On March 31st, 2020, Hanoi Tax Department issued Official Letter No. 1366/CT-TTHT. Whereby:
In case the company has fully paid the seller in cash for goods purchases that require bank transfer (non-cash payment), has summarized and declared VAT and Corporate Income Tax (CIT), before the tax agency announces the tax examination decision at the company’s headquarters, the company remade the payment through bank transfer with the seller and regain the initial payment also through bank transfer.
For completed transactions in 2017, 2018, 2019, if the company made a transaction with the seller via bank transfer and the seller repay the same amount of money, this will not be considered as a payment for selling transactions in 2017 and 2018. Therefore, the company must not deduct input VAT and also not include this into deductible expenses when determining taxable CIT of purchased goods which are subjected to pay via bank but practically paid in cash.
