Circular No. 18/2002/TT-BTC dated February 20, 2002 of the Ministry of Finance on corporate income tax providing guidelines for implementation of Decrees of the Government 30/1998/ND-CP dated 13 May 1998 and 26/2001/ND-CP dated 4 June 2001

CIRCULAR

ON CORPORATE INCOME TAX PROVIDING GUIDELINES FOR IMPLEMENTATION OF DECREES OF THE GOVERNMENT 30/1998/ND-CP DATED 13 MAY 1998 AND 26/2001/ND-CP DATED 4 JUNE 2001

PursuanttotheLawonCorporateIncomeTaxpassedbyLegislatureIXofthe NationalAssembly on10May 1997;

Pursuant toDecree30/1998/ND-CPofthe Government dated13May 1998makingdetailedprovisionsforimplementationoftheLawonCorporateIncome Taxand pursuant to Decree 26/2001/ND-CPof theGovernment dated 4June2001amendingaboveDecree30;

TheMinistry of Finance hereby providesguidelines for implementation as follows:

A. APPLICABILITY OF CORPORATE INCOME TAX

I. PAYERS OF CORPORATE INCOME TAX:

Pursuant toarticles 1 and 3 oftheLaw on Corporate Income Taxandarticle 1of Decree 30/1998/ND-CPdated 13 May 1998of the Governmentmakingdetailed provisionsfortheimplementationoftheLawonCorporate Income Tax, thefollowing organizations andindividuals producingandtradinggoodsandservices(hereinaftercollectivelyreferred toasbusinessestablishments)andearningtaxableincomeshallbeliable to paycorporate income tax:

1. Organizationsproducing andtradinggoodsand services:

(a) State owned enterprises, includingState owned business enterprises and State owned public enterprises;

(b) Limitedliability companies, shareholdingcompanies;

(c) Enterprises with foreign owned capital and foreignparties to businessco-operation contracts under theLaw on Foreign Investmentin Vietnam;

(d) Foreign companiesandforeign organizations conducting businessactivitiesinVietnambeyondthescopeoftheLawonForeignInvestmentinVietnam;

(dd) Politicalorganizations, socio-politicalorganizations, socio- professionalorganizationsand unitsof the people s armed forces; administrative and professionalbodiesengaged inproductionandtradingofgoodsandservices;

(e) Co-operatives;co-operationteams;

(f) Private enterprises;

(g) Otherorganizationsengagedinproductionandtradingofgoods and services.

2. Individualsproducing andtrading goodsand services:

(a) Businessindividualsandgroupsofbusinessindividuals;

(b) Individualhouseholds;

(c) Freelancers (directbusiness):medicalpractitioners, lawyers, accountants,auditors,painters,architects,musiccomposersand other freelancers;

(d) Individuals leasing out assets, such ashouses, land,means of transportation,machinery, equipment,andothertypesofassets.

3. Foreign companies conducting business activities through resident establishments inVietnam:

Aforeigncompany shall be considered as conductingbusiness activities through resident establishments inVietnaminthefollowing cases:

(a) The company has in Vietnam branches, operational offices,offices (except for commercial representative offices notpermittedtoconductbusinessbythelawsofVietnam),plants, workshops, warehouses for receipt and delivery of goods,meansof transportation,mines, petroleum or gas fieldsandlocations where natural resourcesare exploredor exploited or equipment and facilities serving the explorationofnatural resources;

(b) Thecompanyhasconstructionsitesorconstruction,installation and assembly works; or conducts supervision activities for constructionorconstruction,installationorassemblyworksin Vietnam;

(c) The company provides services (includingconsultancy services) in Vietnam through its employees orauthorizes another entity toprovide services for oneormoreprojects;

(d) The company has brokerage agents or commission-earningagentsoranyotheragentsinVietnam;

(dd) ThecompanyauthorizesacompetententityinVietnamtoenter intocontractsinthenameofthecompany,oranentitywhichisnot competent to enter into contracts in thenameof the company but has the right to represent the company on a regular basis,to deliver goodsorprovideservicesin Vietnam.

Wherea treatyonavoidanceofdoubletaxationtowhichtheSocialist Republicof Vietnam is a signatory contains different provisions relatingto resident establishments, suchtreaty shallprevail.

4. Foreignersconductingbusiness in Vietnam or havingincome sourced in Vietnam, such as leasing out assets,providing loans,or transferringtechnology.

