The input value-added tax (VAT) credit is an important benefit available to enterprises during their business and production activities. However, in order to be eligible for VAT input credit, taxpayers must fully satisfy the conditions stipulated in the Law on Value-Added Tax 2024 (No. 48/2024/QH15) and Government Decree No. 181/2025/ND-CP.

1. Conditions for VAT input credit

According to Clause 2, Article 14 of the Law on VAT 2024, as guided under Section 2, Chapter III of Decree No. 181/2025/ND-CP, enterprises are entitled to VAT input credit if the following conditions are met:

a. Valid invoices or documents evidencing tax payment

- A legitimate VAT invoice for goods or services purchased domestically;

- Or a document evidencing VAT payment at the importation stage;

- In cases where VAT is paid on behalf of a foreign party (e.g., cross-border services), supporting documents evidencing such tax payment must be available in accordance with regulations.

b. Non-cash payment for amounts from VND 5 million or more

- Expenditures of VND 5 million or more (inclusive of VAT) must be paid via bank transfer or other non-cash payment methods;

- Certain exceptions are provided in Clause 2, Article 26 of Decree No. 181/2025/ND-CP (e.g., payment by offsetting, clearing of debts, etc.).

c. For exported goods or services, the following additional documents are required:

- A contract signed with a foreign counterparty (sale, processing, or service supply);

- Sales or service provision invoices;

- Proof of non-cash payment;

- Customs declaration for exported goods (unless exempted by law);

- Packing list, bill of lading, and insurance documents, if applicable.

2. Time limit for VAT declaration and input credit

Pursuant to Point đ, Clause 1, Article 14 of the Law on VAT 2024, input VAT shall be declared and credited in the tax period (monthly or quarterly) in which it arises. Any uncredited input VAT may be carried forward to the following period until it is fully credited.

Accordingly, enterprises must declare taxes in a timely manner during the tax period in which the input expense arises to ensure entitlement to input credit.

3. Important notes

- Enterprises must retain all invoices, contracts, and payment documents to facilitate tax audits by the competent tax authorities;

- Any erroneous invoices must be corrected promptly in accordance with proper procedures;

- Transactions with enterprises exhibiting signs of tax risk should be avoided. Enterprises are advised to verify counterparties on the official portal of the tax authority to avoid disallowed expenses and input VAT credits.

CONCLUSION

The right to input VAT credit is a significant benefit, yet it comes with strict compliance obligations regarding documentation, invoicing, and payment methods. The new regulations under the Law on VAT 2024 and Decree No. 181/2025/ND-CP provide clearer and more detailed conditions and timeframes for VAT input credit, thereby enhancing transparency in tax declaration activities of enterprises.

Anh Tuan

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GATTACA LAW FIRM | Trusted Legal Partner

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