Deduction of input VAT under Decree 181/2025/NĐ-CP: What are the considerations for enterprises?

Input value-added tax (VAT) deduction is a legitimate right that helps enterprises reduce tax costs, optimize product pricing, and improve profitability. However, in practice, rejected expenses, reversal period of back taxes, and administrative penalties have taken its toll on a large number of enterprises due to a lack of understanding about VAT deduction regulations, especially the requirements for invoices, tax payment documents, and non-cash payment methods. Decree 181/2025/NĐ-CP, along with Decree 52/2024/NĐ-CP, provides clear but strict regulations that require enterprises to have an in-depth understanding to apply correctly and avoid unnecessary risks.

1. Invoices and Tax Payment Documents – fundamental requirements

To be eligible for input VAT deduction, enterprises must have valid VAT invoices or tax VAT payment documents at the importation stage. Although this is a basic requirement, many enterprises still fall into errors including invoices lacking required information, incorrect tax codes, or mismatches between tax payment documents and customs declarations. In particular, in cases where VAT is paid on behalf of a foreign party, such payment documents are also accepted as valid grounds for deduction under the regulations.

It is essential for enterprises to build a systematic process to fully store and reconcile invoices and tax payment documents as soon as they arise, while ensuring all records are properly stored for legal compliance during tax audits. Invalid invoices or missing documents will result in denied deductions, reversal period of back taxes, and violation fines.

2. Non-Cash Payment– strict regulations, broad scope

According to regulations, any expense of VND 5 million or more (including VAT) must be paid via non-cash methods to be eligible for VAT deduction. Decree No. 52/2024/NĐ-CP defines non-cash payment methods to include: cheques, payment orders, payment authorizations, collection orders, collection authorizations, bank cards (including debit cards, credit cards, and prepaid cards), e-wallets, and other payment instruments under the regulations of State Bank of Vietnam. Enterprises may process payments through banks or legally authorized payment intermediaries. However, direct cash deposits into the seller’s account are not considered non-cash payments, except for specific cases under the VAT Law. Accounting departments of enterprises must verify payment documents before recording input VAT deductions, ensuring the correct non-cash payment method is used. Failure to comply with non-cash payment requirements will result in rejected VAT deductions, higher cost prices, reversal period of back taxes with penalties.

3. Offsetting payment – calls for clear and comprehensive dossiers

The law allows debt clearing as a method of payment; however, enterprises are required to establish a debt reconciliation minute clearly stating the offsetting value between the purchase and sale of goods or services. If the offsetting involves a third party, a tripartite confirmation document signed by all parties is mandatory. In cases where the clearing is made using borrowed funds, a loan agreement must be established in advance accompanied by proof of bank transfer. When executing offsetting payments, enterprises must maintain complete documentation, including debt reconciliation minutes, loan agreements, and payment documents, carefully storing these files to prove the transaction during tax finalization or audits.

4. Third-Party Payments – must be clearly specified in the contract

Enterprises may make payments through a third party, either at the seller’s request or via authorized payment. However, the law requires that this payment method be explicitly specified in the contract, and the third party must be a legally recognized entity or individual under applicable regulations. If these terms are absent from the contract, or if the third party does not meet legal qualifications, the transaction will not be eligible for input VAT deduction. When paying via a third party, enterprises must clearly define the payment method in the contract, verify the third party’s legal status, and store full document of the fund transfer.

5. Payments using shares or bonds – new regulation requires caution

International transport operations have unique characteristics: the contract for carriage of goods, passengers or baggage serves as the legal basis for applying the 0% tax rate. For passengers, air tickets or train tickets constitute the transport contract. However, when customers are individuals, the law permits direct cash payments instead of requiring non-cash payments. This flexibility can be confusing, particularly for new accountants, and failure to comply strictly with regulations may lead to incorrect tax declarations, tax recovery demands, or denial of input VAT deductions.

6. Aviation Services – When Service Requests Substitute for Contracts

In the aviation industry, businesses do not always maintain long-term service contracts. For non-recurring services such as landing/take-off operations, aircraft pushback/towing, and ground handling, transactions are often based solely on service requests from foreign airlines. While tax regulations permit the use of service requests instead of formal contracts, businesses must still provide non-cash payment documentation to qualify for the 0% tax rate. For aircraft maintenance services specifically, aircraft brought into Vietnam must complete temporary import for re-export procedures to be eligible for the 0% rate. This frequently overlooked requirement poses significant tax risks and can directly impact project profitability.

7. Maritime Services – Caution Required for Temporary Import/Re-export Procedures in Ship Repairs 

Similar to the aviation sector, maritime services such as ship towing, pilotage, cargo handling, and rescue operations are eligible for the 0% VAT rate, provided there is either a contract or a service request from a foreign organization or shipping agent, accompanied by valid non-cash payment documentation. In particular, where enterprises provide ship repair services, the vessel must undergo temporary import for re-export procedures. Failure to comply with this requirement will not only disqualify the enterprise from applying the 0% VAT rate but will also subject the service to the standard 10% rate – substantially increasing costs, reducing profit margins, and undermining international competitiveness.

4. Compliance Solutions and VAT Optimization for Export Enterprises

Article 18 of Decree No.181/2025/ND-CP serves not merely as procedural guidance for VAT compliance, but as a legal safeguard protecting legitimate businesses. A proper understanding, full compliance, and the maintenance of valid documentation enable businesses to avoid retrospective tax assessments, preserve their entitlement to VAT refunds, and maintain credibility with global partners. To ensure compliance and mitigate tax risks, each enterprise should establish an internal control process specifically for 0% VAT documentation, provide regular training for tax accounting personnel and seek consultation from VAT attorneys or tax experts—especially in complex business sectors such as logistics, international transportation, maritime and aviation services, and technology-related exported services.

Time of writing: 03/07/2025

The article contains general information which is of reference value, in case you want to receive legal opinions on issues you need clarification on, please get in touch with our Lawyer  at  info@cdlaf.vn

You can refer for more information:

• • • • 0% VAT Rate under Decree No. 181/2025: What Conditions Must Enterprises Satisfy?

      • Importing Cybersecurity Equipment: Mandatory Regulations and Risk Avoidance Strategies
      • Authority Distribution in Joint Stock Companies: Who Truly Holds Executive and Decision-Making Power?
      • Establishing a Company in an Export Processing Zone: Legal Framework, Incentives, and Obligations for Foreign Investors