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Official Letter No. 319/SLA-NVDTPC dated 19 March 2026, issued by the Son La Provincial Tax Department on the implementation of new tax policies.

On 12 March 2026, the Ministry of Finance issued Circular No. 20/2026/TT-BTC providing detailed guidance on a number of articles of the Law on Corporate Income Tax and Decree No. 320/2025/ND-CP. This Circular took effect on the date of issuance and applies to the 2025 tax period. There are several key new provisions introduced under Circular No. 20/2026/TT-BTC as follows:

1. Detailed Regulations on Deductible Expense Documentation

Circular No. 20/2026/TT-BTC devotes a substantial section of its content to specifying the documents and supporting records required for an expense to be recognized as a deductible business expense under Article 3.

Compared with the previous regulations under Circular No. 78/2014/TT-BTC, Article 3 of Circular No. 20/2026/TT-BTC introduces additional requirements regarding documentation for deductible expenses, including:

1.1. Training and Vocational Education Expenses

The following documents must be maintained: Employment contracts or financial regulations clearly stipulating training expenditures; Decisions assigning employees to training courses; Registration records for the training programs; and Diplomas, certificates, or confirmations of study results.

1.2. Sponsorship and Donation Expenses

For sponsorships and donations related to education, healthcare, disaster relief, and similar purposes, the documentation dossier must include the donation confirmation record prepared according to form No. 01/TNDN issued together with this Circular.

1.3. Expenses Not Corresponding to Revenue Generated During the Tax Period

The Circular allows certain exceptional expenses to be treated as deductible expenses, including bidding expenses incurred for unsuccessful bids, market research or new product development expenses that do not result in successful outcomes, and depreciation expenses for leased assets during periods when no tenants are secured, among others.

– For costs participation in bidding incurred by an unsuccessful bidder, the documentation includes: bidding invitation documents, bid submission documents; contractor selection results (if any); other documents as prescribed by bidding laws (if any).

– Market research expenses, product and service research expenses, and investment costs for the development of new products or services that are unsuccessful or discontinued: A market, product, or new service development research report must be maintained in accordance with Point i.2, Clause 2, Article 9 of Decree No. 320/2025/ND-CP.

– Land rental expenses and infrastructure management and maintenance expenses incurred in economic zones, high-tech parks, industrial parks, industrial clusters, and similar areas where the project has not yet commenced business operations:

+ An investment policy approval decision, investment policy decision, investment registration certificate, or other documents of equivalent legal validity in accordance with investment laws (if any);

+ An agreement or contract for the lease of land and/or infrastructure clearly specifying the amounts payable by the enterprise for land rent and infrastructure management and maintenance expenses.

– Depreciation or gradual expense allocation of assets for lease during vacant periods: documents proving the enterprise’s legal ownership or right to use the assets; management and accounting records for the assets as prescribed.

– Costs of establishment of the enterprise or the enterprise’s branches, dependent units, or business locations; costs of resumption of business operations after a suspension period; costs of premises restoration under contracts before enterprise dissolution or closure of the enterprise’s branch, dependent unit, or business location, the documentation includes:

+ The Certificate of Enterprise Registration, Certificate of Branch/Representative Office Registration, Certificate of Business Location Registration, confirmation of notification of suspension/early resumption of the enterprise/branch/business location; notification of the enterprise’s dissolution or closure of the branch/representative office/business location;

+ In case of costs of restoration of the business premises under the contract before  the enterprise’s dissolution or closure of the branch/representative office/business location, the enterprise shall also provide the record on premises handover before business suspension and the record on premises handover after early resumption of business operation, or the premises handover before and after the enterprise’s dissolution or closure of the enterprise’s branch/representative office/business location.

– Product and service promotion and marketing expenses incurred prior to the commencement of sales: a report on the investment policy for the production of the relevant products or services.

– Expenses incurred for the destruction of damaged, obsolete, expired, or unusable inventories; and for the disposal of raw materials, supplies, and components that are no longer needed:

+ A decision issued by the competent authority within the enterprise approving the destruction of the inventories, raw materials, supplies, or components;

+ An inventory valuation record prepared by the enterprise, clearly stating the reasons for destruction, types, quantities, values, and proposed disposal methods for the inventories, raw materials, supplies, or components concerned, certified, signed, and assumed responsibility for by the enterprise’s legal representative;

+ A decision establishing a Disposal Committee for the destruction of inventories, raw materials, supplies, or components, and the Disposal Committee’s decision on the disposal method.

– Expenses incurred for the destruction of damaged assets or assets that are no longer needed: A decision issued by the competent authority within the enterprise approving the destruction of the assets; an asset valuation record prepared by the enterprise specifying the cause of damage, asset type, quantity, value, and disposal method, certified, signed, and assumed responsibility for by the enterprise’s legal representative; a decision establishing an Asset Disposal Committee; and the Disposal Committee’s decision on the disposal of the assets.