II. SUBJECTS NOT LIABLE TO PAY CORPORATE INCOME TAX:

1. Co-operatives, groups andother collective economic organizations earning income from activitiesof cultivation, husbandry and aquaculture.

2. Rural family householdsand individuals engaged inagriculturalproduction where thevalueof their commercial products is upto ninety(90)million dong peryearandthey earnincome ofupto thirty six(36)milliondongper year.

III. SUBJECTS TEMPORARILY NOT LIABLE TO PAY CORPORATE INCOME TAX:

Rural family households and individuals engagedin activitiesofcultivation,husbandryandaquaculturewherethevalueoftheircommercialproductsexceedsninety(90)milliondongperyearandthey earn income exceeding thirty six (36)milliondongper year.

B. BASES FOR TAX CALCULATION AND TAX RATES

Thebasesforcalculationofcorporateincometaxasstipulatedinarticle6oftheLawon Corporate Income Taxshallbe taxable income and tax rates.

I.Taxable income (calculated in accordance withtheGregoriancalendar year or the fiscal year)shall compriseincomeearnedfromproduction,businessandserviceactivities,includingincomeearnedfromproduction, trading and service activities conductedoverseas andother taxable income.

In accordance with theprovisions of article 7 of theLaw on Corporate IncomeTax, taxableincome shallbedetermined asfollows:

Taxableincomeinthetaxperiodshallequal(=)turnoverusedtocalculate taxableincomeintheperiodless(-)reasonableexpensesinthetaxperiod plus(+)othertaxableincomeinthe taxperiod.

II. TURNOVER USED TO CALCULATE TAXABLE INCOME:

1. Turnoverused tocalculate taxable income:

Pursuant to article 3of Decree 30/1998/ND-CP and article 1 of Decree 26/2001/ND-CPof the Government dated 4 June2001 amendingDecree30/1998/ND-CPoftheGovernmentdated13May 1998makingdetailedprovisionsforimplementationoftheLawonCorporate IncomeTax, turnoverusedto calculate taxable income shall be total sales revenue, fees for provisionof services (not includingvalue added tax), including price subsidies, additional chargesoradditional excessesearnedby a business establishment.

For example:

A salesinvoiceofEnterpriseA states:

- TurnoverearnedbyEnterpriseAtocalculatetaxableincome is 100,000dong.

Ifabusinessestablishmentpaysvalueaddedtaxcalculateddirectly onthe basis of added value,turnover usedto calculatetaxable income shall be the actualpricepaidby thepurchaserincludingvalue addedtax.

A similar example to above is the caseof Enterprise B in the categoryofthosecalculatingtaxdirectlyonthebasisofaddedvalue andwhichmustuseasalesinvoice. Ifthepaymentpricestatedin suchinvoiceis110,000dong(includingVAT),thatshallalsobethe turnover used for calculationof taxable income.

2. Pointof time for fixing turnover inorder tocalculate taxable income: The point of time for fixing turnover in order to calculate taxable^{incomeisthedatethegoodsorservicesareconsumed,irrespective}ofwhethermonieshavebeen received,specifically:

(a) In respectof goodssatisfying oneof thefollowing conditions:

- Whenthe goodshave, or theirownership has, been transferred;

- WhenthereisaVATinvoice or a sales invoice.

(b) In respectof services satisfying oneofthefollowingconditions:

- Whenthe services arecompleted;

- WhenthereisaVATinvoice or a sales invoice.

Wheremonies are paid for services which the service provider is entitledtoonthebasisofapercentageorlevelofworkcompleted, thenitshalldependonthedateofacceptanceofsuchsumorwhen there isVATinvoiceor a sales invoice.

3. Turnoverusedtocalculatetaxableincomeshallbedeterminedinanumberof specific industries as follows:

(a)With respect togoodssoldbywayofinstalment payments or deferred payment (thepurchaser is notyet the owner), theturnoverusedtocalculatetaxableincomeshallbethesumspayablebythepurchaseronthedatesstipulatedinthecontract, andinsuchcasestheprinciplethatexpensesmustbeconsistentwithturnovershallapplywhendeterminingturnoverandexpenses.

Wheregoods are sold by way of instalment payments or deferred payment and the parties agree that the purchaser becomes the owner, the turnoverongoods soldshall be calculatedonalumpsumpaymentpriceasfromthedatewhen thegoodsarehandedoverorwhenaVATorsalesinvoiceis produced,excludingany interest payable oninstalments or interestondeferredpayment. Insuchcase,interestpayableon instalmentsorinterestondeferredpaymentshallbeaccounted for in income fromfinancialoperations.

