From July 1, 2025, Can Invoices For Goods And Services Under 20 Million VND Be Paid In Cash?

Analysis Of The Impact Of The New Regulation

Impact on businesses and business households positive

• Increased transparency: Helps control transactions and limit tax fraud.
• Promotes digital transformation: Encourages businesses and business households to adopt electronic payments, aligning with the trend of the digital economy. Challenges:
• Increased transaction costs: Some banks still apply transfer fees, especially for interbank transactions.
• Businesses need to change accounting processes: Businesses with many small-value transactions will need to adjust payment and accounting processes to comply with the regulations. According to the State Bank of Vietnam, by the end of 2023, 80% of non-cash transactions in Vietnam were still transactions valued at over 20 million VND. The new regulation will affect at least more than 2 million small and medium-sized enterprises, forcing them to change their payment methods.

Impact on specific industries

• Retail, supermarkets, convenience stores: Small transactions under 20 million VND account for over 90% of the total number of invoices at major retail chains (according to the Vietnam Retailers Association). If business customers want to deduct tax, they must pay via bank or QR code, instead of paying cash as before.
• Food and Beverage (F&B) industry: For restaurants and eateries serving business customers, if they previously accepted cash payments for invoices under 20 million VND, they now have to implement payments via bank or e-wallet so that business customers can deduct tax.
• Transportation and logistics industry: Many transportation companies regularly pay freight charges to drivers or service providers with small invoices. With the new regulation, they need to use non-cash payments to deduct tax, instead of paying directly in cash.

What Do Businesses Need To Prepare To Comply With The New Regulations?

• Switch to Non-Cash Payment Methods:
  • Open bank accounts for businesses and individual business households if they don’t already have one.
  • Use e-wallets, QR codes, and bank cards instead of cash payments.
  • Implement accounting software that directly connects with bank accounts for easy tracking and proof of transactions.
• Review Accounting and Tax Processes:
  • Review regular input costs with invoices under 20 million VND to ensure compliance with the new regulations.
  • Instruct accounting staff on how to store non-cash payment documents to avoid losing the right to deduct VAT.
• Refer to the list of exceptions stipulated by the Government:
  • Currently, the Government has not yet issued a list of exceptions. However, businesses can monitor the draft Decree for guidance to stay updated.

Can Invoices For Goods And Services Under 20 Million VND Be Paid In Cash From July 1, 2025?

Based on point b, Clause 2, Article 12 of the Law on Value Added Tax 2008 (amended by Clause 6, Article 1 of the Law on Amending the Law on Value Added Tax 2013), regulations on input value-added tax deduction are as follows:

Input Value-Added Tax Deduction

2. Conditions for input value-added tax deduction are stipulated as follows

a) There is a value-added tax invoice for purchased goods and services or a value-added tax payment document at the import stage; 

b) There is a non-cash payment document for purchased goods and services, except for goods and services purchased in each transaction with a value of under twenty million VND; …”

However, based on point b, Clause 2, Article 14 of the Law on Value Added Tax 2024 (effective from July 1, 2025), regulations on input value-added tax deduction are as follows:

“Input Value-Added Tax Deduction

…

2. Conditions For Input Value-Added Tax Deduction Are Stipulated As Follows

a) There is a value-added tax invoice for purchased goods and services or a value-added tax payment document at the import stage or a value-added tax payment document in lieu of the foreign party as stipulated in Clauses 3 and 4 of Article 4 of this Law. The Minister of Finance shall stipulate the value-added tax payment document in lieu of the foreign party;

b) There is a non-cash payment document for purchased goods and services, except for some special cases as stipulated by the Government;

c) For exported goods and services, in addition to the conditions stipulated in points a and b of this clause, there must also be: a contract signed with the foreign party for the sale, processing of goods, or provision of services; an invoice for the sale of goods or provision of services; a non-cash payment document; a customs declaration for exported goods; a packing list, bill of lading, and goods insurance document (if any). The Government shall stipulate the conditions for deduction in case of exporting goods through cross-border e-commerce platforms and some other special cases.

 …” 

Thus, according to current regulations, invoices valued at under 20 million VND are not required to have non-cash payment documents to be eligible for input value-added tax deduction.

And from July 1, 2025, when the Law on Value Added Tax 2024 takes effect, all invoices, including those valued at under 20 million VND, must have non-cash payment documents to be eligible for input value-added tax deduction, except for some special cases as stipulated by the Government.