The tax authorities in Hanoi have issued an official letter 65157 / CT - TTHT on VAT handling concerning distributors' incentives.
According to this, 10% VAT will be incurred if you pay a distributor for a promotion activity pursuant to the provision of promotional activities. Distributors need to issue a 10% VAT invoice.
This provision is in agreement with the guidelines of the conventional tax administration and local tax authorities.
However, on the other hand, there are cases where VAT is not imposed when
sales promotion activities are implemented according to regulations.
In this case, the distributor needs to issue only the receipt. Please note
that this judgment may differ depending on local tax authorities.