(b)With respect togoods orservices used for the purpose of exchangeor donation, the turnover shall be calculated on thebasisofthesellingpriceofproducts,goodsorservicesofthe sameorsimilarkindinthemarketatthetimeofexchangeor donation.

(c)With respect to products usedfor personal consumption, the costs ofproduction of suchproducts.

(d)With respect to processing of goods, the turnover from processing,includingfees,fuel,power,sub-materialsandother expenses required for processinggoods. Turnover shall be fixedwhentheprocessorpreparesaninvoiceatthesametime as the processed goods are transferred to the supplier of materials.

(dd)Withrespecttosalesofgoodsviaanagent,theturnovershallbedetermined when the agentdelivers thegoodsto the purchaserorwhen:

- The agent transfers ownershipto thepurchaser;

-Theagentproducesaninvoice.

Insuchcase,theremustbeawrittenagencycontractbetween theprincipalandagent,andifnot,thendeliveryofgoodstoan agentshallbedeemedto be anormal sale.

(e)Withrespecttoleasingouthousingorassets,theamountofrent collected foreach zeriod underthe lease contract. If alessee paysrentinadvanceforanumberofyears,theturnoverusedto calculatetaxableincomeshallbeallocatedoverthenumberofyearsforwhichpayment hasbeenmadeinadvance.

For example:

EnterpriseA leases a house to Enterprise B for3 years;if the house lease providesthat the lessee must pay rentin advancefor3years,being150milliondong,withthelease effectivefrom1January2001:Ashallaccountforturnover of50millionineachof theyears2001to2003.

(f)Withrespecttolending,interestondepositsandreceiptsfrom finance leasingproductsmeansinterest collectible in anyoneperiod, fixed onthe following principles:

- A credit institution shall account asincome any interest collectible on current debts.Interest on overdue debts shall not be accounted for as income, but should bemonitoredandfollowedupviatheexternalaccountsand whencollected accounted for as professional receipts income.

- Wherecollectibleinterest oncurrentloansisaccounted for as income but the customer doesnot pay it after ninety (90)daysortheloanistransferredtooverduedebtswithinninety(90)days,thecreditinstitutionshallrecordreduced incomeinitsaccountsandmonitorandfollowupviathe external accountsand when collected account for it as professional receiptsincome.

(g) Turnover fromair transportationmeans all sumsthat an enterpriseisentitledtofrompassengertransportationandfrom luggage and cargo transportation after completionof such transportation, irrespective of whether payment is received ornot.Thedatefordeterminingturnoveristhedateonwhich transportationhasbeencompleted.

(h) Turnover from sale of electricitymeans the sum recorded in VATinvoices. Thedate fordetermining turnover is the lastdateon themeter index intheinvoice for electricity, irrespectiveofwhetheritisatthebeginningorendofmonth, andwhatevermonththelastdateonthemeterindexbelongsto shallbedeemedtobethemonthsuchturnover wasreceived.

For example:

An invoice is issued calculating electricity price on the meterindex5Decemberupto5January,turnoverfromthis invoice shall be accounted for in January; if an invoice is issued calculating electricity price onthe meter index 29 Januaryto29February,turnoverfromthisinvoiceshallbe accounted forinFebruary.

For other services,suchas watersupply andpostoffice services, for which this type of invoice is produced, turnover shallbesimilarly calculated.

(i)With respect to insurance and re-insurance operations, the turnovershallbetheamountreceivableforprimarypremiums, assessment fees asagent, reinsurance ceding,commission for re-insurance, and allotheritems.

(k) AbusinessestablishmentreceivingrevenueinforeigncurrencymustconvertitintoVietnamesedongattheaveragetradingrate ontheinter-bankforeigncurrencymarketasannouncedbythe StateBankonthedatewhensuchrevenueinforeigncurrency arises. ForeigncurrenciesforwhichtheStateBankmakesno announcement of exchange ratemust be first converted into UnitedStatesdollarsandthenconvertedintoVietnamesedongat the rate stipulated inCircular 77-1998-TT-BTC of theMinistryofFinancedated6June1998onExchangeRatesTo Be Usedin EnterpriseAccounting.

