Is contributions to the Disaster Management Fund of Vietnam deductible when calculating corporate income tax?

Is contributions to the Disaster Management Fund of Vietnam deductible when calculating corporate income tax?

Pursuant to the provisions at Clause 2, Article 12 of Decree 78/2021/ND-CP, voluntary contributions, sponsorships, and supports made by organizations and businesses to the provincial-level Disaster Management Fund of Vietnam shall be considered deductible expenses when determining taxable corporate income.

Thus, contributions to the Disaster Management Fund of Vietnam are deductible when calculating corporate income tax.

Is contributions to the Disaster Management Fund of Vietnam deductible when calculating corporate income tax in Vietnam? (Image from the Internet)

Which entities are eligible for exemption or reduction of payment of contributions to the Disaster Management Fund of Vietnam?

Pursuant to the provisions at Article 13 of Decree 78/2021/ND-CP on subjects eligible for exemption or reduction of contributions to the Disaster Management Fund of Vietnam, they include:

(1) Subjects eligible for exemption from contributions:

- Individuals who benefit from policies for persons with meritorious service to the revolution as stipulated in Article 3 of the Ordinance on Incentives for Persons with Meritorious Service to the Revolution 2020.

- Social protection subjects who are receiving monthly social allowances;

- Non-commissioned officers, soldiers serving in the armed forces on fixed-term service and receiving living allowances.

- Students and pupils studying full-time and long-term at universities, colleges, intermediate schools, and vocational training schools.

- Persons with disabilities or individuals with a reduction of labor capacity from 21% upwards, those suffering from serious diseases or mental illnesses certified by district hospitals or higher.

- Individuals who are unemployed or jobless for six months or more in a year.

- Women raising children under 12 months old.

- Members of households classified as poor or near-poor; members of households in particularly difficult coastal areas, islands, Region III communes, and particularly difficult villages of ethnic minorities and mountainous regions in accordance with Decrees by the Government of Vietnam, Decisions by the Prime Minister of Vietnam, and other relevant legal documents; members of households severely affected by natural disasters, epidemics, fires, or accidents.

- Cooperatives without income sources.

- Domestic and foreign economic organizations in the area that have suffered property, factory, or equipment losses due to natural disasters and have to repair or purchase assets amounting to more than 0.02% of the organization’s total asset value, or have to suspend business for 5 consecutive days or more as certified by the district-level People's Committee or are exempt from corporate income tax.

(2) Subjects eligible for reduction of contributions:

Domestic and foreign economic organizations in the area that are eligible for a reduction in corporate income tax shall also be considered for a reduction in contributions to the provincial-level Fund. The reduction in contributions to the Fund shall correspond to the reduction in corporate income tax announced by the Tax Authority each year.

Who has the authority to decide on exemption and reduction of contributions to the Disaster Management Fund of Vietnam?

Pursuant to the provisions at Article 14 of Decree 78/2021/ND-CP on the authority to decide on the exemption and reduction of contributions to the Disaster Management Fund of Vietnam, it is specified as follows:

Authority to Decide on Exemption, Reduction, Postponement, and Duration of Exemption, Reduction, Postponement

1. The district-level People's Committee is responsible for compiling the list of subjects specified at Points i, k Clause 1 and Clause 2 Article 13 of this Decree and submitting it to the Chairman of the provincial-level People's Committee to decide on the exemption, reduction, and postponement of contributions to the Fund. The postponement duration for contributions to the provincial Fund is from 6 months to 1 year.

2. The commune-level People's Committee is responsible for compiling the list of remaining subjects specified at Clause 1 Article 13 of this Decree and submitting it to the Chairman of the district-level People's Committee to decide on the exemption of contributions.

3. Consideration for exemption, reduction, and postponement of contributions to the provincial-level Fund within a locality shall be conducted once a year at the time of assigning the plan for collection of the provincial Fund. In cases of exemption, reduction, and postponement due to natural disasters, epidemics, organizations, or individuals must report damages and propose to local authorities for synthesis and submission to competent authorities for consideration of exemption, reduction, and postponement. If a subject has already contributed money to the provincial Fund and is then considered for exemption, reduction, or postponement, the previously paid amount shall be deducted from the next year's contribution.

Thus, the authority to decide on exemption and reduction of contributions to the Disaster Management Fund of Vietnam is determined as follows:

- The district-level People's Committee is responsible for compiling the list of subjects specified at Points i and k Clause 1 and Clause 2 Article 13 of Decree 78/2021/ND-CP and submitting it to the Chairman of the provincial-level People's Committee to decide on the exemption, reduction, and postponement of contributions to the Fund. The postponement duration for contributions to the provincial Fund is from 6 months to 1 year.

- The commune-level People's Committee is responsible for compiling the list of remaining subjects specified at Clause 1 Article 13 of Decree 78/2021/ND-CP and submitting it to the Chairman of the district-level People's Committee to decide on the exemption of contributions.