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How to account for Tet gift expenses for customers: issue proper invoices, deduct VAT, and avoid expense disallowance.

Ha Phuong

Quy định hạch toán chi phí tặng quà Tết cho khách hàng

During the Lunar New Year holiday, many businesses allocate large budgets for customer gifts, but they often encounter three familiar obstacles: Issuing invoices that are not genuine., Inconsistent VAT processing and The documentation is insufficient to be eligible for tax deductions when settling corporate income tax.. 

This article helps CFOs and the finance team. Properly categorize the cost of Tet gifts for customers.Standardize the process from budgeting – approval – purchase/receipt/gratification – invoicing – payment, with accompanying guidelines. Accounting for Tet gift expenses for customers according to each situation and an “audit-ready” checklist. The article also shows how Bizzi supports the automation of invoice control, budgeting, and document reconciliation to reduce risk at its source.

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What are the costs of Tet gifts for customers? How does this compare to the costs of promotions, entertainment, and employee benefits?

Cost of Tet gifts for customers This refers to the expenses businesses use to purchase or give gifts to show appreciation, maintain relationships, or stimulate sales for customers during the Lunar New Year. The key point isn't the name, but the substance. business natureBecause each type of cost entails a different way of handling it. Invoice – VAT – Corporate Income Tax – Documents different.

If classified according to principle substance over formTet gifts can fall under the categories of giving/showing appreciation (donating, gifting), legitimate commercial promotions, free gifts included with sales, or sponsorship for partners. The same gift box, if it's a registered promotional program, will have completely different invoice issuance and VAT processing compared to a simple gift.

In terms of form, Tet gifts can be physical goods, services, vouchers/e-vouchers, or even cashback. In terms of recipients, it's necessary to distinguish between corporate and individual customers, as the handover procedures and tax risks (especially in specific situations) are not the same.

In reality, many mistakes happen because of businesses. jump straight into the accounting entries. without agreeing on a classification framework from the outset. An effective approach is to construct a mandatory classification system in four dimensions: Nature of the gift → Invoice obligation → Output VAT → Input VAT deduction right → Minimum documentation → Commonly used accounting accountsUsing the correct source code significantly reduces the risk of expenses being disallowed during the final accounting process.

In terms of operation, Bizzi allows Finance to set it up. Campaign/Cost Center “Tet Gifts for Customers 20XX”Implement classification rules (gifts, promotions, complimentary items) right from the moment the expenditure request is generated. All subsequent documents are tagged with a campaign code, ensuring consistent record retrieval until the end of the period.

Tet holiday expenses for customers
Using the correct source code significantly reduces the risk of expenses being disallowed during the final accounting process.

Once the nature of the expense has been correctly categorized, the next question that CFOs always ask is: is this expense deductible when calculating corporate income tax?

Are the expenses for Tet gifts given to customers deductible when calculating corporate income tax?

In principle, the cost of giving Tet gifts to customers is included in the calculation. deductible expensesIf the invoice is for business purposes, it must have a valid invoice and supporting documents and meet the payment conditions. For invoices of 20 million VND or more, businesses are required to have non-cash payment documents.

In reality, meeting the "deductible" conditions isn't difficult, but it's easy to overlook them during the peak year-end season. Expenses need to clearly demonstrate a connection to business operations (e.g., customer appreciation programs, target customer lists), invoices must be valid from active suppliers, payments must be made according to regulations, and there must be documentation of the handover/receipt of gifts in batches or as part of a program.

From a CFO's perspective, spending on Tet gifts is not just a compliance issue, but also a matter of "real money." When expenses qualify, businesses benefit from a tax shield equal to the deductible expense multiplied by the corporate income tax rate. Conversely, if there is a risk of the expense being disallowed, the risk-adjusted cost will increase significantly due to additional taxes, penalties, and late payment fees.

Bizzi helps control this issue by automatically assigning an Eligible/Not eligible for CIT deduction status to each invoice based on the documentation checklist. Invoices over 20 million VND lacking transfer documentation will be "Hold" immediately in the system, instead of only being detected during settlement.

Meeting the corporate income tax requirements is only half the story. The most likely penalty lies in the obligation to issue invoices when giving gifts.

Do I need to issue an invoice when giving Tet gifts to customers?

When businesses provide goods or services as gifts, donations, or promotions, they are still required to issue electronic invoices in accordance with regulations. The difference lies in whether the Tet gift constitutes a legitimate promotional activity in accordance with commercial law.

