Can Businesses Deduct Expenses for Purchases Without Invoices?

According to Article 6 of Circular No. 78/2014/TT-BTC as amended by Article 4 of Circular No. 96/2015/TT-BTC, the determination of deductible and non-deductible expenses when calculating taxable income includes:

"Article 6. Deductible and Non-deductible Expenses When Determining Taxable Income

1. Except for expenses not deductible as stated in Clause 2 of this Article, businesses may deduct all expenses if they meet the following conditions: 

...

2. Non-deductible expenses when determining taxable income include:

...

2.4. Expenses incurred by businesses for purchasing goods or services (without invoices, but allowed to create a purchase ledger according to Form No. 01/TNDN attached to Circular No. 78/2014/TT-BTC) without creating a ledger accompanying payment documents to the sellers or service providers in the following cases:

• Purchasing agricultural, forestry, and aquatic products directly from producers for resale;

• Purchasing handmade products made from bamboo, rattan, bamboo shoots, reeds, leaves, vines, straw, coconut shells, or raw materials utilized from agricultural products of handicraft producers not directly engaged in sales;

• Purchasing land, stones, sand, and gravel directly from households, individuals exploiting them for direct sale;

• Purchasing scrap materials directly collected by individuals;

• Purchasing assets, and services from households, individuals not directly engaged in sales;

• Purchasing goods, services from individual, household businesses (excluding the cases mentioned above) with revenue below the threshold for value-added tax (100 million VND/year)..." 

Therefore, businesses purchasing goods without invoices can still be considered reasonable expenses if they meet the following conditions:

Firstly, purchasing goods or services in the following cases:

• Purchasing goods from individuals engaged in direct extraction, production, or catching for resale.

• Purchasing assets, services from households, individuals not directly engaged in sales.

• Purchasing goods, services from individual, household businesses with revenue below the threshold for value-added tax (100 million VND/year).

Secondly, creating a purchase ledger according to Form No. 01/TNDN attached to Circular No. 78/2014/TT-BTC.

Thirdly, having complete documentation including:

• Purchase contracts.

• Payment documents: payment request forms, payment vouchers (if paid in cash), or debit notes (if paid through banks).

• Goods delivery notes.

Note:

• The purchase ledger must be signed and legally represented by the company's legal representative or the authorized person of the enterprise and be responsible for accuracy and honesty before the law.

• These expenses do not necessarily require non-cash payment documents.

In case the purchase price of goods, services on the ledger is higher than the market price at the time of purchase, the tax authority will rely on the market price at the time of purchase for similar or identical goods, services in the market to determine the adjusted deductible expenses when calculating taxable income.

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