Conditions for expenses deducted when calculating corporate income tax

The Lao Dong Newspaper Legal Consulting Office replied:

Clause 1, Article 9 of Decree 320/2025/ND-CP detailing a number of articles and measures to organize and guide the implementation of the Law on Corporate Income Tax (effective from December 15, 2025 and applicable from the corporate income tax calculation period in 2025) stipulates as follows:

1. Except for the expenditures not deducted as prescribed in Article 10 of this Decree, enterprises are allowed to deduct expenditures when determining taxable income if they meet the conditions in points a, b and c below:

a) The actual expenditure arising in connection with the production and business activities of enterprises, including the additional expenditure amount deducted at a percentage of the actual expenditure arising in the tax calculation period related to the research and development activities of enterprises;

a1) The cost arising in the tax calculation period related to the research and development activities of enterprises shall be included in the fully deducted cost not exceeding 200% of the actual cost for this activity (excluding the expenditures specified in Clause 3, Article 10 of this Decree) arising in the tax calculation period at enterprises;

a2) The determination of the level of expenditure deducted for research and development activities specified in this point must ensure that after applying the additional expenditure level, the enterprise does not suffer losses;

a3) The determination of the actual costs arising in the tax calculation period related to research and development activities specified in this point shall comply with the provisions of the law on science, technology and innovation;

b) The expenditure item has sufficient invoices and documents as prescribed by law.

In the following cases: Buying products of agricultural, forestry and fishery products from manufacturers, catching and selling directly; buying handmade products made with belts, bamboo, rattan, rattan, buttocks, clouds, straw, coconut shells, coconutskulls or raw materials taken from agricultural products of handmade manufacturers directly sold; buying scrap from people directly collected; buying household appliances and assets of households and individuals directly sold; buying goods and services of individuals and business households (excluding the above cases) with a revenue level below the threshold of revenue subject to value added tax must have a payment document according to the provisions of law on accounting, invoices, and documents for sellers (for cases of goods and services values per day of each household, from 05 million or more, the buyer must pay according to the list of goods and services or must be responsible for the buyer's responsibility to sign the contract or the buyer's responsibility to sign the contract;

c) Expenditures with non-cash payment documents in cases of purchase of goods, services and other payments each time with a value of VND 05 million or more. Cashless payment documents are implemented according to the provisions of legal documents on value added tax.

c1) In case of purchasing goods and services from a seller with a value of less than 05 million VND but buying many times in the same day with a total value of 05 million VND or more, it will only be included in the deductible expenses in case there are non-cash payment documents;

c2) In case the enterprise incurs expenses authorized by the enterprise/grants to employees directly purchasing goods and services to serve the production and business activities of the enterprise with VND 05 million or more and these expenses are paid by employees through non-cash payment services, the expenses will be deducted if the following conditions are met: Having invoices and documents according to the provisions of the law on accounting, invoices, documents and financial regulations or the enterprise's internal regulations or decision regulating the authorization or allowing employees to pay for goods and services to serve the enterprise's production and business activities and this expense will then be repaid by the enterprise to employees;

c3) In case of purchasing goods and services worth VND 05 million or more each time, but at the time of recording the cost, the enterprise has not paid, the enterprise will be included in the cost to be deducted except when determining taxable income. In case of payment to a business without a non-cash payment document, the business must declare and adjust the cost reduction for the value of goods and services without a non-cash payment document in the tax calculation period that arises cash payment (including in cases where the tax authority and competent authorities have decided to inspect and check the tax calculation period that arises this cost).

Thus, from December 15, 2025, the expenses deducted when calculating corporate income tax must meet the above conditions.