Deducting Purchases from Individuals and Household Businesses Without Invoices: Documents Required Under Decree 320/2025 and Circular 20/2026 (Letter 5263/GLA-QLDN2)

Download the full text of Official Letter No. 5263/GLA-QLDN2 dated 7 October 2026 of the Gia Lai Provincial Tax Department here (PDF, Vietnamese).

Companies that buy goods or services from individuals or small household businesses keep running into the same question: if the seller cannot issue an invoice, is the cost still deductible for corporate income tax (CIT), and what documents does the company need to keep?

On 7 October 2026, the Gia Lai Provincial Tax Department issued Official Letter No. 5263/GLA-QLDN2 answering exactly this question for Se San 3A Power Investment and Development JSC, applying the new framework of Decree 320/2025/ND-CP and Circular 20/2026/TT-BTC.

Key points at a glance

1. The three general conditions for a deductible expense

Under Article 9.1 of Decree No. 320/2025/ND-CP dated 15 December 2025, apart from the non-deductible items in Article 10, an expense is deductible when determining taxable income if it meets all three conditions:

1. It is actually incurred and relates to the company’s business, including the additional deduction for research and development costs.
2. It is supported by proper invoices and vouchers as required by law.
3. It has non-cash payment evidence for purchases of goods and services and other payments of VND 5 million or more per transaction.

The second condition is the stumbling block when the seller is an individual or a small household business without invoices. Decree 320/2025/ND-CP deals with this through a specific documentation route, set out in section 2.

2. Documents for purchases from individuals and household businesses below the VAT threshold

Article 9.1(b) of Decree 320/2025/ND-CP and Article 3.13(a) of Circular No. 20/2026/TT-BTC dated 12 March 2026 require:

• A payment voucher to the seller in line with accounting, invoice and voucher rules.
• Non-cash payment where purchases from each household or individual in a single day reach VND 5 million or more.
• A purchase listing on Form No. 02/TNDN issued with Circular 20/2026/TT-BTC, signed by the company’s legal representative or an authorised person, who is responsible for it.

The Gia Lai Tax Department’s conclusion: where a purchase from an individual or household business with revenue below the VAT threshold meets Article 9.1 and does not fall under Article 10 of Decree 320/2025/ND-CP, the documents required for it to be deductible are those in Article 3.13(a) of Circular 20/2026/TT-BTC.

3. Other purchases using the same listing route

The same payment voucher and listing route under Article 9.1(b) of Decree 320/2025/ND-CP applies to:

• Agricultural, forestry and fishery products bought directly from the producer or fisher;
• Handicrafts made of jute, sedge, bamboo, leaves, rattan, straw, coconut husk or shell, or agricultural by-products, bought directly from the craftsperson;
• Scrap bought from the person who collected it;
• Household goods and assets bought directly from households or individuals;
• Other goods and services bought from individuals or household businesses with revenue below the VAT threshold.

4. Practical points for companies

The VND 5 million threshold is per day, per seller. The text refers to “the value of goods and services purchased in a day from each household or individual”. Splitting cash payments to the same seller within one day does not avoid the non-cash payment requirement.

This route is only for sellers below the threshold. If the individual or household business has revenue at or above the VAT threshold, the purchase should in principle be supported by an invoice; the listing does not replace an invoice in that case. Keep evidence that the seller is below the threshold, such as a written confirmation or the household business registration details.

Use the right form and the right signatory. Use Form No. 02/TNDN under Circular 20/2026/TT-BTC, not older forms. It must be signed by the legal representative or an authorised person; FDI companies whose foreign General Director is often abroad should put a clear written authorisation in place.

The Article 10 filter still applies. Complete documents are not enough on their own: the expense must still relate to the business and must not be one of the non-deductible items in Article 10 of Decree 320/2025/ND-CP.

Other obligations when paying individuals. When paying individuals for services, also consider personal income tax withholding obligations; this falls outside the scope of the letter.

5. Documentation checklist

• Contract or purchase agreement (if any) showing the expense relates to the business.
• Payment voucher to the seller in line with accounting rules.
• Bank payment evidence where purchases from that seller in a day total VND 5 million or more.
• Form 02/TNDN purchase listing signed by the legal representative or an authorised person.
• Written authorisation to sign the listing, if the signatory is not the legal representative.
• Evidence that the seller is below the VAT threshold.

TrustlineAX helps FDI companies review expense documentation, set up procedures for purchases from individuals and household businesses, and prepare CIT finalisation. Contact TrustlineAX for advice.

Disclaimer

This article is based on Official Letter No. 5263/GLA-QLDN2 dated 7 October 2026 of the Gia Lai Provincial Tax Department and the regulations it cites:

• Article 9.1 and Article 10 of Decree No. 320/2025/ND-CP dated 15 December 2025;
• Article 3.13(a) of Circular No. 20/2026/TT-BTC dated 12 March 2026 of the Ministry of Finance (Form No. 02/TNDN).

Scope notes:

1. The letter answers a specific taxpayer. It is guidance, not a legal normative document.
2. This article does not state the VAT registration threshold amount; check the VAT rules in force when the transaction takes place.
3. The list of non-deductible expenses in Article 10 of Decree 320/2025/ND-CP is not analysed in detail here.

This article is for reference only. It does not replace the original legal texts and does not constitute advice for any specific case. Please check the rules in force at the time of application and consult a professional adviser before making decisions.

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