HÀ NỘI — Paying in cash does not change a business’s tax obligations. For businesses required to issue electronic invoices, tax and invoicing requirements are determined by the underlying sale and revenue, not by whether the customer pays in cash or by bank transfer.

The issue has drawn attention as some retail businesses in Hà Nội have recently asked customers to pay in cash instead of by bank transfer, while others have requested additional amounts on top of listed prices, describing the extra payment as tax.

Experts said that accepting or requesting cash payments does not, by itself, constitute a tax violation. However, if cash payments are used to omit sales from business records or to avoid issuing invoices as required, the business may face tax and invoicing penalties.

According to Nguyễn Văn Được, general director of Trọng Tín Accounting and Tax Consulting Company, businesses have the same tax obligations regardless of whether they receive payments in cash or through bank accounts.

Dividing payments among different accounts or changing transaction descriptions does not, by itself, alter the nature of the underlying sale or remove the related tax obligations.

Under electronic invoicing regulations, sellers are required to issue invoices when goods are sold, regardless of whether the buyer has already paid. Decree 70/2025/NĐ-CP, which amended Decree 123/2020/NĐ-CP, provides that an invoice for goods must be issued when ownership or the right to use the goods is transferred to the buyer.

The obligation to issue an invoice therefore arises from the sale itself, rather than from the method used to make payment.

A major change in the management of household and individual businesses came into effect on June 1 last year, with the expanded use of electronic invoices generated by connected cash registers.

Under the new rules, household and individual businesses with annual revenue of VNĐ1 billion (US$38,500) or more that directly sell goods or services to consumers and fall within the specified categories are required to use electronic invoices generated by cash registers.

These invoices contain key transaction details, including the goods or services sold, quantity, unit price, total payment and time of issuance. The invoice data is transmitted electronically to tax authorities.

According to Mai Sơn, deputy director general of the Department of Tax, the cash register invoice system is intended to help household businesses adapt to the new tax management model, improve revenue transparency and provide tax authorities with more accurate information about business activities.

Chairwoman of the Vietnam Tax Consultants’ Association Nguyễn Thị Cúc said the system would also allow tax authorities to monitor revenue more closely and build a more complete database of household businesses.

For businesses covered by the cash register invoice rules, paying in cash does not remove the requirement to record and invoice a sale. Where there are discrepancies between recorded transactions and actual sales, tax authorities can use available information and data to verify revenue and tax obligations.

Failure to issue invoices can lead to penalties

Under the Ministry of Finance’s consolidated document 27/2026/VBHN-NĐ-BTC on administrative penalties for tax and invoice violations, failure to issue invoices when required can result in penalties based on the number of invoices not issued.

The penalties range from a warning for failure to issue one required invoice to fines of up to VNĐ80 million for failure to issue 100 or more invoices.

If invoices are not issued, or quantities or values are understated, and the conduct is found to constitute tax evasion, the taxpayer may face tax evasion penalties and must pay the evaded tax in full to the State budget.

The implications of relying heavily on cash extend beyond tax compliance.

Businesses with limited transaction records may find it more difficult to demonstrate their actual revenue and cash flow when applying for bank financing.

National Assembly deputy Nguyễn Thị Việt Nga has previously noted that a preference for cash transactions among some household businesses may leave them with fewer transaction records and less documentation of revenue when seeking access to credit. —VNS