Vietnamese
Every accountant must determine deductible expenses and non-deductible expenses in order to ensure the right tax amount and enterprise's benefits. Deductible expenses for determining taxable income are defined in the following post.
Deductible expenses for determining taxable income
Pursuant to Article 1, Circular No. 96/2015/TT-BTC, enterprises are deducted from the expenses if satisfying all the conditions as follows:
(1) Actual expenses arising in relation to production and business activities of enterprises.
(2) Expenses with adequate lawful invoices and documents as required by law;
(3) For expenses for the purchase of goods or services with invoices valued at VND 20 million or more (VAT-inclusive prices) each, there must be non-cash payment documents.
Therefore, enterprises are deducted all the expenses if the actual expenses arising n relation to production and business activities and have adequate lawful invoices and documents as required by law;
Non-cash payment documents must comply with legal documents on value-added tax such as payment documents via banks and other non-cash payments.
In case of purchase of goods or services valued at VND 20 million or more per invoice but, by the time of recording expenses, enterprises have not paid any money yet, they may still account for such expenses as deductible expenses for determining taxable income.
When making such payment without non-cash payment documents, enterprises shall declare and reduce expenses for the value of goods or services without non-cash payment documents in the tax period in which they make the cash payment (even when tax agencies and functional agencies have issued inspection or examination decisions with regard to the tax period in which such payment is made).
In case an enterprise purchases goods or services for its production and business activities and has an invoice printed by the cash register under the law on invoices, if the value on the such invoice is VND 20 million or more, based on this invoice and the non-cash payment document, the enterprise may include such value in deductible expenses when determining taxable income
In case an enterprise purchases goods or services for its production and business activities and has an invoice printed by the cash register under the law on invoices, if the value on the such invoice is under VND 20 million, based on this invoice and the cash payment document, the enterprise may include such value in deductible expenses for determining taxable income.
Other deductible expenses for determining taxable income
Pursuant to Article 4, Circular No. 96/2015/TT-BTC, besides the deductible expenses above, there are a number of other deductible expenses as follows:
(1) In case an enterprise has expenses related to the value of uncompensated losses caused by a natural disaster, epidemic, fire or other force majeure events, it may include these expenses in deductible expenses for determining taxable income, specifically as follow:
- The enterprise shall determine by itself under regulations the total value of losses caused by natural disaster, epidemic, fire or other force majeure events.
- The value of uncompensated losses caused by natural disaster, epidemic, fire or other force majeure events is the total value of losses minus compensations paid by insurers or other organizations and individuals in accordance with law
(2) Particularly, fixed assets serving workers of enterprises may be depreciated and included in deductible expenses for determining taxable income as follows:
- Mid-shift rest houses and canteens, locker rooms, toilets, infirmaries, and vocational training facilities, libraries, kindergartens, gyms, and equipment and furniture qualified as fixed assets installed in these works;
- Clean water tanks, and garages;
- Commute cars, houses for workers;
- Expenses for the construction of physical foundations and for procurement of machinery and equipment being fixed assets for organizing vocational training activities.
Here are the deductible expenses for determining taxable income.
