VAT rate The sales invoice serves as a mandatory "guideline" in preparing return invoices for goods according to the latest regulations. Decree 70/2025/ND-CP. Determining the correct tax rate at the time of establishing the original transaction helps businesses avoid administrative penalties in the tax field and ensures consistency in accounting records.
In practice, tax settlements show that many accountants are still confused when faced with situations where goods are sold at the 10% tax rate, but the 8% tax reduction policy is in effect upon return. Understanding the nature of the VAT rate on sales invoices not only helps businesses comply with the law but also optimizes professional tax risk management processes. Let's analyze this issue in detail with MAN – Master Accountant Network.
Legal basis for the VAT rate on sales invoices when goods are returned.
According to Clause 3, Point a, Article 1 of Decree 70/2025/ND-CP, the invoicing process for returned goods has undergone significant changes. Sellers must issue invoices for returned goods, ensuring that all information is fully recorded as per Article 10 of this Decree, in order to adjust revenue and output tax accordingly.
The core issue is the applicable tax rate. The General Department of Taxation consistently maintains the view that returned goods constitute the cancellation of part or all of a completed transaction. Therefore, the VAT rate of the original sales invoice is the same as the rate that must be recorded on the return invoice, regardless of any changes in the current tax rate due to exemption or reduction policies.
If a business issues a 10% invoice in May 2025, then when a customer returns goods in December 2025, the return invoice must still bear the 10% mark. Applying the wrong VAT rate on sales invoices will lead to discrepancies in VAT reporting and make it difficult for tax authorities to reconcile electronic invoice data on their centralized system.
Why should the VAT rate of the sales invoice be applied instead of the current VAT rate?
Using the VAT rate on sales invoices ensures the principle of symmetry. When selling goods, you declare output tax based on the tax rate at that time. When goods are returned, the return invoice aims to "eliminate" the output tax that was incorrectly declared compared to the actual goods remaining in the warehouse.
Consistency in audit records
Auditing bodies always require a match between the amount of tax paid and the amount of tax adjusted downwards. If the VAT rate on the sales invoice is not used as a basis, businesses will create fictitious discrepancies in their accounting records. This causes the business's credibility score to decrease in the eyes of auditing agencies.
Avoid the risk of policy abuse.
If businesses do not comply with the VAT rate on sales invoices, they can exploit the difference in tax rates to illegally reduce their tax obligations. Tax authorities closely monitor this issue through electronic invoice numbers directly linked to original invoices to ensure maximum transparency in the management system.
Compare the VAT rates of actual sales invoices and refund invoices.
Below is a simulation table of the scenario for applying the VAT rate to sales invoices according to Resolution No. 204/2025/QH15 and Decree 70/2025/ND-CP:
| Situation | Original Sale Date | Base tax rate (%) | Delivery time | Current tax rate (%) | Tax refund rate | MAN Expert Notes |
| Scenario 1 | 05/2025 | 10% | 12/2025 | 8% | 10% | According to the VAT rate of the sales invoice |
| Scenario 2 | 02/2025 | 8% | 08/2025 | 10% | 8% | Restore the correct tax status at the time of sale. |
| Scenario 3 | 01/2026 | 10% | 03/2026 | 10% | 10% | No policy changes. |
Therefore, the VAT rate on sales invoices remains constant for return transactions. Adhering strictly to the VAT rate on sales invoices helps accountants confidently explain transactions to tax audit teams, avoiding unnecessary numerical errors.
Guidelines for processing refund invoices correctly.
The process of handling invoices based on the VAT rate of a sales invoice requires strict steps. First, both parties establish a return record clearly stating the reason, quantity, value, and information about the VAT rate of the previous sales invoice to serve as legal basis.
Issuing refund invoices in accordance with Decree 123/2020/ND-CP
When creating an electronic invoice for returned goods, the accountant selects the correct VAT rate as the original sales invoice. The invoice clearly states: "Return of goods according to invoice number… dated…". This helps the General Department of Taxation's system identify the transaction and automatically match data quickly.
