Newsletter

Tax policy

Enterprises with many investment projects in the same province must keep accounting record separately for each project; Exchange rate differences during the investment phase of forming fixed assets are allocated no more than 5 years after the fixed assets are completed and put into use.

On 20 December 2023, Hai Duong Tax Department issued Official Letter No. 17075/CTHDU-TTHT on accounting and corporate income tax as follows:

– In case the Company has many different investment projects in the same province and the Company only uses one accounting book system for one annual accounting period. The accounting of new projects must be tracked separately. Based on the accounting system of the Enterprise Accounting Regime, Circular No. 200/2014/TT-BTC, the Company should consider applying the detailed the accounting system in accordance with production, business characteristics, and management requirements of the Company.

– In case the Company’s project is in the investment phase to form fixed assets, and there is an exchange rate difference when paying in foreign currency or when re-evaluating liabilities in foreign currency at the end of the fiscal year, when the fixed assets are completed and put into use, this exchange rate difference (after net-off the increase and decrease of differences) is gradually allocated to financial income or financial expense, and the allocation period must not exceed 5 years from the time the project is put into operation. In case the Company incurs expenses that are not corresponding to taxable revenue, these expenses are not deductible when determining taxable income for CIT purposes.

Tax policy on cash support for physical and sports activities for company’s employees

On 7 December 2023, Hai Phong Tax Department issued Official Letter No. 6443/CTHPH-TTHT answering the tax policy as follows:

– Regarding Corporate Income Tax (CIT): In case the Company organizes physical training and sports activities for its employees, this expense is a deductible expense when calculating corporate income tax if it meets condition in Article 4 of Circular No. 96/2015/TT-BTC dated 22 June 2015, Clause 2 of Article 3 of Circular No. 25/2018/TT-BTC dated 16 March 2018 of the Ministry of Finance and the total amount of these expenses during the year must not exceed 01 monthly actual average salary in the Company’s tax year.

– Regarding Personal Income Tax (PIT): In case the Company provides cash support for physical training and sports activities for its employees, if the invoice is not named any specific employee, this support is not included in taxable income when calculating personal income tax.

Input VAT of damaged goods that are not compensated by insurance company, destroyed goods due to low quality or expiration can be deducted, and expenses are included in deductible expenses when calculating CIT

On 20 December 2023, the General Department of Taxation issued Official Letter No. 5829/TCT-CS on tax policy as follows:

In principle, businesses are entitled to deduct input VAT for damaged goods that are not compensated by insurance company, and destroyed goods that have low quality or expired goods as well as include it in deductible expenses for CIT purposes. The enterprises must keep a complete record, invoices, and other necessary documents.