Are expenses incurred before the establishment of a business eligible for VAT deduction?

Pre-establishment expenses are eligible for VAT deduction when all supporting documents are available:

• Company authorization letter for an individual to act as a purchasing representative.
• The invoice is valid and complies with invoice regulations.
• Bank payment documents are required if the invoice value exceeds 20 million VND.

Explanation for the above answer

As stipulated in Clause 12b, Article 14 of Circular 219/2013/TT-BTC on VAT deduction:

"b) Before establishing the business, if the founders authorize an organization or individual in writing to make payments on their behalf for certain expenses related to the establishment of the business and the purchase of goods and materials, the business is allowed to declare and deduct input VAT based on VAT invoices issued in the name of the authorized organization or individual. Payment to the authorized organization or individual must be made through a bank for invoices valued at twenty million dong or more.”