Effective July 01, 2025: Fuel Purchases from VND 5 million Paid in Cash Will No Longer Qualify for VAT Deduction

For transport businesses and cooperatives operating active vehicle fleets, fuel cost management not only affects operational efficiency but also directly impacts the amount of value-added tax (VAT) eligible for deduction — a crucial factor in optimizing operating expenses legally.

1. Key Change in VAT Policy: Cash Payment Threshold Reduced from VND 20 Million to VND 5 Million

According to the new VAT Law 2024 (Law No. 48/2024/QH15), issued by the National Assembly on November 26, 2024 and taking effect on July 01, 2025, goods and services worth VND 20 million or more can only be deducted if paid via non-cash methods, except in specific cases as defined by the Government.

However, the latest draft Decree guiding the implementation of this law, currently in its second revision (last update on June 2025), introduces a significant update: lowering the non-cash payment threshold from VND 20 million to just VND 5 million for VAT deductibility.

This change aims to accelerate the shift toward non-cash payments, streamline administrative procedures, and enhance financial transparency — all in line with the Government’s agenda to drive rapid digital transformation across Vietnam’s economy.

2. Are Current Payment Practices Still Compliant?

For Transport Enterprises:

At present, while only a few large-scale fuel consumers are granted postpaid terms to settle directly with fuel suppliers, many small and medium-sized transport companies still rely on prepayment for each transaction.

• A common practice is a per-trip or per-kilometer lump sum fuel allowance where drivers either receive an advance or pay in advance and get reimbursed later. These transactions are often conducted via cash, personal transfers, or QR code payments. Regardless of the method, drivers must ensure:

  • Fuel purchases remain under the cash payment threshold (currently less than VND 5 million).

  • Legitimate VAT invoices are submitted to the company.

  • For cashless payments, payment evidence presents that transactions actually incurred must be accessible.

  • For payments that drivers pay in advance, a reimbursement form approved by a manager is required.

    • These practices align with Article 10, Clause 2, Point b9 of the draft Decree (2nd revision), which allows VAT deduction if an employee is authorized to make business-related purchases on behalf of the company.

      
      

  

Although each fuel purchase may fall under the VND 5 million, a fleet of multiple vehicles (e.g., from 10) could accumulate daily purchases from a single fuel supplier (each retail station is considered a separate supplier if they have different tax codes) that exceed the threshold. In such cases, if drivers pay in cash, these expenses could be subject to rejection or further scrutiny.

To avoid the need to “constantly monitor” payments, companies could consider mandating cashless payment for all fuel purchases and ensuring proper documentation (legitimate invoice, payment evidence, reimbursement form if applicable). A more efficient approach is to adopt a digital fleet payment and management solution such as Dibee.

For Transport Cooperatives:

In cooperatives, due to the nature of equal partnerships, drivers independently decide how to pay their fuel expenses, usually in cash, via personal bank accounts, or e-wallets.

Because cooperatives are not authorized to require invoice submission from members, they cannot claim VAT deductions on fuel purchases unless invoices are voluntarily provided.

Even when cooperatives offer rewards or cashback incentives to encourage invoice collection, widespread adoption is challenging due to:

• The time-consuming process of requesting manual invoices issuance at gas stations. Drivers need to provide cooperative tax information (name, tax code, email to send the e-invoices). This can take 3–5 minutes under ideal conditions and much longer if the system malfunctions, negatively impacting drivers’s job and service quality. In addition, repeatability brings boredom.
  

• Risks of misdelivery when invoices are sent manually via email. Wrong tax code or email address could result in lost invoices, and cooperatives’ staff often have no means to trace which station the transactions occurred at.

3. It’s Time to Digitalize Fuel Payments

To comply with the new VAT regulations and maximize deductible taxes, businesses should switch to cashless payment methods, such as: Payment orders via banks, internet banking, mobile banking, licensed e-wallets, or bank cards, etc. These transactions must be properly documented as per Decree 52/2024/ND-CP (effective July 1, 2024).

However, collecting all necessary non-cash documentation can become burdensome for fleet operations, accounting teams, or even the drivers themselves. That’s where Dibee comes in — a digital payment and fleet expense management platform integrating with corporate e-wallet.

Dibee: The End-to-End Solution for Fuel Invoice Automation

With Dibee, funds move directly from the company's corporate wallet to the fuel supplier’s e-wallet. This not only digitizes payments but also ensures automatic invoice collection, transparent transaction management, and real-time budget control.

Key Benefits:

• Drivers make cashless payments directly via the Dibee mobile app atDibee partner gas stations.

• Customer information is accessible in Dibee’s system and shared with partner stations, enabling automated invoice issuance and reconciliation via the web portal.

• Accounting teams no longer have to chase down missing or incorrect invoices. They can instantly download single or bulk invoices (up to 300 at a time) in just a few clicks, significantly reducing manual workload.

• Easily view and generate fuel consumption reports by vehicle, driver, department, or business unit, enhancing financial control and reporting.

4. Fuel Allowances via Dibee: Optimize Tax Deduction & Control Employee Benefit Spending

Many businesses add fuel allowances to employee salaries for simplicity. However, this approach prevents companies from obtaining legitimate fuel invoices — thus forfeiting the VAT deduction.

Instead, allocating fuel allowances through Dibee means:

• Every fuel purchase generates a legitimate VAT invoice.

• If daily transactions per supplier exceed VND 5 million, the purchase still qualifies for VAT deduction, because the transaction is business-to-business and fully cashless via Dibee corporate wallet.

Bonus Benefits: Better Budget Control and Prevent Loss

Each employee receives a defined monthly spending limit. Unused funds are automatically reset, no cash withdrawals or transfers are allowed (settings are based on the company's policy). With the unused amount, every month the business will also save a portion of the allowance budget.

Learn more: Managing employee fuel allowance efficiently with Dibee

Conclusion: Don’t Lose Money Over an Unsuitable Payment Method

In summary, from July 1, 2025, under the new VAT Law 2024, any daily purchase over VND 5 million at a single fuel supplier without legitimate cashless payment documents will be ineligible for VAT deduction, resulting in higher operational costs.

However, direct bank transfers to individual gas stations (via account numbers or personal/ corporate QR codes) are not always ideal.

• Companies still have to wait for email invoices, which are prone to errors, especially if drivers refuel at different stations along their routes.

• What’s more, if drivers can’t afford to advance the fuel cost, or the company must manually transfer funds for each transaction (some companies apply this practice to monitor fuel consumption on long routes), it causes delays, operational bottlenecks, and productivity loss, particularly during overnight trips.

Dibee can help businesses seamlessly solve these pain points.

• Just top up your Dibee corporate wallet – no need for per-station transfers, pre-advances, or reimbursements.

• When a transaction occurs, the driver uses Dibee mobile app to pay at partner stations, and funds are instantly transferred from the corporate wallet to the station’s wallet.

  • Invoices are automatically issued with your company’s pre-registered details, minimizing errors or loss.

• The accounting team can bulk download all valid invoices in .inv or PDF format with a few clicks, simplifying reconciliation and tax reporting.

Dibee doesn’t just help you save tax — it automates an entire process that would otherwise be costly, manual, and error-prone. It’s not just a smart financial move, it’s a necessary step in digitalizing your fleet and running an efficient operation.

👉 Contact Dibee today for a detailed consultation!

• Hotline: (028) 73 03 66 99

• Email: sales@dibee.co