III. REASONABLE DEDUCTIBLE EXPENSES FOR PURPOSE OF CALCULATION OF TAXABLE INCOME:

Pursuant to article 9of theLaw onCorporate Income Tax,article 4 of Decree30/1998/ND-CPdated 13May1998 ofthe GovernmentmakingdetailedprovisionsforimplementationoftheLawonCorporateIncomeTax,andarticle1ofDecree26/2001/ND-CPoftheGovernmentdated4 June2001amendingDecree30/1998/ND-CPoftheGovernmentdated13May1998,reasonableexpensesrelatingtotaxableincomeinataxperiod shallbeprovided for indetailas follows:

1. Depreciation offixed assets:

Inprinciple,anitemfordepreciationoffixedassetsmaybeincluded inreasonableexpenseswhencalculatingCITifthesetwoprinciples are followed:

- The fixed assetsmust have properandcomplete invoices and vouchersprovingownershipof thebusinessestablishment;

- The fixed assetsmust beusedfor production, business and serviceactivitiesormustproducetaxableincomeandtheymust be depreciated in accordance with the current regulations onmanagement, useand depreciationof fixed assets issued with Decision166-1999-QD-BTC of theMinister of Finance dated 29December1999.

WheretheVietnamesepartycontributesthevalueoflanduserights tolegalcapitalorthecapitalofabusinessco-operationcontractwith aforeignparty,thevalueoflanduserightsmustbefullydepreciated from the time when theforeign invested enterprise orbusiness co- operationcontractcommencesproduction,businessorservicestothe end oftheproject.

2. Costsofrawmaterials,fuel,powerandgoodsusedforproduction,business and service activities relating to the turnover and taxable incomeoftherelevantperiod,calculatedonthebasisofreasonable consumptionlevelsand actualex-workprices:

(a) Reasonablematerial consumptionlevels:

- Directorsofenterprisesshallestablishandapprovematerial consumption levels based on thematerial consumptionlevelsissuedbythecompetentauthorityandthespecificsituation of each enterprise. In respectof enterprises with boardsofmanagement, the general director shall establishmaterialconsumptionlevelsforsubmissiontotheboardofmanagement for approval;

- At the end of each year, enterprises shall finalizematerial consumption, ensure that the approvedmaterial consumptionlevelshavenotbeenexceeded,andinformthe tax officethereof.

(b) Actualex-workpricesshallinclude:

- Pricesofmaterialspurchasedfromoutsideshallincludethe pricestatedintheinvoiceoftheseller(notincludingvalue added tax)pluscostsofpurchase,such ascosts oftransportation,loadingandunloading,preservation,insurancepremiums,wastagefees,rentalofwarehousesand fees for selectionand reprocessing;and inthe case of importedgoods,whengoods are imported they shall be accounted for inexpenses at the price actually paid consistentwiththeforeigntradecontractplusimportduties, special sales taxor additionalcharges(if any):

- Ifabusinessestablishmentdeclaresapricetocalculate importduty,namelythecontractprice,whichishigher thanthepriceactuallypaid,thenthepriceactuallypaid shall betaken;

- Ifabusinessestablishmentdeclaresapricetocalculateimportduty, namely the contractprice, which is lower thanthe price actuallypaid, the business establishmentmay only include in expenses the price it declared to calculateimport duty.

- Inrespectofmaterialsusedtomanufactureproductswhich arenotsubjecttovalueaddedtaxoronwhichvalueadded tax calculateddirectlyhasbeenpaid, the actual ex-work priceshall includevalueaddedtax.

- In respect of self-produced materials, the actual ex-work price ofmaterials plustheactual costsincurred duringthe self-production process.

- Inrespectofmaterialsprocessedoutside,theactualex-work priceofmaterials to be processed plus the costs of processingand costsof transportationand loadingand unloadingfrom the warehouseof the enterprise to the processinglocationandfromtheprocessinglocationtothe warehouseoftheenterprise.

The prices ofmaterials andcosts ofprocessing,transportation,loading,unloading,preservationandprocurementlistedabovemustbesupportedbyinvoicesand vouchersinaccordancewithregulationsoftheMinistryof Finance.

- Inrespectofmaterialsandgoodsbeingagricultural,forestry oraquatic products,unprocessedaquatic products, soil, stone, sand, gravel or scrapsold without invoices, enterprises shallprepare a list specifying fullnames and addresses of sellers, quantity ofgoods, unitprice andtotal costs;directorsshallapprovethecostsandshallbelegally liable forthem.

- Ifabusinessestablishmentdeclaresapurchasepriceonthe list which ishigher than themarketprice at thedateofpurchase, the taxoffice shall relyon the latter to fix the price for determining expenses for determining taxable income.

