Newsletter

Official Letter No 650/CT-TT&HT (OL 650): Corporate income tax (CIT) policies on overtime expenses, lunch allowance and house rent

On 16^th January 2019, Binh Duong Department of Taxation issued OL 650 and answered on a specific case with the following content:

A company pays overtime salary to its employees. If such overtime is legally allowed according to the labour regulations, the expense is actually paid to employees, and such expense is supported by adequate documents, following prevailing CIT regulations, overtime salary is considered as deductible expense for CIT purpose.

In case the Company pays lunch allowance for its employees by cash and such allowance does not exceed the maximum amount (VND 730,000/month) as stated in Article 22 of Circular No. 26/2016/TT-BLDTBXH dated 1^st September 2016 (issued by the Ministry of Labour and Social Affairs), this expense is considered as deductible expense for CIT purpose.

In case the Company signs labour contracts with employees, stating that the house rent and meal expenses are borne by the Company, and these expenses are supported by sufficient documents by following the prevailing regulations, these expenses are considered as deductible for CIT purpose.

Official Letter No. 2866/ CT-TTHT (OL 2866): Invoice with incorrect issue date is still valid for CIT deduction

On 18^th January 2019, Hanoi Department of Taxation issued OL 2866 and answered on a specific case with the following content:

A Company purchased services/goods from a vendor and received a VAT invoice. However, the invoice was not issued at appropriate date as stated in Point a, Clause 2 of Article 16 of Circular 39/2014/TT-BTC dated 31st March 2014 issued by the Ministry of Finance. In this case, if this expense has been actually incurred for business purpose and is supported by adequate evidence following the prevailing tax regulations, this expense is considered as deductible expense for CIT purpose.

Official Letter No. 2779/CT-TTHT (OL 2779):  Personal income tax (PIT) policy regarding overtime pay received oversea

On 23^rd January 2019, Hanoi Department of Taxation issued OL 2779 with the following content:

In case an individual receives night shift salary or overtime salary from oversea, the received salary amount which is higher than the salary received for working in day shift or during business hours, is exempted from PIT.

The method to determine PIT exempted income for this case is same as when an individual receives night shift salary/overtime salary in Vietnam.