What are conditions for charitable expenses to be deductible when determining taxable corporate income in Vietnam?

What are conditions for charitable expenses for education, healthcare, disaster recovery to be deductible when determining taxable corporate income in Vietnam?

According to Official Dispatch 31943/CTHN-TTHT in 2022 on deductible expenses for charitable expenses issued by the Hanoi Tax Department, the guidance is as follows:

For contributions to education, healthcare, disaster recovery, construction of gratitude houses, houses for the needy, great unity houses; contributions for scientific research, contributions for policy beneficiaries as prescribed by law, contributions under state programs for localities in regions with particularly difficult socio-economic conditions through agencies and organizations with the function of mobilizing contributions according to the law, the company can account these as deductible expenses when determining taxable personal income if the contribution is made to the correct recipient and has sufficient documentation to identify the contribution as prescribed in sub-items a, b of points 2.22, 2.23, 2.24, 2.25, 2.26 Clause 2 Article 6 Circular 78/2014/TT-BTC (as amended in Article 4 of Circular 96/2015/TT-BTC) mentioned above.

What are conditions for charitable expenses to unions and social organizations to be deductible when determining taxable corporate income in Vietnam?

According to Official Dispatch 31943/CTHN-TTHT in 2022 on deductible expenses for charitable expenses issued by the Hanoi Tax Department, the guidance is as follows:

For donations to unions, social organizations, and charitable expenses that do not meet the conditions specified in Article 4 of Circular 96/2015/TT-BTC, they are not considered deductible expenses when determining taxable personal income.

What are conditions for charitable expenses to be deductible when determining taxable corporate income in Vietnam? (Image from the Internet)

Which expenses are non-deductible when determining taxable corporate income in Vietnam?

According to Clause 2 Article 9 of the Law on Corporate Income Tax 2008, when determining taxable corporate income, the following expenses are non-deductible:

- Expenses that do not meet the conditions specified in Clause 1 Article 9 of the Law on Corporate Income Tax 2008 (as amended by Clause 3 Article 1 of the Law on Amendments to Tax Laws 2014), except for the part of the value of losses due to natural disasters, epidemics, and other force majeure events that are not compensated;

- Penalties for administrative violations;

- Expenses covered by other funding sources;

- Portions of business management expenses allocated by foreign enterprises to permanent establishments in Vietnam that exceed the amount calculated according to the allocation method prescribed by Vietnamese law;

- Portions of expenses exceeding the legal limit on provision funds;

- Excessive material, fuel, energy, and goods costs beyond consumption limits established by enterprises and notified to the tax authorities as per actual warehouse dispatch prices;

- Loan interest payments for business loans from subjects not being credit institutions or economic organizations exceeding 150% of the base interest rate announced by the State Bank of Vietnam at the time of the loan;

- Depreciation of fixed assets not in compliance with legal regulations;

- Pre-appropriated expenses not in compliance with legal regulations;

- Salaries and wages of private enterprise owners; remunerations paid to business founders not directly involved in business management; salaries, wages, and other remunerations accounted for payment to employees but not actually paid or without proper invoices and documents as prescribed by law;

- Loan interest payments for corresponding undrawn charter capital;

- Deductible input value-added tax that has been credited, value-added tax paid under the credit method, and corporate income tax;

- Advertising, marketing, promotion, brokerage commission, reception, celebration, conference, marketing support, cost support, payment discount; complimentary newspapers and magazines of press agencies directly related to business activities exceeding 10% of total deductible expenses; for newly established enterprises, the excess portion is 15% during the first three years from establishment.

Total deductible expenses do not include the expenses stipulated in this section; for trade activities, total deductible expenses do not include the purchase prices of sold goods;

- Sponsorship expenses, except for those for education, healthcare, disaster recovery, and gratitude houses for the needy in accordance with legal regulations.