Question::
Regarding the commissions we pay for client referrals, we follow the instructions by signing a Brokerage Agreement and pay the broker after deducting 10% personal income tax for submission to the tax authority. Therefore, in the case of paying the broker an amount exceeding 20 million VND, do we have to follow the guidelines in Circular No. 96/2015/TT-BTC – dated June 22, 2015 – Article 4 amending and supplementing Article 6 – TT78/2014-TT-BTC: “c. Expenses, if there is an invoice for the purchase of goods or services each time with a value of 20 million VND or more (including VAT). Payment must be accompanied by non-cash vouchers…”
Answer:
Based on Article 4 of Circular No. 96/2015/TT-BTC dated June 22, 2015, issued by the Ministry of Finance providing guidance on corporate income tax (CIT) (effective from August 6, 2015, and applicable to CIT calculation from 2015 onwards) amending and supplementing Article 6 of Circular No. 78/2014/TT-BTC (as amended and supplemented in Section 2 of Circular No. 119/2014/TT-BTC and Article 1 of Circular No. 151/2014/TT-BTC):
“2. Expenses that are not deductible when determining taxable income include:
…
2.4. Expenses of enterprises purchasing goods and services (without invoices, permitted to prepare a purchase invoice list for goods and services purchased in accordance with Form No. 01/TNDN attached to Circular No. 78/2014/TT-BTC) but not preparing an invoice accompanying the payment to the seller or service provider in cases:
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Purchasing assets or services from households or individuals not directly engaged in sales;
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The purchase invoice list for goods and services is signed and is the responsibility of the legal representative or the authorized person of the enterprise, ensuring accuracy and truthfulness. Enterprises purchasing goods and services are allowed to prepare the purchase invoice list and include it in deductible expenses. These expenses are not required to have non-cash payment vouchers. In cases where the purchase price of goods or services on the invoice list is higher than the market price at the time of purchase, the tax authority shall, based on the market price at the time of purchase of goods or services of the same type or similar on the market, determine the price level to recalculate the deductible expenses when determining taxable income.”
-In the case of your company, as described, which pays a commission exceeding 20 million VND to a broker and has already deducted and paid the 10% personal income tax, the documents and records such as the Brokerage Agreement, payment receipts (whether in cash or non-cash), personal income tax filing documents, and the purchase invoice list for goods and services using Form No. 01/TNDN (issued together with Circular No. 78/2014/TT-BTC) serve as the basis for including these expenses in deductible costs when determining taxable income for corporate income tax (CIT) purposes.
