What is the remuneration expense under the Ordinance on proceeding costs in Vietnam in 2024?

What is the remuneration expense under the Ordinance on proceeding costs in Vietnam in 2024?

under Article 2 of Ordinance on proceeding costs 2024, remuneration expense is defined as the amount paid to participants in on-site inspections and assessments, people's advocates, witnesses, observers, asset valuers, representatives of organizations conducting assessments, individuals conducting assessments, interpreters, translators, and others participating in court sessions as stipulated in Article 314 of the Criminal Procedure Code when they engage in legal proceedings as required by the competent judicial authorities.

Note: The Ordinance on proceeding costs 2024 will come into effect on July 1, 2025.

What is the remuneration expense under the Ordinance on proceeding costs in Vietnam in 2024? (Image from the Internet)

Are remuneration expenses for the Chairman of the Board of Directors deductible expenses for CIT calculation in Vietnam?

Based on Official Dispatch 80200/CT-TTHT in 2019 regarding remuneration expenses for the Board of Directors issued by the Hanoi Tax Department, it states:

Based on the above regulations, in cases where Import and Export Company JSC of Machines and Accessories (hereinafter referred to as "the Company") pays remuneration to members of the Board of Directors who directly participate in managing production and business activities under the Resolution of the Company’s General Meeting of Shareholders, if this remuneration expense meets the conditions stipulated in Article 4 of Circular 96/2015/TT-BTC dated June 22, 2015, of the Ministry of Finance, it can be included as a deductible expense when determining taxable corporate income.

And under Official Dispatch 85022/CT-TTHT in 2019 concerning deductible expenses for corporate income tax purposes for the remuneration paid to the Board of Directors and the Supervisory Board members who do not manage the Company, issued by the Hanoi Tax Department, it mentions:

Based on the above regulations, in cases where the Company pays remuneration to members of the Board of Directors and members of the Supervisory Board who do not directly manage production and business activities, this expense is not considered deductible when determining taxable corporate income as specified in Clause 2.6, Article 4 of Circular 96/2015/TT-BTC dated June 22, 2015, by the Ministry of Finance.

under these regulations, remuneration paid to the Chairman of the Board of Directors can be included as a reasonable expense for corporate income tax purposes when accompanied by the following documents:

- Payment vouchers;- Resolution of the General Meeting of Shareholders regarding the total remuneration;- Decision of the Board of Directors regarding the remuneration level.

Who decides the remuneration of the Chairman of the Board of Directors of a joint stock company in Vietnam?

under Article 163 of the Law on Enterprises 2020, it is stipulated as follows:

Salaries, Remuneration, Bonuses, and Other Benefits of the Members of the Board of Directors, Director, General Director

1. The company has the right to pay remuneration and bonuses to members of the Board of Directors, and to pay salaries and bonuses to the Director or General Director and other managers under the business results and performance.

2. Unless otherwise stipulated in the company’s charter, salaries, remuneration, bonuses, and other benefits of members of the Board of Directors, Director, or General Director shall be paid as follows:

a) Members of the Board of Directors shall receive work remuneration and bonuses. Work remuneration is calculated based on necessary workdays to fulfill the Board of Directors member's tasks and the remuneration per day. The Board of Directors estimates the remuneration for each member on a unanimous basis. The total remuneration and bonuses of the Board of Directors are decided by the General Meeting of Shareholders at the annual meeting;

b) Members of the Board of Directors shall be reimbursed for reasonable expenses for meals, accommodation, travel, and other reasonable costs related to performing their assigned tasks;

c) The Director or General Director is paid a salary and bonuses. The salary and bonuses of the Director or General Director are decided by the Board of Directors.

3. The remuneration of each member of the Board of Directors, the salary of the Director or General Director, and other managers shall be considered part of the company’s business expenses under the regulations on corporate income tax and must be disclosed as a separate item in the company’s annual financial statements and reported to the General Meeting of Shareholders at the annual meeting.

Thus, the remuneration expense for the Chairman of the Board of Directors of a joint-stock company is decided by the Board of Directors.