Expenditures for employees are not deducted when calculating corporate income tax

The Lao Dong Newspaper Legal Consulting Office replied:

Article 10, Decree 320/2025/ND-CP detailing a number of articles and measures to organize and guide the implementation of corporate income tax laws (effective from December 15, 2025 and applicable from the 2025 corporate income tax calculation period) stipulates the expenses that are not subject to except when determining income subject to corporate tax as follows:

8. Payment to employees in one of the following cases:

a) Pay salaries, wages and other payables to employees of enterprises that have been accounted for in production and business expenses during the period but have not actually paid or do not have payment documents as prescribed by law;

b) Salary, wages, and bonuses for employees are not specifically stated in one of the following documents: Labor contract or document of a foreign enterprise sending a person to work in Vietnam (in cases where foreigners are transferred or moved within the Group, between the parent company and the subsidiary); Collective labor agreements; Financial regulations of the Company, Corporation, or Group; Bonus regulations prescribed by the Chairman of the Board of Directors, General Director, or Director according to the financial regulations of the Company, Corporation, or Group.

b1) In case the enterprise signs a labor contract with a foreigner, which includes an allowance for tuition for children of foreigners studying in Vietnam according to the preschool to high school level paid by the enterprise with salary and wages and full invoices and documents according to regulations, it will be included in the expenses deducted when determining the income subject to corporate income tax;

b2) In case the enterprise signs a labor contract with the employee, which includes an allowance for housing pay paid by the enterprise to the employee, this payment has the nature of salary, wages and has full invoices and documents according to regulations, it will be included in the expenses deducted when determining the income subject to corporate income tax;

b3) In case a Vietnamese enterprise signs a contract with a foreign enterprise, it clearly states that a Vietnamese enterprise must bear the costs of accommodation for foreign experts during their working period in Vietnam, the rental rent for foreign experts working in Vietnam paid by a Vietnamese enterprise shall be included in the costs deducted when determining the income subject to corporate income tax;

c) Pay salaries, wages and allowances payable to employees but the deadline for submitting tax settlement documents for the actual year has not been paid; except in cases where the enterprise has set up a reserve salary fund. The annual reserve level is decided by the enterprise but not exceeding 17% of the implementation salary fund.

The provision of a reserve salary fund must ensure that after being set aside, the enterprise does not suffer any losses, if the enterprise loses, it cannot be deducted in full 17%. In case the previous year the enterprise had a reserve salary fund but after 6 months from the end of the tax calculation period the enterprise had not used it or did not use the reserve salary fund, the enterprise must calculate the cost reduction for the following year;

d) Salary and wages of private business owners and company owners with limited liability of one member owned by an individual; remuneration paid to founders and members of the board of members and the board of directors for whom they are not directly involved in production and business operations;

d) The cost of clothing in kind for employees without invoices or documents. The cost of clothes in cash for workers exceeds 05 million VND/person/year.

In case the enterprise has to pay in clothes in both cash and in kind to the employees to be included in the deducted costs, the maximum expenditure for cash expenditure shall not exceed VND 05 million/person/year, in kind must have invoices and documents;

e) spending on initiatives and improvements for which enterprises do not have specific regulations on spending on initiatives and improvements and do not have a council to accept initiatives and improvements;

g) Expenditures for allowances for means of transport on leave not in accordance with the provisions of the Labor Code;

h) Allowances for employees on business trips, travel expenses and accommodation rental for employees on business trips if there are full invoices and documents, are included in the expenses, except when determining taxable income. In case the enterprise sends employees to work (including domestic work and overseas work) if there are costs of VND 05 million or more arising and these costs are paid by individuals through non-cash payment services, it is determined that the conditions are the form of non-cash payment of the enterprise and is included in the cost deducted if the following conditions are met: Having invoices and documents according to the provisions of the law on accounting, the law on invoices and documents delivered by the supplier of goods and services; the enterprise has a decision or document sending employees to work; the financial regulations or internal regulations of the enterprise allowing employees to pay business fees and buy tickets for personal transportation by non-cash payment services and the enterprise then pays the employees.

In case the enterprise has a travel allowance, accommodation, allowance for employees on business trips and complies with financial regulations or internal regulations of the enterprise, it will be included in the expenses deducted from the travel allowance, accommodation, and allowance;

i) The following expenses are deducted but if they are not paid to the right subjects or for the wrong purposes:

i1) Additional expenses for female workers, including: Expenses for vocational training for female workers in cases where the old job is no longer suitable and they have to switch to another job according to the development plan of the enterprise, including tuition fees (if any) plus salary difference in salary scale (guaranteed 100% salary for those going to school); salary and allowances (if any) for teachers teaching at kindergartens and kindergartens organized and managed by enterprises; expenses for organizing additional health check-ups during the year such as vocational health check-ups, chronic diseases or gynecology for female workers; allowances for female workers after giving birth; overtime allowances for female workers in cases where female workers do not quit after giving birth, leave children but stay at work for the enterprise are paid according to current policies, including the salary regime for women who are still on leave;

i2) Additional expenses for ethnic minority workers included in the deductible expenses include: Tuition fees (if any) plus salary difference of salary scale (guaranteed 100% of salary for those going to school); housing support, social insurance, health insurance for ethnic minorities in cases where the State has not supported them according to the prescribed regime;

k) Payment of unemployment benefits, severance pay, compensation, and benefits to employees who have suffered work-related accidents or occupational diseases not in accordance with regulations;

l) Cost of purchasing golf course membership cards, cost of playing golf.

Thus, from December 15, 2025, the above expenses for employees are not subject to corporate income tax.