Newsletter

Corporate Income Tax (“CIT”)

Deductible expenses in the event of natural disasters

On 16 October 2024, Hai Duong Tax Department issued Official Letter No. 8763/CTHDU-TTHT as follows:

– In case a company incurs losses of materials due to the impact of natural disasters, the company must prepare complete, timely and accurate accounting documents in accordance with the provisions of Article 18 of the Accounting Law No. 88/2015/QH13. The expenses related to the value of losses due to natural disasters, which are not compensated, will be included as deductible expenses when determining taxable income for CIT if they meet the conditions specified in Article 4 of Circular No. 96/2015/TT-BTC.

– In case the asset (such as factory) has not yet reached the end of its depreciation period but is destroyed by a natural disaster, if there are costs to repair or replace the damaged asset to continue using it without compensation, these costs are included in deductible expenses when determining taxable income for CIT according to the provisions of Article 4 of Circular No. 96/2015/TT-BTC. If this fixed asset cannot be repaired or fixed, the Company must comply with the provisions of Article 9 of Circular No. 45/2013/TT-BTC.

– In case the Company recovers assets after the storm, which are tangible fixed assets reduced due to liquidation, loss, dismantling of one or several parts…, the Company shall carry out procedures and record transactions according to Article 35 of Circular No. 200/2014/TT-BTC.

PIT policy for employees affected by storm No. 3

On 23 October 2024, Hai Phong Tax Department issued Official Letter No. 4192/CTHPH-TTHT as follows:

In case a company provides allowances for employees affected by Storm No. 3, if this allowance is an urgent hardship allowance prescribed by the competent authorities, as stipulated in the Labor Contract, Collective labor agreement or Company regulations, the allowance received by the employee, which is equal to or lower than the allowance level applicable to the government sector (if any), is not included in the employee’s taxable income.

Allowances other than those prescribed by the competent authorities, the part of the allowance for urgent hardship that the employee receives higher than the allowance applicable to the government sector (if any) is included in the employee’s taxable income.