- If a business establishmentpays taxby the tax creditmethod,thenitsdeductibleexpensesshallnotincludeVAT. FormaterialsandgoodsforwhichthedeductibleinputVAT is zero (0)per centof a sales invoice and listof goods purchased,thebusinessestablishmentmayonlyaccountfor expensesofproductionand businessinorderto calculate taxable income by thepurchased turnover less (-)VAT already deducted.If abusiness establishment pays taxby thedirectmethod, thenits expenses shall includeVAT.

3. Costsofsalaries,wages,mid-shiftmeals,andpaymentsinthenatureof salary:

Costs of salaries ofenterprisesshall include salaries, wagesand allowancesinthenatureofsalarypaidtoemployeeswhoparticipate inthebusinessoperationsofenterprises.

Costs of salaries ofenterprises, including salaries, wages and allowancesinthenatureofsalaryandwagespayabletoemployees, in each typeof enterpriseshall bedetermined asfollows:

(a) In respect of State owned enterprises, salaries shall be determinedbased on:

- Circular18-1998-TTLT-BLDTBXH-BTCoftheMinistryof Labour,WarInvalidsandSocialAffairsandtheMinistryof Finance dated 31 December 1998 providing guidelines on determiningwagesfundswhenStateownedenterprisesareunable to guaranteepaymentof taxes andprofit;

- Circular19-1999-TTLT-BLDTBXH-BTCoftheMinistryof Labour,WarInvalidsandSocialAffairsandtheMinistryof Financedated14August1999amendingCircular18-1998- TTLT-BLDTBXH-BTC of the Ministry of Labour, War Invalidsand SocialAffairs andtheMinistry of Finance dated31December 1998;

- Circular05-2001-TT-BLDTBXHoftheMinistryofLabour, WarInvalidsandSocialAffairs dated29 January2001on salary unit prices in State ownedenterprises;

- Circular06-2001-TT-BLDTBXHoftheMinistryofLabour, WarInvalidsandSocialAffairs dated29 January2001on labour productivity increase rates and average salary rise rates in State ownedenterprises;

- Any other current legal instruments of competent State bodies.

(b) Inrespectofotherbusinessestablishments: Salaries,wagesand payments in the natureof salary and wages payable toemployees shall be determined in accordance with one of the followingmethods:

- Where a business establishmenthas established salaryunitpricesonthebasisoflevelswhichareconsistentwithsalary unitpricesandvolumesofworkcompletedasinthecaseof Stateownedenterprises,theymaypaysalariesaccordingto theirownsalaryunitprices;

- Where a business establishmentpays salaries pursuant to labour contracts or acollective labour agreement, then salaries and wagesshall be determined in accordance with suchlabourcontractsor collective labour agreement;

- In theabove cases ofpayment of salaries, business establishmentsshallregisterwiththetaxofficewherethey register topay CIT as well as lodgingannual CIT declarations. Theirdeclarationof registrationmust contain:

- Forbusinessestablishmentswhichhaveestablishedtheir own salary unit prices, theymust use the same form stipulated for State ownedenterprisesin Circular05-2001-TT-BLDTBXHX-BTCoftheMinistryofLabour, WarInvalidsandSocialAffairsdated29January2001;

- Forbusinessestablishmentswhichpaysalariespursuant tolabourcontractsoracollectivelabouragreement,theymustregistertheirwagesplanspecifying:actualnumber of employees in the previous year; forecast number in the yearof theplan; actual wages fund in theprevious year;forecastwagesintheyearoftheplan;regulations onpayment ofsalaries;minimumandmaximumwage; when promotion isconsidered; and other provisions in their regulations onpaymentofsalaries;

- Where business establishmentsdo not register wages withthetaxoffice,finalizationofCITshallbebasedon the average income for eachtradeorindustryinthelocality asdecidedby thepeople s committeeof the provinceorcity undercentralauthority inordertofix the maximum expenses for wages which can be accounted for in reasonable expenses when calculating taxable income.

Taxation Departments shall, on the basisof the salary regime applicabletoStateownedenterprisesandthecostoflivingin their respective localities,discuss with theprovincialormunicipal labour office the determination ofaverage salaries, wages and allowances in the nature of salary and wages for each tradeand industry, which shall then be submitted to the provincial ormunicipal people s committee for decision for applicationin taxcalculationineachperiod.

