Reasonable Expenses Without Invoices for Businesses: Full Guide & Updated Regulations 2025

1. What Are Reasonable Business Expenses?

Reasonable expenses are actual expenditures incurred in the course of business operations that are deductible when calculating Corporate Income Tax (CIT). To be considered reasonable and deductible, an expense must meet the following conditions:

• Directly related to business activities: Includes expenses like raw materials, salaries, rent, marketing, etc.
• Legally documented: Supported by valid invoices or alternative documents such as contracts, receipts, or payment vouchers.
• Properly recorded in accounting books: Expenses must be accurately and timely entered.
• In compliance with tax and accounting regulations: Includes limits on certain expenses (e.g., advertising, training, hospitality).

These reasonable expenses are subtracted from total revenue to calculate taxable income, helping businesses legally reduce their tax liability.

2. List of Reasonable Business Expenses Without Invoices

2.1. Purchases from Non-Business Individuals

• Required documentation: Form 01/TNDN as per Circular 78/2014/TT-BTC.
• Must include seller information, description, value, signature, and payment evidence.

2.2. Salaries and Allowances to Employees

• Common deductible salary-related expenses:
  • Minimum wage according to regional regulations;
  • Lunch allowance: up to VND 730,000/person/month;
  • Uniform allowance: up to VND 5 million/year;
  • Welfare (e.g., weddings, funerals, vacations): up to 1 month of salary/year;
  • Bonuses for outstanding contributions.
• Requirements: Valid labor contracts, social insurance contributions, PIT declarations.

2.3. Business Travel Expenses

• Required documents:
  
  
  • Business trip assignment decision;
  • Detailed expense report (transportation, accommodation, per diem);
  • Payment vouchers (cash receipts, bank transfers).

2.4. Renting Property from Individuals (No Invoice)

• Required documents:
  
  
  • Rental contract;
  • Rental receipts;
  • Payment evidence;
  • PIT withheld and submitted on behalf of the landlord (if > VND 100 million/year).

2.5. Promotions, Discounts, Defective Goods

• Documents required:
  
  
  • Approved and tax-notified promotion program;
  • Reports of defective or damaged goods;
  • Payment documents related to discounts or promotional expenses.

2.6. Depreciation of Fixed Assets (FA)

• Businesses may shorten the depreciation period within the legal range to optimize taxes.
• Example: Machines can be depreciated over 7 years instead of 12.
• No invoice is needed for depreciation, but the method must follow legal guidelines.

3. Conditions and Tax Calculations for Common Non-Invoice Transactions

3.1. Buying From Farmers, Fishermen, or Self-Producing Individuals

• Conditions:
  
  
  • Use Form 01/TNDN;
  • Product must be unprocessed or only minimally processed (e.g., dried, cleaned).
• PIT exemption if:
  
  
  • Sellers reside locally;
  • Have land/water usage rights and directly participate in production.

3.2. Buying Assets or Hiring Services from Non-Business Individuals

• No PIT for asset purchases.
• 10% PIT withholding for service fees (treated as labor income).

3.3. Transactions with Business Households (Revenue ≤ VND 100 Million/Year)

• Tax implications:
  
  
  • No PIT, VAT, or business license tax;
  • Must prepare Form 01/TNDN, contracts, and payment evidence.

3.4. Transactions with Households (Revenue > VND 100 Million/Year)

• Invoice required;
• Applicable PIT:
  
  
  • Services: 2% of revenue;
  • Goods: 0.5% of revenue.

3.5. Temporary Labor or Outsourced Work

• Required: Labor contracts, payment records.
• PIT: 10% withholding as per labor income regulations.

3.6. Renting Assets from Individuals (Vehicles, Real Estate)

• Contracts under VND 100 million/year:
  • Exempt from PIT, VAT, and business license tax.
• Contracts over VND 100 million/year:
  • 5% VAT;
  • 5% PIT;
  • Business license tax depending on revenue level.

4. Important Notes When Claiming Non-Invoice Expenses

• Prepare alternative documents and internal records as per regulations;
• Keep original documents like contracts, Form 01/TNDN, receipts;
• Declare properly during tax finalization;
• Consult professional accountants or tax advisors when needed.

Conclusion

Claiming reasonable expenses without invoices is completely legal if your business complies with the proper documentation and tax rules. Ensure full compliance with Form 01/TNDN, contracts, and payment proofs to minimize risks during tax audits.