Purchasing scrap without invoices is a fairly common situation at many manufacturing, trading and recycling enterprises. The issue is not the absence of invoices itself, but whether your business can prove the transaction is real, with the right counterparty and in line with regulations.
Based on the implementation of Official Letter 2646/CT-CS dated April 24, 2026 of the Tax Department, businesses should pay particular attention to the seller, the declaration form, the payment method and the supporting documents kept on file. If controls are loose, the expense can easily be disallowed at tax finalization.
No invoice does not mean the expense cannot be deducted
In certain special cases, a business buying goods or services from a non-business individual or a person who directly collects scrap may prepare a declaration list in place of an input invoice. However, the declaration list is only part of the file. The tax authority may still require the business to prove the transaction is real, the goods were received and the payment was made in accordance with regulations.
With scrap purchased without invoices, a common mistake is to merely prepare a declaration list and immediately record the expense. This approach creates major risk if the weighing slip, handover record, seller information or payment voucher is missing. In essence, the expense must be proven through the flow of goods, the flow of money and a signed acceptance of responsibility.
Deductible expenses do not rely on the declaration list alone. The business must prove the transaction is real, with the right counterparty and in compliance with payment rules.
Classifying the seller is the decisive step
Before preparing the declaration list, your business needs to determine which group the seller belongs to. This is an important step because not every invoice-less case can be handled with a declaration list. If classified incorrectly, the declaration list may not be a sufficient basis to defend the expense.
| Seller group | Characteristics to check | Recommended handling |
|---|---|---|
| Individuals who directly collect scrap | Not a business establishment or household business, does not use invoices, has real transactions | A declaration list may be considered if there is sufficient supporting documentation |
| People who buy from many sources to resell | Shows signs of regular business activity, not in the direct-collection group | Do not handle with a declaration list in place of an invoice |
| Household businesses or business individuals | Has business activity and tax obligations as prescribed | Must register, declare, pay tax and issue invoices as guided |
Practical issues often arise with sellers who recur frequently, sell in large volumes or have a stable collection operation. In such cases, the business should reassess the nature of the transaction. If the seller is in fact conducting business, using a declaration list in place of an invoice carries high risk.
Choose the right declaration form by the time of the transaction
Scrap purchased without invoices must use the correct declaration form for the time of the transaction. The transaction date is the basis for determining the applicable form, not the date accounting completes the file. Therefore, businesses should not mix forms between periods.
| Time of transaction | Declaration form | Basis in the source document |
|---|---|---|
| Before March 12, 2026 | Form 01/TNDN | Issued together with Circular 78/2014/TT-BTC |
| From March 12, 2026 onward | Form 02/TNDN | Issued together with Circular 20/2026/TT-BTC |
Your business should keep a clear internal principle: the transaction date determines the declaration form. If an old file is supplemented after the form changes, accounting must still rely on the actual purchase date. This is a small detail but one that easily causes discrepancies during a file review.
Minimum set of documents to keep when buying scrap
The declaration list does not replace the entire obligation to keep records. To protect the expense, the business needs a sufficiently strong set of documents clearly showing the seller, goods, quantity, value, handover and payment. The clearer the file, the lower the risk at finalization.
| Required documents | Control purpose |
|---|---|
| A purchase declaration list of goods and services in the correct form | Serves as a basis to replace the invoice in special cases |
| Seller information including full name, ID number, address and contact | Correctly identify the selling party |
| Payment vouchers or non-cash payment documents | Prove the amount was paid in accordance with regulations |
| Handover record, weighing slip and warehouse receipt | Prove the goods were actually received |
| Transport documents and handover photos if available | Strengthen evidence of the actual transaction |
| Confirm the seller is not a household or business establishment | Reduce the risk of applying the wrong declaration list |
Accounting should only record the expense when the file is complete. If the handover slip is missing or the seller is not clearly identified, the business should hold the file pending supplementation. Recording first and finding documents later is convenient at first but exhausting when you must explain it later.
Note the payment threshold of VND 5 million
According to the source document, payments of VND 5 million or more per day to each seller must be made by non-cash methods. This is a very important control point when a business buys scrap from many individuals. If cash spending exceeds the threshold, the expense may be at risk when determining deductible costs.
- Track the total purchase value per seller within the same day.
- Check the VND 5 million threshold before making payment.