The following shall notbe includedin costsof salaries and wages:

- Salaries and wages ofowners ofprivate enterprisesandheads of individual households conducting production,businessandservice activities;

- Salaries and wagesof foundersof companies who are not directlyinvolvedinthemanagementofproduction,business and service activities. Salaries and wagesof foundersof

companieswhoaredirectlyinvolvedinthemanagementofproduction,businessandserviceactivitiesshallbeincluded inwages inexpenses.

(c)Mid-shiftmealsforemployeesshallbedecidedbydirectorsof enterprises in accordance with production and business efficiency,buttheexpensesforeachemployeeshallnotexceed theminimumsalary stipulated by theState for State employees.

4. Actualexpensespaidforscientificandtechnologicalresearch,except wherefundsareprovidedbytheStateorasuperiormanagingbody;innovations and initiatives, environmentalprotection; funding internal education,health care and training ofenterprises; whichshall notexceedonepointthree(1.3)timestheexpenselevelsstipulated by the State. Expenses for externaleducation assistance,such as contributionsto study encouragement fundsandcontributionsto schools for handicappedchildren orchildren without support, shall dependontheproductionorbusinesssituationofeachenterprisebut lawfulsourcedocumentsshallberequired. Expensesforinnovations andinitiativesaresubjecttotheconditionthattheyresultinbusiness efficiencyandthat thereis asystemformanaging them.

5. Costsof hiredservices:

(a) Costs of electricity, water,telephone calls, office stationery, auditing,andinsuranceofassetsshallbesupportedbyinvoices and vouchersas stipulated bytheMinistryof Finance.

(b) Costs ofmajor repairsof fixed assets in order to recover capacityof assets shallbe included in the production and businesscostsofthe year. Wherethe costs of a single repair are excessive,they shallbe allotted forthe following year. In respect of special fixed assets which require periodical repair, enterprisesmay planforcosts formajor repairs in production and business costs based on the estimated budget for major repairsofenterprises. Wheretheplannedamountislowerthan the amountactually paidfor a repair,enterprises shall be permittedtoaddtheexcessiveamounttotheircosts;whereitis higher, thecosts of theyearshall be reducedaccordingly.

(c) Costs ofpurchaseand useof technical documents, patents, technology transfer licences, trademarks, and so forth, not formingpartofthefixedassetsshallbeallocatedgraduallyto businesscosts.

(d) Rentforfixedassetsshallbeaccountedforinproductionand businessexpensesandshallbetheamountactuallypaidunder thelease. Ifitispaidonceinadvanceforanumberofyears,it shall beallocatedgradually toproductionandbusinessexpenses overthenumberofyearsofuseofthefixedassets.

(dd) In respectof contractors,costs of hired servicesshall include payments tosub-contractors(ifany).

(e) Travel allowances for leave:

- Forstaffofenterprisesworkinginmountainousregionsor onislandswhoaregrantedannualleaveinaccordancewith regulationsuponissuanceofacertificatebytheheadoftheoffice, workshop or entity tovisit lovedones (including parents, spouseorchildren);

- Forstaffofenterprisessatisfyingtheconditionsforannual leave in accordance with regulations upon issuance of a certificatebythehead of theoffice,workshop or entityto visitlovedones(includingparents,spouseorchildren)who are ill, have beeninvolved in an accident and require treatment, orwherethereisadeathinthe family.

(f) Othercosts of hiredservices.

6.Paymentsmade to female employees in accordance with law; expensesfor occupational safetyprotection;expensesfor maintenanceofsecurityofbusinessestablishments,contributionsto social andmedical insurance funds and trade unionexpenses in accordancewithapplicableregulations.

Contributions tomanagement funds ofcorporations shall be approvedandnotified by boards ofmanagementof corporationsuponapprovalinwriting of the competent financialbody.

Expensesfor uniforms forstaff of establishments where the staff wearastandard uniformshallnotexceeda maximumof five hundredthousand(500,000)dongperpersonperyear,andanyexcessmustbepaid fromafter-taxprofits.

7.Paymentof intereston loansborrowed from credit institutions andothers at the actual interest rate when a loan contract was signed, whichmustnotexceedtheceilinginterestrateoflocalcommercial banksatthetimetheloanmoniesareused(received)undertheloan contracts.

Paymentof interest on loans for contribution to legal capital or chartercapitalofforeigninvestedenterprisesshallnotbeincludedin reasonable expensesforthe purposeof determination of taxable income.