Official Letter No. 2921/CTCMA-TTHT Regarding Invoice Issuance for Gifts

GENERAL DEPARTMENT OF TAXATION CA MAU PROVINCIAL TAX DEPARTMENT No: 2921/CTCMA-TTHT Regarding Invoice Issuance for Gifts

SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom - Happiness Ca Mau, December 27, 2024

 

To:	Ca Mau Seafood Processing and Service Joint Stock Company Address: No. 04 Nguyen Cong Tru, Ward 8, Ca Mau City.

Replying to Official Letter No. 352/CV.Cty dated December 20, 2024, from Ca Mau Seafood Processing and Service Joint Stock Company regarding the issuance of invoices for gifts purchased from post-tax profits and not subject to input VAT deduction, and not included as an expense for corporate income tax (CIT) calculation, Cà Mau Provincial Tax Department has the following response:

• Based on Clause 1, Article 4 of Decree No. 123/2020/ND-CP dated October 19, 2020, by the Government, which regulates the issuance of invoices and documents:

“1. When selling goods or providing services, the seller must issue invoices to the buyer (including cases where goods or services are used for promotion, advertising, samples; goods or services used for giving, gifting, exchanging, paying wages to employees, and internal consumption (excluding goods transferred internally for the continuation of the production process); goods issued under the form of loans, borrowings, or returns), and must fully record the content as stipulated in Article 10 of this Decree. In case of using electronic invoices, it must follow the data format set by the tax authority as stipulated in Article 12 of this Decree...”

• Based on Clause 1, Article 14 of Circular No. 219/2013/TT-BTC, which guides the implementation of the VAT Law and Decree No. 209/2013/ND-CP dated December 18, 2013, by the Government:

“1. Input VAT on goods and services used for the production and business of VAT-taxable goods and services is fully deductible, including input VAT on goods that are subject to VAT but lost.”

• Based on Clause 5, Article 14 of Circular 219/2013/TT-BTC, which stipulates:

“5. Input VAT on goods (including those purchased externally or self-manufactured by the enterprise) that the enterprise uses for gifts, promotions, advertising, and for producing business goods and services subject to VAT is deductible.”

Based on the above regulations:

• In the case where Cà Mau Seafood Processing and Service Joint Stock Company purchases goods for business purposes, and then uses part of these goods to give gifts to its employees during holidays, funded from post-tax profits, the company is allowed to declare and deduct VAT as prescribed and must issue invoices and pay VAT as if selling goods to customers.

• In the case where the company uses post-tax profits to purchase goods for giving gifts to customers or employees during holidays, which does not serve business activities, the VAT on input goods cannot be deducted, it is not accounted as an expense for CIT calculation, and the company is not required to issue invoices for the gifts.

Ca Mau Provincial Tax Department responds so that Cà Mau Seafood Processing and Service Joint Stock Company understands and implements the regulations accordingly.

Recipients: As above; Leadership of the Department; KK, NVDTPC, TTKT1, TTKT2; Website; Archive: VT, TTHT(2b).

On behalf of the Director-General, Deputy Director-General       Nguyen Van Be

See details here.