For Tet gifts that are essentially presents/gifts of appreciation, businesses issue invoices as with regular sales, and output VAT is usually generated according to the tax rate of the goods. For legally compliant promotions, invoices must still be issued, but the promotional items can be recorded at a unit price of 0 if all program documentation is complete.

A common mistake is recording a unit price of 0 for gifts that are not promotional items, leading to the risk of VAT arrears. A safer approach is to build a decision tree: whether the program qualifies as a legitimate promotion → how to invoice and handle VAT accordingly.

Bizzi helps standardize by creating metadata templates for each program type. When the Bizzi Bot detects a description of "gift" but with a unit price of 0, the system will alert the Finance department to review it before declaration.

Issuing the correct invoices isn't enough. The next issue is handling the input and output VAT for Tet gifts.

When businesses provide goods or services as gifts, donations, or promotional items, they are still required to issue electronic invoices in accordance with regulations.

Are Tet gifts given to customers subject to output VAT?

Input VAT on Tet gifts can be deductible if it serves business production activities and is supported by sufficient documentation. However, when gift/donationBusinesses often have to calculate output VAT, with taxable price It is the price of similar or equivalent goods or services at the time of occurrence.

Major risks arise when The purchase price is significantly different from the market price.Without proper documentation, a business may face tax assessments. A "price variance defense pack" including market quotes, framework agreements, discount programs, or marketplace data can significantly reduce this risk.

Bizzi assists by comparing the purchase price on the invoice with internal benchmarks. When the difference exceeds a threshold, the system requests additional documentation before finalizing the VAT declaration.

Once corporate income tax and VAT have been properly handled, the challenge shifts to managing the entire operational process.

Playbook controls the cost of Lunar New Year gifts for customers, from budget to payment.

Effective control Cost of Tet gifts for customers It can't just stop at accounting. A standard playbook needs to follow this sequence: Budget → Expenditure Request → Approval → Purchase Order → Grand Prize → Invoice → Payment → Reconciliation.

In practice, "break points" often occur in off-list purchases, missing purchase orders/clearance items, or payments made before reconciliation. CFOs should monitor metrics such as: Budget Utilization %, 3-way match rate %, Eligible expense rate % To detect risks early.

Bizzi acts as the "data backbone": Bizzi Expense controls budgets and approves expenditures; Bizzi Bot automatically extracts and reconciles invoices; Bizzi AR/AP only allows payment when the invoice has been processed and exceptions have been resolved.

How can we control the budget for Tet gifts for customers by department?

A common mistake is just total budget at the company levelMeanwhile, expenses are incurred in Sales, Marketing, Branches, etc. This leaves the CFO only realizing they've "run out of budget" when it's already too late. Effective control needs to take place. before spending, not when reporting.

1. Design a budget using a cost center approach.

The budget for Tet gifts should be divided as follows:

This helps to clarify the answer: How much is each department spending on Tet gifts?.

2. Apply control thresholds (hard cap & soft cap)

Effective method:

Instead of banning spending entirely, soft cap + higher approval level This helps to provide both flexibility and risk control.

3. Monitor budget KPIs in real time.

A CFO should be able to see:

Bizzi Expense Display real-time budget dashboards by department/campaign, no need to wait until the end of the month.

Effectively controlling the cost of Tet gifts for customers cannot be limited to just accounting.

How to avoid risky invoices from Tet gift suppliers?

Tet gifts are a "peak season" for risky invoices, especially for new or small-scale suppliers.

1. Common signs of a risky invoice

These are all red flags during tax settlement.

2. Supplier Control Checklist

Businesses should check:

Bizzi Bot automatically scores supplier risk based on invoice data and transaction behavior, helping Finance to "filter" from the start.

When is it necessary to compare the Purchase Order, Gross Price, and Invoice for large quantities of Tet gifts?

With large-scale Lunar New Year gift programs, simply looking at the invoice isn't enough. The biggest risk lies in the discrepancy between the order placed, the received goods, and the invoice.

1. When is 3-way matching mandatory?

The PO–GR–Invoice reconciliation should be applied when:

2. Common types of misalignment

Without proper reconciliation, the risk of fraudulent payments or incorrect expense recording is very high.

3. Key metrics CFOs should monitor

Bizzi automatically matches the Purchase Order–Gr–Invoice, creates an exception case, and blocks payment until it's processed, instead of "detecting the issue after the money has already gone."

