tax period in which the adjusted invoice was issued, in accordance with the instructions in Official Letter No. 4014/TNI-QLDN2 dated December 30, 2025, from the Tay Ninh Provincial Tax Department.
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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.
Source: Article by LuatVietnam
