According to Clause 2, Article 9 of the Enterprise Income Tax Law, some expenses are not allowed to be deducted when determining taxable income, specifically as follows:
- Expenditures that do not meet the conditions specified in Clause 1, Article 9 of expenditures that are deductible when determining taxable income of Decree 320/2025/ND-CP.
- Fines for administrative violations include: Violations of traffic laws, violations of business registration regulations, violations of accounting regulations, violations of tax laws including late tax payments as prescribed by the Law on Tax Administration and other administrative violations as prescribed by law.
- Expenditures are offset by other funding sources; expenditures have been spent from the Enterprise's Science and Technology Development Fund, the Enterprise's Science, Technology and Innovation, and Digital Transformation Development Fund.
- Expenditure exceeding the prescribed level for the following expenditures:
+ The part of business management expenses allocated by foreign enterprises to permanent establishments in Vietnam exceeds the calculation level according to the following formula:
Business administration expenses = (Taxable revenue of permanent establishments in Vietnam during the tax period/Total revenue of companies abroad, including revenue of permanent establishments in other countries during the tax period) x Total business administration expenses of companies abroad during the tax period.
+ The cost related to hiring managers for prize-winning electronic game business and casino business exceeds 4% of the revenue of prize-winning electronic game business and casino business;
+ Paying interest on loans of enterprises with related transactions in accordance with the law on tax management for enterprises with related transactions;
+ The expenditure for items of direct welfare nature for employees exceeding 01 month of average salary actually implemented in the tax year, including: Expenses for funerals and weddings of employees themselves and their families; expenses for vacations; expenses for medical examination and treatment support; expenses for learning knowledge supplementation at educational institutions, vocational education activities; expenses for supporting families of employees affected by natural disasters, epidemics, accidents, illnesses; expenses for commending children of employees with good academic achievements;...
In addition, other welfare-related expenses are not deductible when determining taxable income such as:
+ The determination of 01 month of actual average salary implemented in the tax year of the enterprise is determined by the salary fund implemented in the year divided by 12 months.
+ In case the enterprise operates for less than 12 months, the determination of 01 month of actual average salary implemented in the tax year is determined:
Average monthly salary = Salary fund in the year/actual number of months of operation in the year
In which, the salary fund implemented is the total actual salary paid for that year of finalization until the deadline for submitting the final settlement dossier as prescribed (excluding the amount of salary provision for the previous year spent in the tax finalization year).
+ The portion exceeding the level of 05 million VND/month/person to contribute to participate in supplementary pension insurance according to the Law on Social Insurance or funds of social security nature, purchase voluntary pension insurance, life insurance for employees. The portion exceeding the level stipulated by law on social insurance, health insurance to deduct and remit to funds of social security nature (social insurance, compulsory supplementary pension insurance), health insurance fund and unemployment insurance fund for employees.
- Establishment and use of provisions not in accordance with the provisions of law on provisioning: provision for inventory price reduction, provision for losses of financial investments, provision for bad debts, provision for warranty of products, goods, construction works and professional risk provision of appraisal enterprises, independent audit service providers.
