Value-added tax invoice, often abbreviated as VAT invoice, This is a type of invoice associated with the VAT deduction method. In daily communication, many businesses and buyers refer to it as a VAT invoice. VAT invoice or VAT invoice. "Red invoice" is a familiar term from the days of paper invoices, and is not the legal name or identifying characteristic of today's electronic invoices.
For businesses, it's important not only to know what a VAT invoice is, but also to understand it. What are invoices used for, who issues them, when are they required, and what information should buyers check?. From July 1st, 2026, the current electronic invoice management framework is regulated by Decree 254/2026/ND-CP and Circular 91/2026/TT-BTC.
What are VAT invoices used for?
The role of invoices varies depending on the business. sell good buy.
Record transactions, tax information, and generate data for accounting, tax declaration, and invoice management.
Transaction reconciliation, accounting documentation, and one of the bases for considering VAT deduction if eligible.
Verify the seller, goods/services, amount, taxes, and their conformity with transaction records.
For businesses that sell goods or provide services.
A VAT invoice records a transaction that has occurred between the seller and the buyer, including information about the goods or services, the transaction value, and the corresponding VAT amount depending on the applicable case.
The data on invoices is also part of the records used for accounting, tax declaration, and tax management. For a broader understanding of invoice types and invoicing principles, please refer to the guidelines. Invoices and regulations for issuing invoices in Vietnam.
For businesses purchasing goods and services
Invoices help accountants determine what a business has purchased, from whom, the pre-tax value, VAT, and the total amount payable. They are also one of the important documents when businesses consider their right to deduct input VAT.
For the buyer's accounting, invoices are also used to reconcile with transaction records, suppliers, and actual goods or services before recording and paying. For a more in-depth look at the buyer's side, see What are input invoices and how to manage them?.
What is VAT invoicing?
In practice, phrases like "issue VAT," "issue VAT invoice," "get VAT," or "issue VAT to company" are commonly used in communication between buyers and sellers.
In essence, VAT invoice This refers to the seller issuing a VAT invoice for a transaction that falls under the category requiring this type of invoice and sending the invoice to the buyer as per regulations.
For example, a business that purchases a service and requests a "VAT invoice to the company" is typically asking the supplier to issue an invoice with the purchasing company's information so that the accounting department has documentation for managing transactions, accounting, and processing taxes according to actual circumstances.
“"Issuing VAT" therefore does not mean "issuing a separate tax amount" to the customer. VAT is value added tax; A VAT invoice is a document that shows the transaction and the corresponding tax information.
Who is authorized to issue value-added tax invoices?
Seller This refers to the party issuing invoices for the sale of goods or provision of services as stipulated by law. VAT invoices are associated with businesses applying the VAT deduction method according to current regulations.
Buyer The business that receives the invoice checks the information on the invoice and uses it for accounting, tax, or related reconciliation purposes.
Tax authority "Invoice users" are not defined in the same sense as buyers or sellers; tax authorities receive, manage, and utilize invoice data for tax administration purposes.
When is it necessary to issue a VAT invoice?
For sellers who are required to use VAT invoices, the invoice must be issued when the sale of goods or provision of services occurs, at the time stipulated by law.
It should not be understood that the seller only has to consider issuing an invoice when the customer requests a VAT invoice. The obligation to issue an invoice is determined by... nature of the transaction and legal regulations, not just because of buyer demand.
Similarly, it shouldn't be assumed that every business selling goods will use only one type of VAT invoice. The invoicing system also includes other types of invoices corresponding to different tax subjects and methods. For general regulations on invoice issuance, please refer to the following. Instructions for issuing invoices in Vietnam.
What information should a valid VAT invoice typically contain?
Decree 254/2026/ND-CP stipulates the content of electronic invoices. For VAT invoices, accountants typically need to check the following groups of information.
| Information Group | Content to be checked |
|---|---|
| Invoice identification | Invoice name, symbol, form number symbol, invoice number. |
| Seller | Name, address, tax code. |
| Buyer | Name, address, tax identification number, or other identifying information as appropriate. |
| Goods/services | Name of goods/services and corresponding specifications. |
| Transaction value | Unit price, quantity, and total amount when applied. |
| VAT | Price excluding tax, tax rate, VAT amount. |
| Total payment | The total amount the buyer has to pay. |
| Time | Invoice date. |
| Authentication | Signature, tax authority code, or other relevant information depending on the type of invoice and the circumstances. |
Not all types of transactions require all criteria to be presented in the same way. When reviewing a specific invoice, the accountant should begin with the question: “"What type of invoice and transaction is this?"” Instead of using a rigid checklist for all invoices.
The signature requirement, in particular, needs to be checked according to the specific type of invoice and the applicable case; a single rule should not be applied to all electronic invoices.
