Legal News

[Taxation] General Administration of Taxation regarding vouchers for recording personnel expenses.

2024/08/22

The General Department of Taxation has issued Official Letter No. 3468/TCT-CS dated August 7, 2024 informing Hanoi Tax Department about the deductibility for CIT purposes of labor costs of foreign workers as follows.
Currently, in accordance with Article 3.2 of Circular No. 25/2018/TT-BTC, employee salaries and bonuses are considered non-deductible for CIT purposes unless the eligible conditions and the amount paid are specified in one of the following

・Labor contract
・Collective bargaining agreement
・Financial regulations of the Vietnamese corporation or parent company
・Bonus regulations stipulated by the chairman or president of the Vietnamese corporation based on the financial regulations.

Regarding vouchers for recording labor costs of foreigners working in the form of internal transfers, the GDT asserted that letters of appointment are not appropriate as vouchers for deducting labor costs for CIT purposes in accordance with Official Letter No. 5476/BTC-CST dated May 7, 2020 of the Ministry of Finance. For foreigners working in the form of internal transfers, there is usually no obligation to sign a labor contract with the Vietnamese corporation, but in accordance with the assertion of the DGT, it is necessary to specify the eligibility conditions and the amount to be paid in one of the above documents.

 

References:
Official Letter No. 3468/TCT-CS dated August 7, 2024 of the GDT
Official Letter No. 5476/BTC-CST of the Ministry of Finance dated May 7, 2020
Circular No. 25/2018/TT-BTC