Vietnam: Non-deductible expenditures when calculating taxable income

- Fines for administrative violations;

- The expenditures that are covered by other budgets;

- The administrative expense allocated by the foreign enterprise to the permanent establishment in Vietnam that exceeds the limit imposed by Vietnam’s law.

- The extra expenditure according to the laws on making provision;

- The expenditure on interest on loans that are not given by credit institutions or economic organizations and exceed 150% of basic interest rates announced by the State bank of Vietnam when the loan is taken.

- Improper depreciation of fixed assets;

- Improper accrued expenses;

- Wages and remunerations of owners of private enterprises; wages of founders that do not participate in business management; wages, remunerations, and amounts payables to the employees that are not actually paid or do not have invoices according to law;

- The expenditures on loan interests corresponding to the charter capital deficit;

- Deducted input VAT, VAT paid using the deduction method, enterprise income tax;

- The expenditure on advertising, marketing, promotion, commissions, receptions, conferences, support for marketing and expenditures directly related to business that exceed 15% of the deductible amount. The total deductible amount does not include the expenditures in this Point; for commercial activities, the total deductible amount does not include the purchase prices of goods;

- Sponsorships, except for sponsorships for education, health, scientific research, disaster recovery, houses of unity, houses of gratitude, houses for beneficiaries of social policies according to law, sponsorships for localities facing extreme socio-economic difficulties according to state programs;

- Voluntary payments to retirement funds or social security funds, payments for voluntary retirement insurance for employees that exceed the limits imposed by law;

- Expenditures on businesses: banking, insurance, lottery, securities, and some other special businesses specified by the Minister of Finance.

View more details at  the Law on the amendments to the Law on Enterprise Income Tax 2013 of Vietnam and the Law on Amendments to Tax Laws 2014.

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