Is a corporate income tax reduction available for employing workers as ethnic minorities in Vietnam?

Is a corporate income tax reduction available for employing workers as ethnic minorities?

According to Clause 2, Article 17 of Decree 218/2013-ND-CP, the regulations on tax reduction in other cases are as follows:

Tax Reduction for Other Cases

1. Enterprises in manufacturing, construction, or transportation that employ from 10 to 100 female workers, where over 50% of the regularly present workforce are female, or regularly employ over 100 female workers where female workers comprise over 30% of the regularly present workforce, are eligible for a corporate income tax reduction equivalent to the additional expenses incurred for employing female workers, including:

a) Retraining costs;

b) Salary and allowances (if any) for teachers in nursery and preschool facilities organized and managed by the enterprise;

c) Additional annual health check costs;

d) Allowances for female workers after childbirth. Based on labor law regulations, the Ministry of Finance cooperates with the Ministry of Labor - Invalids and Social Affairs to specify the allowance level stated in this clause;

dd) Salaries and allowances for the time female workers are on leave post-childbirth or for breastfeeding according to policies while still working.

2. Enterprises employing ethnic minority workers can receive a corporate income tax reduction equivalent to the additional expenses made for ethnic minority workers in vocational training, housing support, social insurance, and health insurance for ethnic minorities in case they are not supported by the state under prescribed policies.

3. Enterprises involved in technology transfer within priority fields to organizations, individuals in economically and socially disadvantaged areas receive a 50% reduction on corporate income tax calculated based on income from technology transfer.

From the above regulation, it can be seen that enterprises employing ethnic minority workers are eligible for a corporate income tax reduction.

Is a corporate income tax reduction available for employing workers as ethnic minorities in Vietnam? (Image from the Internet)

Which expenses for ethnic minority workers are eligible for corporate income tax reduction in Vietnam?

Based on Clause 2, Article 6 of Circular 78/2014/TT-BTC, as amended by Article 4 of Circular 96/2015/TT-BTC, the regulation on deductible and non-deductible expenses for determining taxable corporate income is as follows:

Deductible and Non-deductible Expenses for Determining Taxable Income

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2. Non-deductible expenses for determining taxable income include:

...

2.10. The following deductible expenses, if spent on the incorrect persons, incorrect purposes, or exceed the prescribed limit.

a) Additional expenses for female workers that can be included in deductible expenses include:

- Costs for retraining female workers when the previous profession is no longer appropriate and requires transition to another trade according to the company's development plan.

This expense includes tuition fees (if any) + the difference in rank salary (ensuring 100% salary for those undergoing retraining).

- Salary and allowances (if any) for teachers in childcare facilities organized and managed by the enterprise.

- Costs for organizing additional annual health checks like occupational, chronic, or gynecological examinations for female employees.

- Allowances for female workers after their first or second childbirth.

- Overtime allowances for female workers in cases where, for objective reasons, female employees do not take maternity leave, breastfeeding leave, and continue to work at the enterprise, paid according to current policies; including salaries paid by product when female workers continue working during non-leave periods according to policies.

b) Additional expenses for ethnic minority workers that can be included in deductible expenses include: tuition fees (if any) plus the difference in rank salary (ensuring 100% salary for those undergoing retraining); housing support, social insurance, health insurance for ethnic minority persons in case they are not supported by the state under prescribed policies.

...

Thus, according to the above regulation, additional expenses for ethnic minority workers that can be included in deductible corporate income tax expenses include:

+ Tuition fees (if any) plus the difference in rank salary (ensuring 100% salary for those undergoing retraining);

+ Housing support, social insurance, health insurance for ethnic minority persons in cases where they are not supported by the state under prescribed policies.

Which entity is the corporate income taxpayer in Vietnam?

According to Clause 1, Article 2 of the Enterprise Income Tax Law 2008, corporate income taxpayers include the following subjects:

- Enterprises established under Vietnamese law;

- Enterprises established under foreign laws (hereinafter referred to as foreign enterprises) with or without a permanent establishment in Vietnam;

- Organizations established under the Cooperative Law 2023;

- Non-business units established under Vietnamese law;

- Other organizations conducting production and business activities that generate income.