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Do companies have to issue invoices to goods for giving, donation and present purposes

Sat, 04 Mar 2017 21:46:23 PM GMT + 7    Print   Email   Share:

(Chinhphu.vn) – In case companies use products produced themselves for presentation of gifts and donations for their employees, these shall not be called internal consumptions and companies must issue invoice as prescribed.

Tax Department of Binh Duong Province guides Vietnam DKSH Co., Ltd (Binh Duong Province) on invoices toward goods for presentation of gifts and donations as follows:


Inventory turnover between branches can use a delivery orders

Point 2.6 of Annex 4 of Circular No. 39/2014 / TT-BTC dated 31/03/2014 of the Ministry of Finance regulated:

 “2.6. Business organizations declare and pay VAT by deduction method of transfer and merchandise warehousing to dependent accounting establishments such as branches, shops in other localities (provinces, cities directly under the central government) to sale or transfer and merchandise delivery between branches, dependent units together; merchandise delivery for establishments to act as agents in order to sell at the prices, commissions, based on the mode of business organization and accounting , the establishments can choose one of two ways using invoices and vouchers as follows:

a) Use VAT invoices for payment, declare and pay VAT in each unit and each independent stage to each other;

b) “Use a delivery order  accompanied by internal transfer order; use delivery order toward sale consignment in agents as prescribed for merchandise delivery to the agents (establishments) with an internal transfer order

Based on the above provisions, the case of branches of a company that are dependent and in different provinces with the company,  in case there have incurred inventory turnover between the branches, they can use the delivery order  accompanied by internal transfer order together or use VAT invoices when implementation of inventery turnover

With targets and content on invoices, companies shall perform as prescribed at Point b, Clause 2, Article 16 of Circular No. 39/2014 / TT-BTC dated 03/31/2014 of the Ministry of Finance.

Issue invoice for presentation as gifts and donation cases

Clause 7, Article 3 of Circular No. 26/2015 / TT-BTC dated 27/02/2015 of the Ministry of Finance regulations:

 “b) Sellers must issue invoices when they sell goods and services, include goods and services cases used for promotions, advertisement, samples; goods and services are used for barter, presentation as gifts, donation or payment of salaries for employees (except for goods transferred internally, internal consumption to continue the process of production) ... ".

Pursuant to Clause 3.5 of Article 7 of Circular No. 219/2013 / TT-BTC of the Ministry of Finance 31/12/2013 guidance on VAT:

 “3.For products, goods and services (including those purchased from outside or produced by business establishments themselves) which are used for barter, presentation as gifts, donation or payment of salaries, the taxed price is that of goods or services of the same or similar type at the time of carrying out such activity.

5. For products, goods and services used for sales promotion in accordance with the commercial law, the taxed price is zero (0). For goods and services used for sales promotion in contravention with the commercial law, VAT declaration, calculation and payment are the same as those for goods and services used for internal consumption, presentation as gifts or donation…”.

At Clause 2.30 of Article 4 of Circular No. 96/2015 / TT-BTC dated 22/06/2015 of the Ministry of Finance amending and supplementing Article 6 of Circular No. 78/2014 / TT-BTC regulates:

 “2.30. Expenses not corresponding to taxed turnover, excluding:

- Direct expenses on the workers’ welfare: expenses for funerals and weddings of workers and their relatives; expenses on summer holidays or medical treatment support; expenses for refresher training at training institutions; expenses for supporting employees’ families affected by natural disasters, enemy sabotage, accidents and illness; expenses for rewarding workers’ children for their study achievements; expenses for supporting workers’ traveling during holidays; payment for accident insurance, health insurance, and other voluntary insurance for workers (except life insurance mentioned at Point 2.6, and voluntary pension insurance mentioned at Point 2.11, of this Article), and other welfare expenses. The total welfare expenses must not exceed the average actually implemented one month’s wage in the tax year of the enterprise.

Based on the above provisions, the case of companies which use products produced themselves for presentation as gifts and donation to their employees shall not be called as internal consumptioncompanies must issue invoices in accordance with the provisions

In order to implementation of accounting expenses, companies must meet the conditions specified in Article 4 of Circular No. 96/2015 / TT-BTC dated 06/22/2015 of the Ministry of Finance

Whether companies have promotion programs and presentation of goods as gifts or donation to customers with free of charge, if companies comply with the provisions of Article 15, Section 3 of Decree No. 37/2006 / ND-CP dated 4/4 / 2006 of the Government, companies shall issue invoices, the taxable value is determined to zero (0), and companies are allowed to put into deductible expenses for calculation of corporate income tax.

In case companies have promotion programs and presentation of goods as gifts or donation to customers with free of charge, if companies does not comply with the provisions of Article 15, Section 3 of Decree No. 37/2006 / ND-CP dated 4/4 / 2006 of the Government, they must issues VAT invoices, calculation of VAT and tax declaration and payment according to regulations.

  • By : Thanh Thủy/Online Newspaper of the Government / Translator: HaiYen-Bizic

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