Interest on bank deposits is an income for businesses, so whether or not to issue an invoice for the interest to record revenue is a problem for many businesses.

This article was consulted by Lawyer Nguyen Quang Trung

Legal grounds:

• Decree No. 123/2020/ND-CP;
• Official Dispatch No. 4085/TCT-DNL dated September 11, 2017 of the General Department of Taxation;
• Official Dispatch No. 3642/CTBDI–TTHT dated October 7, 2024 of the Binh Dinh Provincial Tax Department.

Currently, many businesses are facing difficulties with interest received from bank deposits.

Specifically: according to accounting regulations, interest is recorded in the financial revenue of the business. However, according to Clause 1, Article 4 of Decree No. 123/2020/ND-CP, enterprises must issue invoices when selling goods and providing services. While interest on deposits is not a revenue from selling goods and providing services, there are still many conflicting views on whether enterprises must issue invoices for interest on deposits or not.

On September 11, 2017, Binh Dinh Provincial Tax Department issued Official Dispatch No. 3642/CTBDI-TTHT dated October 7, 2024 with the following instructions:

Interest on bank deposits is determined as other financial income. When receiving interest on bank deposits, the enterprise is allowed to issue a receipt and does not have to issue an invoice.

In case the enterprise has interest on bank deposits, it is determined as other financial income. The enterprise does not have to allocate deductible input tax for deposit activities at the Bank

Thus, according to the above instructions:

• The enterprise does not have to issue invoices for bank deposit interest;
• The enterprise does not have to allocate deductible input VAT for deposit activities at the Bank.