- Prioritize bank transfer or non-cash payment methods if the threshold is exceeded.
- Keep payment vouchers together with the declaration list and handover file.
- Do not artificially split transactions to evade the payment condition.
The procurement and accounting departments must coordinate from the start. If procurement has already paid in cash but accounting only discovers it when closing the file, remediation is much harder. A pre-payment control process helps the business avoid very regrettable mistakes.
Internal process to apply before recording in the books
To limit risk, your business should standardize the process of buying scrap without invoices into fixed steps. This process is not only for accounting; it needs the participation of procurement, the warehouse and the person responsible for approval. Each department controlling one part reduces files that look good on paper but lack substance.
- Step 1: Classify the seller before the transaction.
- Step 2: Collect seller information and necessary commitments.
- Step 3: Carry out handover, weighing and warehousing.
- Step 4: Check the VND 5 million payment threshold.
- Step 5: Prepare the declaration list in the correct form by transaction date.
- Step 6: The legal representative or authorized person signs to take responsibility.
- Step 7: Keep the file and record in the books after verifying all conditions are met.
In this process, procurement and the warehouse confirm the actual goods, the weighing slip and warehousing. Accounting checks the file conditions, payment method and declaration form. The legal representative or authorized person signs to take responsibility, while the chief accountant or tax team should review before finalization.
Per-occurrence electronic invoices for household and individual businesses
Besides buying from individuals who directly collect scrap, a business may also encounter sellers who are household or individual businesses that have not registered to use electronic invoices. When the seller needs to issue an invoice for each transaction, the seller must declare and pay tax first so the tax authority can issue a coded invoice.
According to the official letter in the source document, household and individual businesses with annual VAT-taxable revenue above VND 500 million and below VND 1 billion are not required to use coded electronic invoices or invoices generated from cash registers connected to the tax authority. If they need to use invoices, the seller follows the procedures guided by the tax authority.
The business should not handle this on the seller's behalf. The appropriate way is to guide the seller to contact the directly managing tax authority to be issued a per-occurrence invoice.
The key point is that the declaration list and per-occurrence invoices serve different situations. If the seller is in the group required to register, declare and issue invoices, the business should not use a declaration list to legitimize the file. Getting this step wrong can bring risks regarding cost, tax and the burden of explanation.
Common risks and how to control them
| Risk | How to control |
|---|---|
| Wrong type of seller | Require commitments and review signs of regular business activity |
| Cash payment of VND 5 million or more | Switch to non-cash payment |
| Missing handover or warehousing documents | Do not record the expense until the file is complete |
| Abnormal value or quantity | Add the weighing slip, photos, transport documents and explanation of the goods' origin |
| Repeated transactions with the same individual | Reassess whether that individual is conducting business |
The bottom-line principle is very simple: only record the expense when there is the right seller, the right declaration form, the right payment method, sufficient documents and a signed person taking responsibility. If any of these points is unclear, the file should be supplemented before being entered as a deductible expense.
For businesses that frequently buy scrap without invoices, building an internal checklist is necessary. The checklist helps procurement know what to obtain, the warehouse know what to confirm and accounting know when it can record entries. That is how to reduce real risk, rather than only reacting once the tax authority has asked.
Does your business need to standardize documents and the process of buying without invoices? See accounting and tax declaration services of IAI Partner for support in controlling finalization risks.
Frequently asked questions
Can scrap purchased without invoices be counted as an expense?
It may be considered if the transaction has the right counterparty, a declaration list in the correct form, payment in line with regulations and sufficient documents proving the real transaction.
When is Form 02/TNDN used?
According to the source document, Form 02/TNDN issued with Circular 20/2026/TT-BTC applies to transactions arising from March 12, 2026 onward.
Should a business request per-occurrence invoices on the seller's behalf?
No. The business should guide the seller to contact the directly managing tax authority to carry out the procedure for issuing per-occurrence invoices.
Recommendation from IAI Partner
Dear valued enterprise,
Buying scrap without invoices is an activity that can occur regularly, but it should not be handled out of habit or based on a declaration list alone.
Your business should review its process for classifying sellers, payment conditions, handover documents and signed acceptance of responsibility before recording expenses.
Need support? IAI Partner can accompany your business in standardizing documents, reducing finalization risks and building a suitable control checklist.
Best regards,
iai Partner®
Source: IAI-Partner.com
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