Requirements for tax deductible expenses in identifying enterprise income tax

Expenses for activities of Party Organizations and social-political Organizations in the enterprise are subtracted from a company’s income before it is subject to enterprise income tax. Photo: Hong Nu.

According to the General Department of Taxation, as stipulated in Government Decree No. 98/2014 / ND-CP on the establishment of political institutions, political and social organizations of enterprises in all economic sectors: the expenses of business supporting the activities of Party organizations, political and social organizations are counted as deductible expenses when determining taxable income of enterprises. Accordingly, those expenses are subtracted from a company’s income before it is subject to taxation.

Circular No. 96/2015 / TT-BTC dated 22-6-2015, the Ministry of Finance also guides: enterprises will be deducted those expenses if they can submit sufficient invoices as prescribed by law.

According to the General Department of Taxation, businesses deduct from payments if they meet the following requirements: actual expenses incurred are related to the production and business of enterprises; Expenses with legal bills and documents as prescribed by law; expenses which are valued at 20 millionvndor more(included Value Added Tax) for each payment of purchase or service must be paid by vouchers. Non – cash payment is not accepted in such cases.

The General Department of Taxation also recommended that with the expenses for the activities of Party organizations, political and social organizations of enterprises, the Tax Department must consult the Department of Finance and report to relevant Parties such as: Confederation of Labour, Youth Union, etc… in order to implement appropriate measures in line with the regulations on the financial management of these organizations and the provisions of the tax Law.