
Legal situation: In the course of business transactions with customers, our company sometimes receives excess payments transferred to our bank account, which the customers do not request to be refunded. In other cases, we receive certain amounts from customers without any corresponding transaction for goods or services. I would like to ask whether VAT invoices are required to be issued for these amounts, and if so, what VAT rate should be applied? Sincerely thank you!
Answer:
According to Clause 1, Article 4 of Decree No.123/2020/NĐ-CP as amended and supplemented by Decree No. 70/2025/NĐ-CP, the provisions are as follows:
“Article 4. Principles of making, managing, and using invoices and documents"
1. When selling goods or providing services, the seller must issue and send invoices to buyers (including goods/services used for sales promotion, advertising or as samples; goods/services gifted, donated, exchanged or used as salary payment to employees and for internal use (except goods which are internally circulated during production process); goods rented, lent or returned), and in the cases of invoicing prescribed in Article 19 hereof. Each invoice must contain adequate information as prescribed in Article 10 hereof. In case of e-invoices, they must be issued in the standard data format regulated by tax authorities as prescribed in Article 12 hereof.”
Article 2 of Circular No. 219/2013/TT-BTC stipulates the subjects liable to value-added tax (VAT) as follows:
“Article 2. Taxable goods and services
Goods and services subject to VAT (hereinafter referred to as taxable goods and services) are those used for production, trading, and consumption in Vietnam (including those purchased from overseas organizations and individuals), except for the goods and services in Article 4 of this Circular.”
Clause 1, Article 5 of Circular No. 219/2013/TT-BTC dated December 31, 2013, stipulates the cases not subject to VAT declaration and payment as follows
“Article 5. Cases of exemption declaring and paying VAT
1. An organization or individual receives a monetary compensation (including compensation for land and property on land that is withdrawn by a competent authority), bonus, allowance, or payment for transfer of emission permit, or other revenues.”
Any taxpayer that receives a monetary compensation, bonus, allowance, payment for transfer of emission permits, or other revenues must make a receipt for such revenues. The taxpayer shall make receipts for spending according to the spending purposes.
If compensation is provided in the form of goods/services, the provider of compensation must issue an invoice, declare and pay VAT as if such goods/services are sold; the recipient of compensation shall declare and deduct tax as prescribed.
Any taxpayer that receives money from another entity to provide a service such as repair, warranty, sales promotion, or advertising must declare and pay tax as prescribed.”
Based on the above-mentioned regulations, in cases where a customer returns an excess amount that is not used for the payment of goods or services between the Company and the customer, and such case is not covered under Clause 1, Article 4 of Decree No. 123/2020/NĐ-CP, the Company is not required to issue a VAT invoice but only needs to prepare a collection receipt in accordance with regulations.
According to Hoang Thuy Quynh - FDVN Law Firm

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