According to Official Letter No. 14112/CTHN-TTHT dated March 22, 2024, in response to the letter from the Joint Stock Securities Company of Vietnam Bank for Industry and Trade regarding expenses for members of the Board of Directors ("BOD"), the Hanoi Tax Department provides guidance as follows:
1. Expenses (salaries, remuneration, and other monetary/non-monetary benefits considered as salaries or remuneration) for BOD members who do not directly participate in the management of production or business operations are not deductible expenses unless they are determined as taxable corporate income.
2. Expenses for BOD members who directly participate in the management of production or business operations are deductible expenses if they meet the following conditions:
- There is valid written evidence recording the conditions and amount of salaries or remuneration received. Specifically, these expenses must be clearly recorded in one of the following documents: Labor contract, Collective labor agreement, Financial regulations of the Company, etc.;
- Comply with other regulations on deductible expenses: actual expenses; have sufficient legal invoices, documents; if the value exceeds 20 million VND (including VAT), there must be non-cash payment documents;
- Do not fall under cases where expenses are not deductible when determining taxable corporate income as prescribed.
The basis for this Official Letter includes:
- Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance guiding personal income tax;
- Circular No. 96/2015/TT-BTC dated June 22, 2015 of the Ministry of Finance guiding corporate income tax;
- Circular No. 25/2018/TT-BTC dated March 16, 2018 of the Ministry of Finance amending Circular No. 96/2015/TT-BTC.
Comment: