Enterprises are allowed to release goods as gifts to customers without collecting money, and must issue invoices in accordance with the law.

Legal grounds:

• Circular No. 219/2013/TT-BTC;
• Official Dispatch No. 3937/TCT-DNL of the General Department of Taxation dated November 1, 2011.

According to legal regulations, businesses must still issue invoices for donated goods without collecting money from customers even though the donation activity does not generate revenue.

In addition, the content of the invoice for the delivery of donated goods must have all the same information as the invoice for the sale of regular goods: unit price, amount and value added tax, etc. So how is the value added tax amount of donated goods handled?

Pursuant to Clause 5, Article 14 of Circular No. 219/2013/TT-BTC as follows:

Article 14. Principles of input value added tax deduction

5. Input VAT on goods (including goods purchased from outside or goods produced by the enterprise) that the enterprise uses to give away, donate, promote, and advertise in various forms and services serving to production and trading of goods and services subject to VAT is deductible.

In addition, Official Dispatch No. 3937/TCT-DNL of the General Department of Taxation dated November 1, 2011 has the following instructions:

If the company pays VAT using the deduction method, the output VAT payable on goods given given away or given to customers related to production and business activities will not be included in eligible expenses for calculating income that subject to corporate income tax

So according to the above regulations:

• Input VAT on donated goods is deductible;
• Output VAT on donated goods is not included in corporate income tax expenses, but must be fully declared corresponding to the amount of input VAT deducted.