What is a “red invoice,” and what is their significance to commercial operations in Vietnam?

Simply put, a “red invoice” is the nickname given to Vietnam’s Value Added Tax (VAT) invoices. Such invoices are mandated to undertake commercial activities such as the sale of goods and services, imports of foreign goods, and exports to non-tariff zones. The invoices are used to calculate the value added tax of goods and services, and thus determine which party of a transaction is liable to pay relevant taxes. Furthermore, VAT invoices serve to verify corporate expenditures to the Vietnamese government, and are thus essential to doing business in Vietnam.