Declined Incoming Wire Transfers: Tax Evasion Scheme or Billing Blunder?

Widespread Refusal to Accept Bank Transfers: What’s Happening?

As per Decree 70, from June 1st, individuals and households engaging in tax-fixed price contracts with annual revenues of 1 billion VND or more must adopt electronic invoices generated from cash registers connected to the tax authority. This will result in more accurate and realistic calculations of business revenue, leading to potential adjustments in fixed taxes.

Referring to Circular 40/2021, individuals and households with annual revenues of 100 million VND or higher are mandated to pay three types of taxes and fees: the business license fee, value-added tax (VAT), and personal income tax.

With the implementation of electronic invoice and receipt management, many businesses have started to include VAT on customer invoices. Consequently, the prices of goods have increased for consumers.

A notice from a Facebook account selling ready-to-eat food at 945 Hong Ha, Hanoi, clearly states that they will increase prices for all items starting June 1st. According to this business, this is the only way to comply with the new tax law.

“The store doesn’t have to worry about, maneuver, or pay taxes on behalf of customers. This contributes to nation-building. Customers can still make bank transfers as usual, and companies or organizations will have valid invoices for payment vouchers,” the store said, expressing concern, however, that customers would have to bear the increased prices, which could slow down sales.

Ms. Thuy Ha (Dong Da, Hanoi) shared her surprise when, in recent days, traditional market vendors often reminded her to “bring cash next time.” “I usually buy beef from a familiar shop in Kim Lien market (Hanoi), but the vendor told me that they would no longer accept bank transfers because the money entering the account is monitored,” Ms. Ha recounted.

While some direct sellers refuse to accept bank transfers, online sellers are also changing the way they receive payments. Sellers are changing their receiving accounts and no longer accepting COD (cash on delivery) orders. “We no longer support COD orders. If customers want COD and are concerned about risks, they must bear an additional 8% VAT and 1.5% personal income tax,” said Ms. Vu T., an online seller in Hanoi.

Sellers are also urging customers to make bank transfers to ship orders sooner and avoid inspections by market management authorities regarding the origin of goods.

Deputy Minister of Construction Speaks on Eliminating Building Permits

On June 4th, at the regular Government press conference, leaders of the Ministry of Construction answered reporters’ questions regarding the elimination of building permits, especially for residential constructions.

Mr. Nguyen Danh Huy, Deputy Minister of Construction, stated that the Party and State aim to create the most favorable conditions for businesses and people. The Ministry of Construction shares this view and believes that all administrative procedures and permits must be taken seriously, reviewed, simplified, and eliminated to create the most favorable conditions for people and businesses.

According to Mr. Huy, the Prime Minister has already set out the direction to eliminate building permits in Official Dispatch No. 78. Currently, the Ministry is reviewing all legal documents related to licensing, including decrees and circulars issued by the Ministry.

“We will organize an evaluation and draw conclusions. All procedures for granting construction permits to people are delegated to local authorities. While we aim to create the most favorable conditions for businesses, we must also assess the impact. If we eliminate permits, how will it affect the rights and legitimate interests of other people and businesses?” Mr. Huy said.

Based on the evaluation and conclusions, the Ministry will propose a roadmap to amend and reduce requirements in the Law on Construction. Mr. Huy affirmed that all these improvements would be completed by 2025.

For now, in areas with detailed planning at a scale of 1/500 that has been approved, according to Mr. Huy, immediate adjustments can be made. For areas with urban designs, according to the Law on Architecture, state management has already been implemented, so building permits for people can be eliminated immediately.

US Monitors the Currencies of Nine Countries

On June 5th, the US Treasury Department released a periodic currency report, assessing the exchange rate and macroeconomic policies of major trading partners. The report showed that no country was labeled a “currency manipulator” in the four quarters ending in December 2024.

