[UPDATED ON 27/01/2021]
In Vietnam, each VAT invoice or international CIT declared commercial invoice must/should go along with a proper contract. The tricky part is that there is not obligation to redact a contract accompanying a VAT invoice written in the law except for real estate transaction or labor contracts. But in case of a tax inspection, if a VAT invoice (over 20.000.000 VND and/or repetitive transactions) is controlled without its contract/agreement, it may constitute a liability and a penalty shall be given. This applies for invoices for services and for goods. We follow the latest guidelines from tax inspectors and from our on-the-field experience.
In the eyes of the party receiving the service notably to ensure the deductibility of the expenses and its compliance to avoid administrative fines, a contract well prepared must come with its offer, delivery of good confirmation (inventory in/out slips) for goods and acceptance/liquidation minutes for services and invoice.
As a service provider and as it is taxable income, the tax department will be less regarding for the contracts. On the other hand, at PCA we always strongly recommend our Clients to have proper contracts as it will ensure the respect of the terms (payment, penalties, etc.). Without a proper contract, and in case of a litigation, there will be no way to claim the due.
If you do not have a contract/agreement that could be legally receivable, please contact your corporate secretary or your accountant, they might be able to help you!