In business, it is quite common for businesses to give away goods to customers or employees to show gratitude, promote sales or provide internal care. However, many businesses and accountants are still confused about when to issue invoice for free gift How to handle it to ensure compliance with tax regulations?
The following article by Bizzi will help you understand the cases where invoices must be issued, how to account for them, and important notes when giving away goods without collecting money to avoid tax risks.
1. Why do we need to issue invoices when giving gifts?
In business, giving gifts to customers or employees is a common way to show gratitude, promote the brand or encourage work spirit. However, even if there is no revenue, businesses are still required to issue invoices for these cases to ensure compliance with legal regulations and transparency in cost accounting.
1.1 What is a free gift?
Free gifts include products, goods or services that businesses use for giving, donating, gifting, promotion or internal use (except for internal circulation to continue production). In these cases, invoices must be issued, even when no payment is collected from the recipient, for the purpose of tax declaration and strict cost management.
1.2 General regulations on invoicing for gifts, presents, and donations
When businesses give gifts to customers or employees, the following points should be noted:
- Invoice time: Is the time of transferring ownership or right to use goods to the recipient.
- Invoice content: Full information about the goods and services given as gifts must be recorded, including name, quantity, unit price, tax rate and VAT amount (if any). In case the gift is part of a valid promotional program, the taxable price can be 0.
- Invoice type: Value added tax invoice or sales invoice can be used, depending on the nature of the activity and the recipient of the gift.
Issuing invoices for free gifts not only demonstrates compliance with the law but also supports businesses in managing costs, declaring taxes properly and avoiding future audit risks.
2. Legal basis for issuing invoices for free gifts
Job issue invoice for free gift is a common activity in businesses, especially in promotional programs, customer appreciation or product promotion. However, businesses need to comply with legal regulations on taxes and invoices, to avoid risks related to value added tax (VAT) declaration or administrative penalties.
Relevant regulatory documents
The activity of issuing invoices for free gifts is regulated by the following legal documents:
- Decree 123/2020/ND-CP: Regulations on principles of creating, managing and using invoices and documents, including electronic invoices for non-cash goods and services.
- Decree 70/2025/ND-CP (effective from June 1, 2025): Amending and supplementing a number of articles of Decree 123/2020/ND-CP, updating new regulations on electronic invoices, including content related to how to record and handle invoices for promotional and gift goods.
- Circular 219/2013/TT-BTC: Detailed instructions on the implementation of the Law on VAT, clearly stating how to determine tax obligations for donated goods, including requiring invoices and calculating VAT as for normal sales.
- Circular 78/2021/TT-BTC and Circular 32/2025/TT-BTC (effective from May 31, 2025): Instructions for implementing Decree 123/2020/ND-CP, updating regulations on issuing electronic invoices for non-cash goods.
- Commercial Law 2005 and Decree 81/2018/ND-CP: Adjust promotional programs, including regulations on giving away goods to customers and requiring compliance with tax and invoice laws.
Effect of new regulations
From date 01/06/2025, Decree 70/2025/ND-CP officially took effect, leading to changes in the process of issuing electronic invoices for free gifts. At the same time, Circular 32/2025/TT-BTC also replaces Circular 78/2021/TT-BTC from May 31, 2025, updated with new instructions on how to invoice, when to invoice and how to declare VAT for promotional goods.
Effect of new regulations
For example, Decree 70/2025/ND-CP, effective from June 1, 2025, amends a number of regulations on electronic invoices.
3. How to invoice for free gifts
When business issue invoice for free gift, even if there is no revenue, it is still necessary to issue invoices as in the case of normal sales. This is to ensure transparency in tax and cost management, and at the same time help businesses comply with current legal regulations.
General principles when making invoices
Businesses must establish VAT invoice or sales invoice in accordance with the provisions of Article 10 of Decree 123/2020/ND-CP and amended by Decree 70/2023/ND-CP. The invoice must have full information according to the form, even when the goods are not collected for payment.
Information to be shown on gift receipt
- Buyer's name: Enter the name of the individual or organization receiving the gift.
- Unit name: If the recipient is a business, write the name of the unit; if it is an individual, you can leave it blank or write "Customer does not take invoice" if they refuse to receive the invoice.
- Tax ID and Buyer Address: Record the gift recipient's information, similar to a sales invoice.
- Name of goods and services: Clearly state the name of the goods with the note "free gift/gift".
- Unit, quantity, unit price: Fill in the full amount as on a regular sales invoice. Unit price is the selling price excluding tax, even if the goods are not collected for sale.
- Total amount, tax rate, total cost: Calculate fully as sales invoice to ensure proper tax deduction and declaration.
In case the recipient does not take the invoice
If the recipient does not take the invoice, the unit name field can be set to “Customer does not take invoice”. However, the business must still issue an invoice to record expenses and declare taxes, avoiding risks when being inspected by the tax authority.
Invoice time
The time of invoice is at the time of gift delivery, regardless of whether the recipient is an internal employee or an external customer. This helps businesses accurately reflect the transactions that arise and complete accounting records.