However, Ireland and Switzerland were added to the monitoring list, bringing the total to nine countries, along with China, Japan, South Korea, Singapore, Taiwan, Germany, and Vietnam. The currency monitoring list was established by the US in April 2016 under the Trade Facilitation and Trade Enforcement Act of 2015.

China remains under observation, with a warning that it may be designated a currency manipulator if official or unofficial intervention in the exchange rate is detected. China has been on every report since 2016.

During the previous administration of US President Donald Trump, China was labeled a manipulator in August 2019 and removed from the list in January 2020 when the two sides signed a trade agreement.

Switzerland was added back to the monitoring list due to its large trade surplus with the US and its current account surplus exceeding the warning threshold. The US had determined that Switzerland met all three criteria in 2022 but still refrained from concluding that it was a manipulator.

Why Are Busy Streets in Hanoi Suddenly Deserted?

Recently, many bustling business streets in Hanoi have unexpectedly become unusually quiet. Many businesses have temporarily closed their doors, not due to a lack of customers, but to cope with new tax policies and mandatory electronic invoices. In addition, the city’s campaign to inspect counterfeit and imitation goods has prompted traders to quickly standardize their business operations.

Ms. Thuong (Hang Dao Street) shared that she has been closing her shop since June 2nd, only occasionally selling to a few familiar customers. The reason for the closure is to complete the procedure for creating electronic invoices through the sales machine. According to Ms. Thuong, her store used to issue handwritten traditional invoices, but now they have to use modern equipment, so she needs time to learn and adapt.

Another reason, not only for Ms. Thuong but also for many clothing businesses on Hang Ngang, Hang Dao, and other streets, is the origin of the goods. The clothing comes from both domestic garment workshops and China. Only large workshops can issue valid initial invoices for domestically produced goods, while goods from China only have regular retail invoices. Therefore, closing the stores at this time is “mandatory” to standardize the source documents.

According to several businesses on Hang Ngang, Hang Dao, and Luong Van Can streets, the stores will complete the tax procedures while also waiting for the city’s campaign to inspect counterfeit and imitation goods to end on June 15th before reopening.

Over 111,000 Businesses Have ‘Disappeared’

The latest data on business registration shows that in May, the country had more than 15,100 newly established enterprises and 8,000 businesses resuming operations.

On the other hand, 5,920 businesses registered for temporary suspension of business with a time limit; 6,535 businesses temporarily ceased operations while waiting for dissolution procedures; and 1,909 businesses completed dissolution procedures. The total number of businesses that withdrew from the market was 14,368.

In the first five months of 2025, 111,800 new businesses were established or resumed operations. Meanwhile, 111,600 businesses withdrew from the market. This ratio is approximately 1:1, meaning that for every new business entering the market, one business withdraws.

The average registered capital of a newly established enterprise reached 9.7 billion VND, a decrease of 2.7% compared to the same period last year.

On average, more than 22,300 businesses withdrew from the market each month. The wholesale, retail, and automobile repair sector topped the list with more than 3,500 dissolved businesses in the first five months.

The manufacturing industry had 1,015 dissolved enterprises.

Tax Authority Speaks on Customers Being Charged Extra for Bank Transfers

Regarding the situation where some stores only accept cash payments and refuse bank transfers to evade taxes, the Tax Department of Area I (in charge of Hanoi and Hoa Binh) stated that cases of deliberately concealing revenue and making untrue or incomplete tax declarations would be strictly handled according to regulations.

The tax authority will carry out tax collection, tax assessment, and impose penalties for acts of false declaration, tax evasion, and even criminal prosecution if necessary.

According to regulations, VAT revenue for households and individuals is calculated based on total sales, including taxes (if applicable), regardless of whether the money has been collected.

“The act of displaying a ‘cash-only’ sign or providing vague information about bank transfers – for example, ‘borrowed money’, ‘coffee money’, or ‘shipping fee’ – makes it difficult for authorities to determine revenue and does not reduce tax obligations. Instead, it may be considered a sign of suspected revenue concealment,” affirmed the Tax Department of Area I.