Question:
Our company previously purchased a 4-seat car valued at 4.5 billion VND (including taxes) for the management department to use for business trips. Due to current financial difficulties, the company has decided to lease this car (the company is not registered for the transportation service business). According to Circular No. 63/2014/TT-BGTVT, it states: ‘Cases not required to obtain a transportation business license are establishments directly using vehicles with a load capacity of less than 10 tons and a quantity of less than 5 vehicles (Article 50 of Circular 63/2014/TT-BGTVT dated November 7, 2014).’ Our company would like to know if this car can be fully depreciated when used for leasing purposes.
Answer:
Based on Article 4 of Circular No. 96/2015/TT-BTC dated June 22, 2015, by the Ministry of Finance, amending and supplementing Article 6 of Circular No. 78/2014/TT-BTC dated June 18, 2014, providing guidance on corporate income tax, which stipulates deductible and non-deductible expenses when determining taxable income, in the case where the company does not have the function of operating a transportation business and purchases a passenger car with fewer than 9 seats to serve the company’s management tasks, the company is only allowed to depreciate the fixed asset into deductible expenses at the original cost of 1.6 billion VND. In the event that the company decides to lease the car, the company is also only allowed to claim depreciation on the fixed asset as an expense at a controlled rate.
