Question:
Regarding the company’s purchase of an apartment for its executives (with invoices and complete contracts), can the expenses for buying this apartment be depreciated as fixed assets? Can the VAT tax be deducted?
Answer:
– Based on Point 2, Article 11 of Circular No. 92/2015/TT-BTC dated June 15, 2015 of the Ministry of Finance amending and supplementing Point 1, Section D of Point 2, Article 2 of Circular No. 111/2013/TT-BTC dated August 15, 2011 guiding Personal Income Tax (PIT).
– Based on Article 4 of Circular No. 96/2015/TT-BTC dated June 22, 2015 of the Ministry of Finance guiding Corporate Income Tax (CIT), which stipulates deductible and non-deductible expenses when determining taxable income.
- In the case presented, where the company purchases an apartment for the residence of its executives (with the company listed as the owner), the depreciation of the apartment can be included as deductible expenses when determining the taxable income subject to CIT (if the conditions for deductibility are met). The input VAT recorded on the VAT invoices when purchasing the apartment can be claimed as input VAT deduction if it satisfies the conditions for input VAT deduction as specified in Point 1, Article 14 of Circular No. 219/2013/TT-BTC.
- The costs of apartment depreciation and other incurred expenses such as electricity, water, etc., must be included in the individual employee’s taxable income for Personal Income Tax (PIT) purposes, following the guidelines in Point 2, Article 11 of Circular No. 92/2015/TT-BTC.
