When shall enterprises employing a large number of female laborers be entitled to CIT reductions in Vietnam?

When shall enterprises employing a large number of female laborers be entitled to CIT reductions in Vietnam?

Based on Clause 1, Article 21 of Circular 78/2014/TT-BTC, it is stipulated that enterprises may receive tax reductions if they use a large number of female laborers in the fields of production, construction, transport, but must meet the following conditions:

Enterprises operating in the fields of production, construction, transport that employ from 10 to 100 female laborers, where the number of female employees constitutes more than 50% of the regular workforce, or employ more than 100 female laborers where female employees make up more than 30% of the regular workforce, are eligible for corporate income tax reductions corresponding to the additional expenditures for female laborers as guided in Subparagraph a, Point 2.9, Clause 2, Article 6 of Circular 78/2014/TT-BTC, revised by Article 4 of Circular 96/2015/TT-BTC if these are separately accounted for.

Where:

Based on Subparagraph a, Point 2.10, Clause 2, Article 4 of Circular 96/2015/TT-BTC specifies the additional expenses for female laborers that qualify as deductible expenses, including:

- Expenses for retraining female laborers in cases where their previous occupations are no longer suitable and need to be converted to another occupation according to the enterprise's development plan.

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

- Wage and allowance expenses (if any) for teachers teaching at nurseries and kindergartens organized and managed by the enterprise.

- Expenses for additional health check-ups throughout the year, such as occupational diseases, chronic diseases, or gynecological check-ups for female employees.

- Nutrition allowances for female employees after their first or second childbirth.

- Overtime allowance for female laborers in cases where for objective reasons the female employee does not take a leave after childbirth, leave for breastfeeding, but remains to work for the enterprise, paid according to current policies; including cases of product-based salary where female employees continue to work during the non-leave period according to policies.

Note: Public service providers and office agencies under corporations that do not directly engage in production or business are not eligible for tax reduction under Clause 1, Article 21 of Circular 78/2014/TT-BTC.

When shall enterprises employing a large number of female laborers be entitled to CIT reductions in Vietnam? (Image from the Internet)

What percentage of female laborers represents “a large number” for enterprises in Vietnam?

According to Article 74 of Decree 145/2020/ND-CP, the specific regulation regarding employers employing a large number of female laborers is as follows:

- An enterprise with 1,000 or more female laborers.

- Or if the number of female laborers in the enterprise constitutes a high percentage of the total workforce, according to the following levels:

+ From 10 to under 100 female laborers, where the female laborers constitute 50% or more of the total workforce.

+ From 100 to under 1,000 female laborers, where the female laborers constitute 30% or more of the total workforce.

Is the extra allowance for female employees after giving birth deductible when calculating CIT in Vietnam?

Based on Subparagraph a, Point 2.10, Clause 2, Article 4 of Circular 96/2015/TT-BTC which provides specific provisions as follows:

Amendment and supplement to Article 6 of Circular 78/2014/TT-BTC (amended and supplemented in Clause 2, Article 6 of Circular 119/2014/TT-BTC and Article 1 of Circular 151/2014/TT-BTC) as follows:

...

2.10. The following deductible expenses, but if not incurred on the correct target, not for the correct purpose, or the amount exceeds the regulation:

a) Additional expenses for female laborers included in deductible expenses include:

- Expenses for retraining female laborers in cases where their previous occupations are no longer suitable and need a change to another occupation according to the enterprise's development plan.

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

- Wages and allowances (if any) for teachers teaching at nurseries and kindergartens organized and managed by the enterprise.

- Expenses for additional health check-ups throughout the year, such as occupational diseases, chronic diseases, or gynecological check-ups for female employees.

- Extra allowances for female employees after their first or second childbirth.

- Overtime allowances for female laborers in cases where, for objective reasons, the female employee does not take leave after childbirth, or leave for breastfeeding, but remains to work for the enterprise, paid according to current policies; including product-based wages where female laborers continue to work during the non-leave period according to policies.

....

Thus, according to the above regulation, extra allowance for female employees after giving birth after the first or second childbirth are deductible when calculating CIT if the expense does not exceed the regulation.