What are the differences between VAT invoices, red invoices, and electronic invoices?
| Terminology | How should we understand this? |
|---|---|
| Value-added tax invoice / VAT invoice | The name of a type of invoice. |
| VAT invoice | Common names for VAT invoices. |
| VAT invoice | Common English terms used in context. |
| Red invoice | The familiar name from the days of paper invoices; not the current legal name. |
| Electronic bill | The invoice format is created and managed as electronic data; this is not synonymous with VAT invoices. |
If you need to learn more about classifications, tax authority codes, and invoices from cash registers, see What is an electronic invoice?.
How does a VAT invoice differ from a sales invoice?
Both VAT invoices and sales invoices are legal documents when issued to the correct recipient and in accordance with regulations. Sales invoices should not be understood as having "less legal value" than VAT invoices.
| Criteria | VAT invoice | Sales invoice |
|---|---|---|
| Related tax methods | Related to the deduction method. | Related to cases where sales invoices are required by regulations. |
| Show VAT | Show the price before tax, the tax rate, and the VAT amount as needed. | Do not separate VAT according to the structure of the VAT invoice. |
| Buyer | It may be one of the grounds for considering VAT deduction if eligible. | Do not grant input VAT deduction rights, such as VAT invoices, simply because there is an invoice. |
| Role | Sales and tax documents. | Sales documents vary depending on the applicable customer. |
If businesses need to determine exactly which type of invoice they receive, see the in-depth article on this topic. What is a sales invoice?.
How is the date of issuance of a VAT invoice determined?
The timing of invoicing depends on the nature of the transaction.
- Selling goods: The general principle is that the transfer of ownership or the right to use the goods to the buyer takes place at the time of transfer, regardless of whether payment has been received or not.
- Service provided: The general principle is the time of completion of service provision; in cases where payment is collected before or during the provision of services, the relevant regulations and exceptions must be referenced.
- Multiple deliveries or handovers: Each delivery or handover may give rise to an invoicing obligation for the corresponding quantity or value.
Decree 254/2026/ND-CP also specifies the timing of invoice issuance for many specific activities. An explanation of "what is a VAT invoice" should not include all these cases in a long list; accountants need to refer to specialized regulations if their business belongs to a specific group.
Common misunderstandings about VAT invoices
- “"VAT is a type of invoice."” That's incorrect. VAT stands for Value Added Tax.
- “"VAT invoices must be red."” It is no longer compatible with today's electronic systems. "Red invoice" is a term with historical origins.
- “"Having a VAT invoice guarantees tax deductions."” That's incorrect. The invoice is one of the supporting documents; businesses must also meet the conditions for VAT deduction as stipulated in the regulations.
- “"All electronic invoices are VAT invoices."” That's incorrect. An electronic invoice is an electronic form; there are many types of invoices within the system.
- “"Sales invoices do not have the same legal validity as VAT invoices."” That's a misunderstanding. Each type of invoice has a different user and tax role.
- “"Businesses are only required to issue invoices when customers request them."” This should not be interpreted that way; the obligation to invoice arises from the transaction and the regulations apply to the seller.
When businesses have to manage more invoices than they can handle manually.
When there are only a few invoices each day, accountants can handle each document individually. When the number increases to hundreds or thousands of invoices, the problem changes. Issuing, receiving, checking, storing, and reconciling invoice data..
Frequently Asked Questions about VAT Invoices
What is a VAT invoice?
A VAT invoice is a type of invoice used in cases where the VAT deduction method is applied as stipulated. The invoice shows transaction information and tax information according to the applicable case.
What are VAT invoices used for?
For the seller, the invoice helps record the transaction and output tax information. For the buyer, the invoice is a document used for accounting, transaction reconciliation, and is one of the bases for considering input VAT deduction if the conditions are met.
What is VAT invoicing?
This is a common way of saying that a seller issues a VAT invoice for a transaction that falls under the category requiring this type of invoice.
Is a VAT invoice the same as a red invoice?
“"Red invoice" was the familiar name used to refer to VAT invoices. Currently, the color red is not a legal characteristic for identifying electronic VAT invoices.
Are electronic invoices the same as VAT invoices?
Not necessarily. An electronic invoice is an electronic form of an invoice; there are many different types of electronic invoices. A VAT invoice is one type of invoice.
What is the English term for a value-added tax invoice?
In a general context, it can be used VAT invoice or Value Added Tax Invoice. In international transactions, the terminology used should be understood according to the tax system and document type of each country.
How does a VAT invoice differ from a sales invoice?
The main differences lie in the target users, the tax calculation method, and the way VAT is presented. VAT invoices separately display VAT information and can be one of the bases for buyers to consider deducting input VAT if eligible.
