Procedures for the some deductible expenses in Vietnam

In realiality, an enterprise has many expenses when their accountants perform Corporate income tax (CIT). Howerver, According to the Regulation of Taxation, In order to recogise as the deductible expenses, your company always prepare sufficient procedures for those expenses. With a combination between ES NETWORKS VIET NAM and CONG MINH TAX AGENCY, we introduce the sufficient Procedures for the some duductible expenses in Vietnam to help all ccountants be able to caculate exactly the CIT of their company.

1.Procedure for materials and merchandises buying.

With domestic buying:

– Contract

– VAT invoice or direct invoice

– Bank remittance evidence for an invoice with total amount over 20 million VND.

With international buying:

- Merchandises buying contract, Goods processing contract, Services contract.

- Customs declaration with customs clearance confirmation

- Bank remittance evidence

- Commercial invoice

- Import duty payment evidence

2.Procedures for materials and merchandises selling.

With domestic selling:

– Contract.

– VAT invoice or direct invoice

With international selling:

- Merchandises buying contract, Goods processing contract, Services contract.

- Customs declaration with customs clearance confirmation

- Debit advice from the Bank for receiving money from partner

- Commercial invoice

- Export duty payment evidence

3.Procedures for salaries and wages:

As deductible expense for salaries and wages, procedures needed:

– Labour contract

– Copy of Identification

– Salary and bonus scheme

– Collective labour agreement (If any)

– Salary increase decision (In case salary increase)

– Monthly timesheet.

– Payroll sheet

– Pay scales self-constructed by enterprise.

– Payroll payment evidence (by remittance or by cash with signature)

– Personal income tax code (List of employees having PIT code)

With seasonal worker need:

– If company does not deduct 10% of their income as PIT liability, they need sign in Commitment form 23/BCK-TNCN.

With subcontract need:

– Subcontract

– Handover minutes

– Acceptance minutes

– Payment evidence

4.Allowances for employees

Allowances for employees includes Petrol, Telephone, uniform, lunch allowance.

– Allowances need to be regulated in one of the following documents:

+ Labour contract.

+ Collective labour agreement

+ Finance regulation

– Payment evidence for employees

5.Procedures for Diem expense:

– Business trip decision: Clearly cited Name of person, reason of the trip, time and transportation mean.

– Travel documents with company’s confirmation about destination, time schedule.

– Invoices and documents for the trip: Air ticket, Train ticket, Room renting, Taxi invoice,….

6.Procedure for recording increasing or decreasing in fixed asset.

a/ Procedure for recording increasing in fixed asset :

– Purchasing contract and liquidation of contract

– Invoice

– Fixed asset handover minutes

– Payment evidence

If construction the extra procedures needed

– Construction settlement agreement

– Acceptance minutes, handover minutes.

b/ Procedure for recording decreasing in fixed asset :

– Asset liquidation and removing decision

– Asset selling contract and liquidation of contract

– Invoice

– Asset handover minutes

– Payment evidence

c/ Procedures for fixed depreciation.

– Fixed asset depreciation registration.

– Fixed asset depreciation sheet.

7.Procedure for air ticket buying

If company buying air ticket itself:

– Electronic air ticket

– Boarding pass

– Non cash payment evidence

If boarding pass could not be collected:

– Electronic air ticket

– Business trip decision

– Non cash payment evidence

If air ticket being bought by Individual (Individual ATM or Credit/debit card payment then reimburse later)

– Electronic air ticket

– Boarding pass

– Business trip decision

– Company regulation that regulating about using individual card for travel expense payment and reimburse later

– Non cash payment evidence.

8.Welfare expenses as death, marriage, birthday, holiday expenses

With holiday expense

– Contract and liquidation of contract.

– List of employees

– Decision of Board of directors regarding holiday and Budget approval decision.

– Invoices for the holiday period

– Payment evidence.

With death, marriage, birthday, expenses for employees’ children

– Finance regulation, Collective labour agreement

– Payment request from Trade union, human resource department or employees representative.

– Payment evidence

– Copy of Death certificate, Marriage certificate… or other related documents

9.Purchasing cost when buying directly from Individual or Personal business with revenue under 100 million VND.

– These costs include:

+ Office and house renting costs, Car renting from personal business with total revenue under 100 million VND

+ The cost of buying products, goods, services that being produced directly by individual

– Procedures for these costs:

+ Form 01/TNDN attached with Circular 78/2014/TT-BTC

+ Buying contract, Renting contract

+ Payment evidence.

10.Procedures for capital contribution by assets.

a.Capital contribution by other entity:

+ Capital contribution minutes.

+ Asset valuation reports with the confirmation of representative by both parties

+ Asset handover minutes.

+ Asset procedures (Original).

+ Ownership right transfer procedures (If any).

+ Other related procedures

b.Capital contribution by Individual.

+ Capital contribution certificate

+ Asset handover minutes

+ Asset valuation report by Board of Management, Members of Board.

+ Ownership right transfer procedures (If any).

+ Other related procedures