Supplementary declaration and adjustment of revenue
Based on the VAT rate of the sales invoice, the seller declares a reduction in output tax, and the buyer declares a corresponding reduction in input tax. Agreement on the VAT rate of the sales invoice between the two parties is a prerequisite for the tax return to be accepted as valid and secure.
Common mistakes when omitting the VAT rate on sales invoices.
MAN has identified numerous errors related to VAT rates on sales invoices. A typical example is accountants arbitrarily applying the current tax rate when returning goods, assuming that the tax rate applicable to the invoice should be used at the time of issuance. This is a harmful misunderstanding of the nature of adjustment invoices for returns.
Another mistake is incorrectly recording the pre-tax value even though the VAT rate on the sales invoice is correct. Accountants need to note that the VAT rate on the sales invoice applies to the actual payment value after deducting the discount on the original invoice, ensuring that the tax amount matches the amount previously paid.
Failure to reconcile the VAT rates on sales invoices with the General Department of Taxation's system (hdon.gdt.gov.vn) makes businesses vulnerable to risk warnings. MAN recommends using accounting software that automatically retrieves the VAT rates of sales invoices to minimize subjective human errors.
The relationship between product returns and VAT reduction.
In the context of Resolution No. 204/2025/QH15, determining the VAT rate on sales invoices has become more sensitive. The "Regulations on Returning Goods in 2026" require meticulous attention to detail in classifying goods as eligible for tax reduction at the time the original transaction occurred.
If the VAT rate for goods was reduced to 8% in May 2025, and that policy expired in December 2025, then when returning the goods in December, you must still use the 8% rate – the VAT rate of the original sales invoice. This ensures accuracy for tax reporting periods.
Experts at MAN consistently emphasize: "The essence of a refund transaction is reversing the transaction." Therefore, all parameters must be a reflection of the old invoice, especially the VAT rate of the sales invoice. This is fundamental knowledge that every chief accountant needs to thoroughly understand.
The role of MAN in advising on VAT rates for sales invoices.
MAN is a leading network of auditing and tax experts. We understand that small details like the VAT rate on sales invoices can cause significant problems during audits. MAN provides comprehensive consulting solutions, handling complex situations related to invoice adjustments.
We support the review of electronic invoicing systems, ensuring strict compliance with Decree 70/2025/ND-CP. MAN's partnership helps businesses operate with peace of mind, while the risks related to VAT rates on sales invoices are tightly controlled by experienced experts.
Conclude
The VAT rate on sales invoices is a key factor in the return of goods under Vietnamese law. Applying the correct VAT rate on sales invoices demonstrates professionalism and transparency in financial management. Don't let errors in tax rates damage your business's reputation with the tax authorities.
If you are having difficulty determining the VAT rate for your sales invoices, please contact MAN – Master Accountant Network. We provide auditing services, tax accounting, tax settlement In-depth expertise. MAN is committed to protecting customer interests through a thorough understanding of VAT rates on sales invoices.
Service contact information at MAN – Master Accountant Network
- Address: No. 19A, Street 43, Tan Thuan Ward, Ho Chi Minh City
- Mobile/Zalo: 0903 963 163 – 0903 428 622
- Email: man@man.net.vn
Content production by: Mr. Le Hoang Tuyen – Founder & CEO MAN – Master Accountant Network, Vietnamese CPA Auditor with over 30 years of experience in Accounting, Auditing and Financial Consulting.
Frequently Asked Questions about VAT Rates on Sales Invoices
You can look up the exact VAT rate for your sales invoice online on the tax authority's electronic invoicing system.
Both parties draw up a record of goods retrieval. The seller issues a refund invoice with the VAT rate of the original sales invoice to adjust the tax according to regulations.
There are no exceptions. Compliance with the VAT rate on sales invoices is mandatory to ensure budget balance and accounting records. How can I determine the VAT rate on a sales invoice if I've lost the hard copy?
What should be done if the buyer is an individual and doesn't have an invoice?
Are there any exceptions to the VAT rate for sales invoices?
