Businesses often carry out promotional activities in the form of giving gifts. However, businesses need to pay attention to documents when doing this.

Legal grounds:

• Decree No. 123/2020/ND-CP;
• Circular No. 219/2013/TT-BTC;
• Official Dispatch No. 47499/CTHN-TTHT dated September 29, 2022 of the City Tax Department. Hanoi.

Businesses have the right to use goods as gifts for customers as a measure to promote sales.

However, businesses need to pay attention to documents when sending gifts to customers. Specifically:

Pursuant to Clause 1, Article 4 of Decree No. 123/2020/ND-CP as follows:

Article 4. Principles for creating, managing and using invoices and documents

1. When selling goods or providing services, the seller must issue an invoice to deliver to the buyer (including cases of goods and services used for promotion, advertising, sample goods; goods and services used for to give, donate, exchange, pay on behalf of wages to employees and for internal consumption (except for goods circulated internally to continue the production process); release goods in the form of loans, borrow or return goods) and must fully record the content as prescribed in Article 10 of this Decree. In case of using electronic invoices, it must follow the tax authority’s standard data format as prescribed in Article 12. This Decree.

Pursuant to Clause 1, Article 9 of Decree No. 123/2020/ND-CP as follows:

Article 9. Time of invoice issuance

1. The time of invoicing for sales of goods (including sales of state assets, confiscated assets, restocking of state funds and sales of national reserves) is the time of transfer of ownership or rights to use the goods to the buyer, regardless of whether money has been collected or not.

Pursuant to Clause 3, Article 7 of Circular No. 219/2013/TT-BTC as follows:

Article 7. Taxable price

…

3. For products, goods, and services (including purchased from outside or produced by business establishments) used for exchange, gifts, donations, or payment on behalf of wages, taxable price is the VAT calculation price of the goods and services of the same type or equivalent at the time these activities arise

In addition, Official Dispatch No. 47499/CTHN-TTHT dated September 29, 2022 of the City Tax Department. Hanoi also has the following instructions:

The company must issue invoices for goods and services used to give away to customers. The invoice must fully state the contents as prescribed in Article 10 of Decree No. 123/2020/ND-CP. Taxable prices for goods and services given, donated or presented to the Company comply with the instructions in Clause 3, Article 7 of Circular No. 219/2013/TT-BTC dated December 31, 2013 of the Ministry of Finance.

According to the above regulations, when delivering goods to customers as gifts, please note:

• Businesses issue invoices similar to when selling goods (although giving as a gift does not generate revenue);
• The time of invoice is when ownership of the gift is transferred to the customer;
• Unit price, amount and value-added tax of the gift: Record the same as in the case of sales (don’t record the amount as 0);
• In the name of the goods shown on the invoice, additional details can be written: “(Gift goods without collection of money)” to distinguish them from normal invoices for the sale of goods for which payment is collected.