Are enterprises employing many female employees eligible for corporate income tax reduction in Vietnam?

What is an employers having large numbers of female employees in Vietnam?

According to Article 74 of Decree 145/2020/ND-CP, an employers having large numbers of female employees is defined as an employer falling into one of the following categories:

- Employing from 10 to under 100 female employees, in which the number of female employees accounts for 50% or more of the total number of employees.

- Employing from 100 to under 1,000 female employees, in which the number of female employees accounts for 30% or more of the total number of employees.

- Employing 1,000 female employees or more.

Are enterprises employing many female employees eligible for corporate income tax reduction in Vietnam? (Image from the Internet)

Are enterprises employing many female employees eligible for corporate income tax reduction in Vietnam?

Based on Clause 2, Article 83 of Decree 145/2020/ND-CP, the policies supporting employers using many female employees are as follows:

Support Policies for Employers

1. Employers investing in the construction of kindergartens, preschools, healthcare facilities, cultural facilities, and other welfare works meeting the conditions regarding scale and standards as prescribed in policies encouraging private investment will enjoy the incentives according to those policies concerning activities in education, vocational training, healthcare, culture, sports, and the environment.

In case of investing in housing construction for employees, the employer is entitled to incentives as prescribed in the Housing Law.

In case of investing and organizing kindergartens and preschools, they can be exempted from or reduced from renting facilities.

2. Employers are supported by the State as follows:

a) Employers using many female employees are eligible for tax reduction as prescribed by tax law;

b) Additional expenses for female employees, ensuring gender equality and preventing sexual harassment at the workplace stipulated in this Decree, are deductible expenses when determining taxable corporate income under the Ministry of Finance's regulations.

Additionally, Clause 1, Article 21 of Circular 78/2014/TT-BTC provides regulations on tax reduction cases for enterprises employing many female employees as follows:

Other Tax Reduction Cases

1. Enterprises operating in the fields of production, construction, and transportation employing from 10 to 100 female employees, where the number of female employees constitutes over 50% of the regularly present workforce, or enterprises regularly employing over 100 female employees with the number of female employees making up over 30% of the regularly present workforce are eligible for corporate income tax reduction equivalent to additional actual expenses for female employees as instructed at Sub-section a, Point 2.9, Clause 2, Article 6 of this Circular, if separately accounted.

Public service providers, office agencies under corporations not directly involved in production and business do not receive tax reduction as per this Clause.

2. Enterprises employing ethnic minority employees receive corporate income tax reduction equivalent to additional actual expenses for ethnic minority employees as instructed at Sub-section b, Point 2.9, Clause 2, Article 6 of this Circular, if separately accounted.

3. Enterprises transferring technology in prioritized fields to organizations or individuals in areas with difficult socio-economic conditions are entitled to a 50% reduction in corporate income tax on income from technology transfer.

From the above regulations, it is clear that enterprises employing many female employees are eligible for corporate income tax reduction if they meet the following conditions: Enterprises in the fields of production, construction, and transport employing from 10 to 100 female employees, where the number of female employees constitutes over 50% of the total regularly present workforce, or regularly employing over 100 female employees with the number of female employees accounting for more than 30% of the total regularly present workforce, are eligible for corresponding corporate income tax reduction equivalent to additional actual expenses for female employees if separately accounted.

Vietnam: What additional expenses for female employees are deductible?

According to Point 2.9, Clause 2, Article 6 of Circular 78/2014/TT-BTC, additional expenses for female employees that are deductible from corporate income tax include:

- Costs for retraining female employees when their previous occupation is no longer suitable and they must switch to another according to the enterprise's development planning.

+ These costs include: tuition fees (if any) + wage level difference (ensuring 100% salary for those undergoing training).

- Wages and allowances (if any) for teachers in kindergartens and preschools organized and managed by the enterprise.

- Costs for additional health checks throughout the year, such as occupational disease examinations, chronic illness checks, or gynecological checks for female employees.

- Remuneration for female employees after childbirth on the first or second occasion.

- Overtime allowances for female employees if, for objective reasons, they do not take leave after childbirth, breastfeeding but continue to work for the enterprise and are paid according to current policies; even in cases where wages are paid based on products, if female employees continue working during periods not taken as leave per policies.