In the context of ongoing adjustments to tax policies aimed at supporting production and business activities, the implementation of trade discounts and the application of value-added tax (VAT) reductions in 2025 and 2026 place high demands on businesses regarding the accuracy of invoice preparation and management. To standardize implementation, the Tay Ninh Provincial Tax Department issued Official Letter No. 4014/TNI-QLDN2 dated December 30, 2025, providing specific guidance on related matters. Below are the key points businesses need to understand to comply with legal regulations.
The VAT reduction policy will 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, as well as the corresponding applicable tax rates.
Specifically, goods and services currently subject to VAT under Article 10% will be subject to tax reduction policies, except for certain specific sectors such as telecommunications, finance and banking, securities, insurance, real estate business, and items subject to excise tax.
The tax reduction amount is determined depending on the VAT calculation method that the business is applying:
- For businesses that calculate taxes using the deduction method, the VAT rate for goods and services eligible for reduction will be 8%.
- For businesses that calculate VAT using the % method on revenue, when issuing invoices for goods and services eligible for tax reduction, the percentage rate (%) used to calculate VAT will be reduced by 20% compared to the currently applied rate.
Obligation to register for the sales discount program
Regarding the implementation of sales discount programs, many businesses are concerned about whether they need to register with the state management agency for trade. According to the response in Official Letter No. 4014/TNI-QLDN2, the Tay Ninh Provincial Tax Department stated that this is a matter within its specialized management scope. Therefore, businesses should proactively contact the Department of Industry and Trade where their headquarters are located for specific guidance in accordance with the law on trade promotion.
Determining whether a discount is a regular trade discount or considered a form of promotion is crucial for fulfilling the obligation to register or notify the program with the competent authority.
How to invoice for trade discounts
Based on the regulations in Decree No. 123/2020/ND-CP and Decree No. 70/2025/ND-CP, the issuance of invoices when trade discounts arise must comply with strict principles to ensure transparency and consistency in tax management.
Principles for showing discounts on invoices
According to point d, clause 6, Article 10 of Decree 123/2020/ND-CP, when a business provides a trade discount to customers or applies a promotional program in accordance with the law, this discount must be clearly shown on the invoice. The VAT taxable price is determined as the price after deducting the discount, corresponding to the amount excluding tax.
Procedure for handling invoices when sales discounts are applied.
For discounts determined based on the quantity or sales volume of goods or services achieved, businesses can choose one of the following two treatment methods:
- Direct adjustment on the invoice of the last purchase or the next period: The total discount amount from previous transactions is deducted directly from the sales invoice of the last purchase or the next period. In this case, it must be ensured that the discount value does not exceed the total value of goods and services recorded on the invoice.
- Adjustment Invoice Issuance: Businesses issue adjustment invoices, accompanied by a detailed list of the original invoices requiring adjustment, the discount amount, and the corresponding VAT amount. This list must be kept at the business for inspection and auditing purposes when requested by the tax authorities or other competent state agencies.
Based on the adjusted invoice already issued, the seller and the buyer shall declare adjustments to revenue, output VAT, and input VAT in the period in which the adjusted invoice was issued, following 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