– Expenses incurred for the disposal of scrap materials and defective products generated during the production process: a record confirming the disposal of scrap materials and defective products, prepared by the enterprise and certified, signed, and assumed responsibility for before the law by the enterprise’s legal representative.

1.4. Greenhouse Gas Emission Reduction Expenses

For the first time, the Circular specifically prescribes documentation requirements for expenses related to greenhouse gas emission reduction (Net Zero) and carbon neutrality initiatives. Such expenses must be supported by a specific project or program.

Documentation for expenses related to the reduction of greenhouse gas emissions aimed at carbon neutrality and net zero, reducing environmental pollution, and are related to the enterprise’s production and business activities includes:

– The decision issued by a competent person of the enterprise on reduction of greenhouse gas emissions;

– Dossiers on the project or scheme related to the reduction of greenhouse gas emissions.

1.5. Documentation supporting the authorization of employees to make non-cash payments for transactions of VND 5 million or more

In cases where the enterprise authorizes/assigns an employee to purchase goods/services serving its business operations, the value of the purchase equals or exceeds 05 million VND, with payment made by the employee using a cashless payment service, documentation includes:

– Invoices and proofs of payment as prescribed by regulations of law on accounting and invoicing;

– The enterprise’s financial regulations, internal regulations, or decision on authorizing or permitting its employees to pay for purchases of goods and services serving the enterprise’s business operations; proofs of cashless payment obtained by the employee upon purchase of goods/services with the enterprise’s authorization;

– Proofs of cashless payment when the enterprise reimburses the employee for such purchase;

2. Clear regulations on the timing for determining taxable revenue in certain cases

Article 5 of Circular No. 20/2026/TT-BTC introduces new provisions on the timing for determining revenue for corporate income tax purposes in certain cases, as follows:

2.1. For enterprises established under Vietnamese law

– For exports, the time for determination of assessable revenue shall be the date of ownership transfer under the export contract. If the date of ownership transfer cannot be determined, the time for determination of assessable revenue shall be determined according to the basis for determination of exports as prescribed by customs laws;

– For air transport, the time for determination of assessable revenue shall be the time of completion of the transport service for the buyer;

– For construction and installation (including shipbuilding), the time for determination of assessable revenue shall be the time of acceptance of the construction work, item, installation, regardless of whether payment has been collected or not;

– For electricity and water supply, the time for determination of assessable revenue shall be the date of confirmation of meter reading written on the electricity and water supply invoices.

2.2. For foreign enterprises:

– For capital transfer, the time for determination of assessable revenue shall be the effective date of the initial capital transfer contract;

– For transfer of securities and certificates of deposit, the time for determination of assessable revenue shall be the time of transfer;

– For transfer of derivative securities in the form of futures contracts, the time for determination of assessable revenue shall be either the time when the investor’s buy or sell order for the futures contract is matched on the trading system of the Stock Exchange, or the maturity date of the futures contract.

3. Expansion and Clarification of Tax Obligations for Foreign Enterprises

Article 7 of Circular No. 20/2026/TT-BTC clarifies the tax obligations of foreign enterprises, focusing on modern business activities that were not previously guided under Circular No. 78, including:

– E-commerce and digital platforms: foreign enterprises engaged in e-commerce and digital platform-based businesses, doing business in Vietnam or earning income in Vietnam, with or without permanent establishments in Vietnam, are subject to tax obligations.

– Internal corporate restructuring: exempting tax for intra-group ownership restructuring transactions, provided that such transactions do not result in a change of the ultimate parent company and do not generate income, subject to accompanying conditions regarding book value and succession of obligations.

– Tax calculation method: Corporate income tax is determined as: Taxable revenue × percentage rate (%). If a contract does not separately specify the value of different activities, the highest applicable percentage rate shall be applied to the entire contract value.

4. Management of Expansion Investment Capital and the Science and Technology Fund

Compared with Circular No. 78/2014/TT-BTC, Circular No. 20/2026/TT-BTC introduces several new provisions regarding the management of expansion investment capital and the Science and Technology Fund (S&T Fund), as follows:

– Registration of Expansion Project Capital: Within the year in which the expansion investment project is executed, the enterprise shall send its supervisory tax authority a written notification of the registered capital investment in the expansion investment project together with the CIT settlement return. (Clause 1, Article 8).

–  Assets from the S&T Fund: In cases where fixed assets originated from the enterprise’s science and technology development fund are used by the enterprise for business operations before they are fully depreciated, the remaining value of such fixed assets shall be recorded as other income, may be depreciated and recorded as deductible expense when calculating taxable income. (Clause 1, Article 9).

5. Replacement and Abrogation of Previous Legal Documents

Circular No. 20/2026/TT-BTC takes effect from 12 March 2026, and applies to the 2025 tax period in accordance with Article 10.

The Circular is highly consolidated in nature, as it fully replaces two major previous circulars, namely Circular No. 78/2014/TT-BTC and Circular No. 96/2015/TT-BTC.