How should the cost of Tet gifts for customers be accounted for in each specific case?

Accounting for Tet (Lunar New Year) gift expenses depends on whether the gift goes through inventory, whether it's a physical item or a voucher/service, and how VAT is handled. A single accounting entry should not be used for all cases.

Accounting for Tet gifts purchased and given directly to customers (not going through inventory).

In this case, businesses typically record it directly as selling expenses or administrative expenses, while also tracking input VAT if it is eligible for deduction. The documentation must demonstrate the business purpose, valid payment, and a list of recipients for each batch.

Bizzi helps consolidate all documents into batch audit packs, which is very useful during the settlement process.

Accounting for Tet gifts that have been received into inventory and then given to customers.

When gifts are received into inventory, the business records them as inventory and only recognizes the expense when they are given away as gifts. Quantity reconciliation by batch is mandatory to avoid losses. This is a case where 3-way matching and inventory reconciliation should be applied.

Accounting for Tet gifts that are vouchers or services.

Vouchers/e-vouchers should be considered in terms of their "right to use" nature. Businesses need to determine when to recognize expenses, especially for unused vouchers at the end of the period. A clear internal accounting policy for vouchers helps avoid disputes during settlement.

What documents are needed to settle the cost of Tet gifts for customers?

During the tax settlement phase, the tax authorities don't ask "which account did you use for accounting?", but rather: Is this expenditure real, reasonable, serving production and business purposes, and how is it controlled?Therefore, expense settlement records for Tet gifts for customers need to be standardized according to operational logic, not just a collection of disparate invoices.

Essentially, a Tet gift campaign equals a complete settlement document, where each invoice is just one link in the chain.

1. Approval and budget documents (proof of "authorized spending")

This is something many businesses overlook, but it's crucial when asked "why did you spend this amount?".

The application should include:

Purpose: To demonstrate that expenses are controlled and not arbitrary expenditures.

Bizzi: saves all approval logs, timestamps, and approvers for each cost center → creates a clear audit trail.

2. Procurement and execution records (proof that “transactions actually took place”)

Depending on the purchasing model, this set of documents may vary, but the logic always follows this sequence:

With large quantities of gifts, the lack of GR (General Receipt) or batch delivery records is a major risk factor. Bizzi allows all these documents to be grouped by campaign code and batch, preventing each department from storing them in a different way.

3. Invoice and VAT documents (proof of tax validity)

This is a mandatory section when settling accounts:

Common mistakes:

Bizzi Bot automatically alerts you to these risky invoice templates as soon as it receives an invoice.

4. Payment documents (proof of eligibility for corporate income tax)

Especially important for invoices of 20 million VND or more:

The lack of non-cash payment documentation is the leading reason for expense rejection.

5. Handover documents & recipient (proof of "serving production and business")

This is a very important feature, even though the law doesn't always explicitly state that it's "mandatory":

This documentation helps answer the tax authorities' core question: "Where did the gifts go and what business activity were they used for?"

Frequently Asked Questions about the Cost of Tet Gifts for Customers

Below is information regarding the cost of Tet gifts for customers or accounting for Tet gift expenses.

Is the cost of Tet gifts for customers subject to a 1% tax-to-value ratio (%) when calculating corporate income tax?

Currently, the cost of Tet gifts for customers... No longer constrained by the "% ceiling". As previously understood, the focus when settling corporate income tax is whether the expense meets the conditions. Deductible slip According to Circular 96/2015, including: related to production and business activities, does it have supporting documents Valid and payment made according to regulations.
From the CFO's perspective, the risk lies not in the spending ratio but in... The ability to demonstrate the purpose and reasonableness of the expenditure when audited..

Are VAT charges applicable when giving Tet gifts to customers as part of a promotional program?

If Tet gifts are given within certain limits The promotional program complies with regulations.The VAT treatment differs from that of regular gifts. Businesses still have to issue invoices, but... The taxable value may be zero., along with a complete promotional program file.
 The issues that CFOs need to be aware of are: How to record an invoice (invoice line price = 0) and accompanying legal documents, because even a slight procedural error can result in retroactive collection of VAT on output.

What are the tax-related invoices and tax treatment for Tet gifts that are wine, beer, or other specific taxable goods?