How to invoice on Bizzi
4. Regulations on VAT for free gifts
Job issue invoice for free gift is a common accounting practice but can easily cause confusion if the purpose of the gift is not clearly distinguished and current VAT regulations are not complied with. Depending on whether the gift is a regular gift or a promotional item, the calculation and declaration of VAT will be different.
- Distinguishing between regular gifts and promotional goods according to commercial law: Gifts are usually products given on holidays, birthdays, openings, etc. and are not intended for commercial promotion. Meanwhile, promotional goods are made for the purpose of stimulating demand, promoting products and must comply with the Commercial Law and Decree 81/2018/ND-CP. Distinguishing between these two types is the first step to declaring VAT in accordance with regulations.
- VAT calculation price for regular gifts: When the business issue invoice for free gift In the form of normal gifts, the VAT taxable price is the selling price of the same or equivalent goods or services at the time of gifting. This is an important basis for calculating the correct amount of VAT payable.
- VAT calculation price for promotional goods: If the donated goods are part of a legal promotional program (registered or notified to the Department of Industry and Trade), the VAT taxable price is determined to be 0. However, if the promotional program does not comply with commercial law, the enterprise is required to declare and pay tax as normal donated goods. When making an invoice, it is necessary to fully state the selling price, tax rate and VAT amount as in a sales transaction.
- Applicable VAT rate: The VAT rate stated on the gift invoice will depend on the tax rate of that item at the time of the transaction. For example, if the gifted item is subject to a tax rate of 10%, the gift invoice will also record the rate of 10%.
Compliance with regulations when issue invoice for free gift Not only does it help businesses avoid tax risks, it also ensures transparency in accounting books.
5. Declaring VAT on free gifts
Job issue invoice for free gift must be done correctly to ensure compliance with tax regulations and avoid risks when settling. Depending on the role of the enterprise as the donor or recipient, the way to declare VAT will have clear differences:
- Input VAT declaration (For buyers of goods as gifts)
When a business purchases goods or services for the purpose of giving them as gifts to customers or partners, these input invoices can still be declared as normal if they meet the deduction conditions (have valid invoices, non-cash payment documents, etc.). Specifically, declare at indicators 23, 24, 25 on form 01/GTGT.
- Output VAT declaration (For the donor/gifter)
Giving away goods or services (not part of a legitimate promotional program) is still considered revenue generating activities, so businesses need to issue invoices and declare corresponding output VAT. Specifically, declare the value and VAT according to the tax rate applied to the sales index on the 01/GTGT declaration as a normal sales transaction.
- Legal promotions under the Commercial Law
If the donated goods and services are part of a legally registered promotional program, the taxable value is determined to be 0. At this time, the enterprise does not need to declare output VAT for the promotional goods.
- Tax declaration for recipients of gifts
The recipient does not have to declare the invoice for the gift because there is no payment obligation and there is no valid document to deduct input tax. However, the enterprise receiving the gift needs to pay attention to the value of the received assets for internal accounting and management purposes.
6. Accounting for free gifts
Issuing invoices for free gifts and accounting must comply with regulations under Circular 200 or Circular 133. Enterprises must ensure that all steps from purchasing, warehousing, exporting to recording costs and VAT must be completed to avoid errors in tax settlement and financial reporting.
Accounting at the donor/donor side:
In case of buying goods for gifts without going to the warehouse:
- Debit account 641 (Circular 200) or Debit account 642/6421 (Circular 133) – Cost of purchasing gifts.
- Debit account 133 – If there is input VAT.
- Credit account 331/111/112 – Value of goods paid.
- There is account 3331/33311 - Output VAT payable (because invoices must still be issued).
In case of purchasing goods to store in warehouse, then exporting as gifts:
When entering the warehouse:
- Debit account 152, 153, 156… – Value of goods.
- Debit account 1331 – Deductible input VAT.
- Credit account 331/111/112… – Payment amount.
When leaving the warehouse:
- Debit account 641 (TT200) or account 642/6421 (TT133) – Gift expenses.
- Credit account 152, 153, 156 – Value of exported goods.
- Credit account 3331/33311 – Output VAT payable.
In case of giving or donating to employees using welfare funds:
- Debit account 353 - Expenses from welfare fund.
- Credit account 511 - Internal revenue from donated goods.
- Credit account 33311 – Output VAT.
Record cost of goods sold:
- Debit account 632 - Cost of donated goods.
- Credit account 152, 153, 156 – Warehouse value.
Accounting at the recipient of gifts:
Accountants record:
- Debit account 156, 642, 242,… – Total value received including VAT.
- Credit account 711 – Other income. (Applicable according to both Circular 200 and 133)
Comparison between Circular 200 and Circular 133:
- Circular 200 uses account 641 to record selling expenses.
- Circular 133 often uses account 642 or account 6421 for business management costs.
=> Enterprises need to base on the accounting regime being applied to choose the correct account.
If you are having difficulty in processing the correct invoice for free gifts, Bizzi provide automation support solutions Invoicing process, ensuring compliance with regulations, saving time and reducing errors in accounting.
