What additional expenses for female employee are included in deductible expenses when determining corporate income tax in Vietnam?

What additional expenses for female employee are included in deductible expenses when determining corporate income tax in Vietnam?

Based on the provisions in Point 2.10, Clause 2, Article 6 of Circular 78/2014/TT-BTC (as amended by Article 4 of Circular 96/2015/TT-BTC), additional expenses for female employee that are included in deductible expenses when calculating CIT include:

- Expenses for retraining female employees in cases where the old occupation is no longer suitable and they must switch to another trade as per the employer's development plan.

This expense includes: tuition fees (if any) + wage grade differentials (ensuring 100% salary for those attending training).

- Salary and allowance expenses (if any) for teachers working at nurseries and kindergartens organized and managed by the employer.

- Expenses for organizing additional health examinations during the year, such as occupational, chronic, or gynecological disease check-ups for female employees.

- Gratuity for female employee after giving birth for the first or second time.

- Overtime allowance for female employees in cases where due to objective reasons the female employee did not take a leave after childbirth or leave for breastfeeding, but stayed to work for the employer and was paid according to current policies; including cases where payment was made per product, and the female employeeer continued to work during the period without leave according to the policies.

Note: In cases of incorrect subject allocation, purposes, or expenses exceeding the prescribed amount, the deductions will not apply when calculating CIT for the year 2024.

What additional expenses for female employee are included in deductible expenses when determining corporate income tax in Vietnam?(Image from Internet)

What expenses are deductible when calculating CIT in Vietnam?

According to Clause 1, Article 6 of Circular 78/2014/TT-BTC (as amended by Article 4 of Circular 96/2015/TT-BTC), the expenses deductible when calculating CIT are:

- Except for non-deductible expenses specified in Clause 2, Article 4 of Circular 96/2015/TT-BTC, employers may deduct all expenses if they meet the following conditions:

+ The expense is actually incurred and related to the production and business activities of the employer.

+ The expense has valid invoices and documents as prescribed by law.

+ For expenses where each purchase of goods or services has an invoice value of 20 million VND or more (including VAT), payment must have non-cash payment documents.

- Non-cash payment documents are implemented according to the provisions of legal documents on value-added tax.

- In case of purchasing goods or services with each invoice having a value of twenty million VND or more noted on the invoice but not yet paid by the time of cost recognition, the employer may deduct the expenses when determining taxable income.

In cases where payment is made and the employer does not have non-cash payment documents, the employer must declare and adjust the reduction of expenses for the value of goods or services without non-cash payment documents for the tax period in which a cash payment occurs (including cases where the tax authority and competent authorities have decided to inspect the tax period arising this expense).

- For invoices of goods and services paid in cash before the effective date of Circular No. 78/2014/TT-BTC, no adjustment is required as per the provisions at this Point.

- In cases where the employer purchases goods and services related to its production and business activities and has an invoice printed directly from a cash register according to the provisions on invoices; if this invoice has a value of 20 million VND or more, the employer bases this on the invoice and non-cash payment documents to calculate deductible expenses when determining taxable income.

- In cases where the employer purchases goods and services related to its production and business activities and has an invoice printed directly from a cash register according to the provisions on invoices; if this invoice has a value under 20 million VND and payment is made in cash, the employer bases it on this invoice and cash payment documents to calculate deductible expenses when determining taxable income.

Are employers that employ many female employees eligible for tax reduction in Vietnam?

According to Clause 1, Article 21 of Circular 78/2014/TT-BTC which regulates other cases of tax reduction as follows:

Other Cases of Tax Reduction

1. employers operating in the fields of manufacturing, construction, and transportation that employ 10 to 100 female employees, with female employees constituting over 50% of the regular workforce, or employ over 100 female employees with females constituting over 30% of the regular workforce are eligible for a reduction in corporate income tax payable corresponding to the actual additional expenses for female employees as guided in Point a, Item 2.9, Clause 2, Article 6 of this Circular if separately accounted.

Public service providers, office agencies of General Corporations not directly engaged in production and business are not eligible for tax reduction as per this Clause.

...

Thus, if an employer operating in the fields of manufacturing, construction, and transportation employs 10 to 100 female employees, with female employees making up over 50% of the regular workforce, or regularly employs over 100 female employees with females constituting over 30% of the employer's regular workforce, it will be eligible for a reduction in CIT payable corresponding to the actual additional expenses for female employees, as guided in Point a, Item 2.9, Clause 2, Article 6 of Circular 78/2014/TT-BTC if separately accounted.

Note: Public service providers, office agencies of General Corporations not directly involved in production and business are not eligible for tax reduction under this regulation.