With the special goods For items such as alcohol, beer, tobacco, or goods subject to excise tax, businesses must apply the applicable regulations. Tax rate by item Accordingly, even when used for gifts or promotions.
 In terms of governance, the CFO should request Separate the category of specific items in the Tet gift policy.Avoid mixing them with regular gifts due to the risk. compliance significantly higher when settled.

What are the risks involved in buying Tet gifts in multiple small, separate invoices?

Issuing multiple small invoices from the same supplier may raise suspicions with the tax authorities. split invoice pattern to circumvent payment conditions or internal control thresholds. From a financial control perspective, the CFO should manage according to vendor aggregation and the total value for each Tet gift campaign, instead of looking at each individual invoice, while also combining mechanisms. anomaly detection to detect abnormalities.

Do the expenses for Tet gifts for customers require a list of recipients and a handover record?

Legally, this is not a mandatory document in all cases, but in practice, recipient list and handleover minutes This is very strong evidence to demonstrate the business purpose and the reasonableness of the expenditure.
Especially when settling accounts, linking Tet gifts with specific target audience and specific program This helps make the settlement documents a complete set. audit pack Complete, significantly reducing the risk of expense exclusion.

If Tet gifts have already been given to customers but the input invoices are received after Tet, will these expenses be disallowed?

The core issue lies in cut-off and the ability to prove actual time of occurrenceIf the business has a handover record, delivery documents before Tet (Lunar New Year), and a policy for recording expenses accordingly. accrualThe expenditure still has a valid basis for acceptance.
 The CFO needs to ensure the process. period closing Consistency is key, avoiding situations where the handling varies each year, which can lead to risks when comparing periods.

How do Lunar New Year gift expenses affect cash flow, and which metrics should CFOs monitor?

In accounting terms, expenses can be recorded accrually, but cash out This also depends on the actual payment schedule with the supplier. The CFO should monitor this. AP aging, short-term cash flow plan and especially after-tax cost to assess the actual cost after tax.
If not properly controlled, Tet gifts – even if intended for marketing purposes – can still put significant pressure on businesses. cashflow planning end of the year.

What support does Bizzi offer when businesses process hundreds or thousands of Tet gift invoices?

In actual operation, the risk doesn't come from a single bill, but from... large volume of invoices in a short period of timeBizzi Bot uses OCR/RPA To automatically extract data and alert you to invoice risks, Bizzi Expense helps you control your budget and approve spending. real-time campaign-specific; while Bizzi AR/AP support 3-way matchingBlock payment if the invoice does not meet the eligibility requirements.

This approach helps CFOs control Tet gift costs at the grassroots level. system, regardless of manual inspection.

Bizzi Bot helps process and categorize large volumes of invoices in a short amount of time.

How long should electronic invoices for Tet gifts be stored, and how should they be stored for quick retrieval?

Electronic invoices are important accounting documents and typically require a minimum number of copies to be stored. 10 years according to regulations. However, for businesses with multiple Tet gift campaigns, the issue is not just about storage, but also about... Quick access during inspection.

The CFO should request that invoices be kept as follows: campaign/batchattach metadata indexing sufficient to ensure audit trail Clearly, this avoids wasting time on manual review when inspectors are present.

Conclusion: Controlling the cost of Tet gifts for customers is not just about "tax compliance," but a management challenge.

In fact, Cost of Tet gifts for customers This is not a single, momentary expense, but part of a customer care and retention strategy, directly impacting deductible expenses, tax obligations, and year-end cash flow. Businesses that don't fully understand this nature should be cautious. Cost of giving Tet gifts to customersFrom invoicing methods and VAT processing to documentation and timing of recording, the risks extend beyond simply having expenses disallowed; they can also lead to retroactive collection, penalties, and the pressure of providing explanations during final settlement.

From a CFO's perspective, the problem... Accounting for the cost of Tet gifts for customers. A systems-based approach is needed: clear policies, consistent approval, verification, and archiving processes, and centralized data for tracking by campaign, department, and vendor. This is precisely where manual tools like Excel or fragmented email processing easily create blind spots in control.

In this context, Bizzi acts as a financial control infrastructure for Tet gift expenses: from Bizzi Expense to help manage budgets and approve expenditures in real time, Bizzi Bot to support reading and verifying invoices and alerting to risks, to Bizzi AR/AP ensuring reconciliation and payment according to conditions. When the entire process is digitized and has a clear audit trail, businesses are not only "right" when settling accounts, but also... Proactively control costs and cash flow. during the most sensitive periods of the fiscal year.

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