7. Applying technology in managing gift invoices
In the context of increasingly strict tax regulations, issue invoice for free gift requires businesses to ensure accuracy, transparency and compliance with regulations. Applying technology such as accounting software and electronic invoices is an essential solution to optimize this process.
7.1 The role of accounting software and electronic invoices
Accounting software helps automate the entire process from creating warehouse receipts, invoices to accounting for related transactions. In particular, Electronic invoice Support businesses in issuing invoices in accordance with standard data formats prescribed by tax authorities, while ensuring safe storage of invoices for a minimum of 10 years as required by law.
7.2 Comprehensive support solution from Bizzi in managing and issuing invoices for free gifts
For businesses that regularly engage in gift giving, managing invoices related to free gifts can become complicated and time-consuming if handled manually. Bizzi offers an integrated solution ecosystem that helps businesses control the entire process – from input invoices, electronic invoicing, to gift cost management – automatically, standardized and in compliance with legal regulations.
7.2.1 Managing input invoices when purchasing gifts – IPA + 3way solution
Bizzi provides input invoice processing and reconciliation through an automated process combining RPA (Robotic Process Automation) and AI (Artificial Intelligence) technology.
Specifically:
- Automatically download invoices from multiple sources (email, e-invoice portal, accounting software).
- Check invoice validity Based on data from the General Department of Taxation and supplier information.
- Warning of risky or unusual invoices, helping accountants detect errors promptly.
- Automatic 3-way matching between order - receipt - invoice, limit errors in payment.
- Smart invoice storage and classification, easy to retrieve for auditing or tax settlement. This feature is especially useful when businesses purchase gifts in large quantities, from many different suppliers.
7.2.2 Create and issue invoices for free gifts – B-invoice solution
With the B-invoice electronic invoice solution, Bizzi supports businesses in flexibly issuing gift invoices, ensuring compliance with the provisions of Circular 78/2021/TT-BTC and the instructions of the General Department of Taxation.
Businesses can:
- Create electronic invoices for free gifts according to standard form, no missing information such as unit price = 0, taxable price = market price, clearly stating the reason for not collecting money.
- Bulk Invoice for promotions, gratitude gifts, saving processing time.
- Integrate authentication code from tax authorities fast, guaranteed validity.
- Store electronic invoices safely and securely according to regulations (at least 10 years).
- Easily look up invoices by date, recipient name, gift program, etc.
- Synchronize invoice data with accounting software and ERP systems, helping accountants avoid manual entry, reducing the risk of errors.
All of the above features are specifically designed for processing needs. Free gift receipt, helping businesses avoid the risk of having valid expenses excluded, while increasing transparency in accounting.
7.2.3 Controlling gift giving costs – Bizzi Expense solution
In addition to invoice processing support, Bizzi also provides budget management and expense tracking tools for corporate gifting activities.
With Bizzi Expense, businesses can:
- Set a specific budget for monthly, quarterly or campaign giveaways.
- Track your actual spending compared to the allocated budget.
- Warning when spending exceeds the allowed limit, helping businesses control cash flow effectively.
- Generate automatic expense reports, clearly classified by each gift program, implementing department, type of goods, etc.
- Integrate costs with internal financial reporting, serving strategic decisions or analyzing program performance.
8. Other important notes
When conducting gift giving, businesses need to pay attention to some important legal and accounting points to avoid errors when issuing invoices for free gifts. Below are three common situations that need to be carefully checked:
- In case of purchasing goods using welfare funds: If a business uses the welfare fund to purchase goods for the purpose of giving away and not for business purposes, according to some guidance documents from the tax authority, Invoice not requiredHowever, this expense Input VAT not deductible and not included in reasonable expenses when determining corporate income taxBusinesses need to regularly check against the latest regulations and guidance documents to ensure compliance.
- Potential differences between accounting records and VAT returns: In case of donated goods, output VAT must still be declared, the enterprise may encounter the situation difference between the value recorded on the tax return and internal accounting figures. This often arises when the taxable price for the gift is determined based on the market price. Enterprises should prepare complete documents and clear explanations to explain when the tax authority inspects.
- Regulations on maximum discount in promotions: If the product giveaway program is implemented in the form of a promotion, businesses need to note that Maximum discount cannot exceed 50% selling price at the time immediately before the promotion. This level may only be exceeded in special cases such as concentrated promotions, price stabilization programs, or business dissolution.
Understanding and fully updating relevant regulations not only helps businesses transparent accounting, but also Avoid tax and invoice risks during the gift giving process no charge.
Conclude
Job issue invoice for free gift is a mandatory requirement under current regulations, even in the case of gifts for customers or employees. Businesses need to clearly understand how to create invoices, determine appropriate VAT rates – especially paying attention to distinguishing between gifts and promotional goods – as well as declaring and accounting in accordance with regulations.
Fully complying with regulations on invoices, documents and taxes not only helps businesses avoid risks of administrative sanctions but also ensures that the cost of gifts is included in reasonable expenses when determining corporate income tax (if eligible). To optimize this process, businesses can apply technological solutions such as Bizzi electronic invoices to increase accuracy, save time and minimize errors in accounting and tax work.
Businesses register for trial at: https://bizzi.vn/dang-ky-dung-thu/
