Official Dispatch 2835: Guidance on Decree 68 Regarding the Increase of Interest Expense Cap

12:15, 10/07/2024

Recently, the General Department of Taxation issued Official Dispatch 2835/TCT-TTKT providing guidelines on the implementation of Decree 68/2020/ND-CP regarding tax administration for enterprises with related-party transactions.

for Enterprises that have declared the tax finalization for the year 2019, they must submit supplementary documentation; in the case that it is not yet time for declaration, implement according to the amended and supplemented provisions stipulated in Decree 68.

Furthermore, this Official Dispatch clearly states that the retrospective handling of controlled interest expenses under the provision of Clause 3, Article 8 of Decree 20/2017/ND-CP for the years 2017, 2018 only applies to the provision at Point a, Clause 3, Article 8 of Decree 20, as amended and supplemented at Article 1 of Decree 68, specifically:

- Raising the cap on interest expense from 20% to 30%;- Applying the method of calculating net interest expense (borrowing interest minus (-) deposit interest, lending interest);- Not applying retrospective treatments to the amended and supplemented provisions at Points (b) (transitional expenses) and (c) (expanding the exemption subjects) in Decree 68 for the years 2017, 2018.

For further details, refer to: Official Dispatch 2835/TCT-TTKT issued on July 14, 2020.

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