Question:
Every year, in the locality where our company is headquartered, various organizations, social groups, and armed forces come to our company to request sponsorship or financial support for charitable purposes, educational and healthcare initiatives, disaster relief, the construction of charitable houses, and humanitarian projects. Our company would like to inquire: If these expenses are supported by complete documentation, is our company allowed to incur them and include them in deductible expenses when calculating CIT? What constitutes valid documentation?
Answer:
In accordance with Article 4 of Circular No. 96/2015/TT-BTC dated June 22, 2015, issued by the Ministry of Finance, which amends and supplements Article 6 of Circular No. 78/2014/TT-BTC dated June 18, 2014, providing guidance on CIT, it is specified which expenses can be deducted and which cannot be deducted when determining taxable income for CIT: In the case of the company providing assistance to the local community, supporting social organizations, or engaging in charitable activities, these expenses are not considered deductible when determining taxable income for CIT.. However, expenses related to sponsorship of education, healthcare, disaster relief, charitable housing construction, and poverty alleviation, as long as they are incurred correctly for the designated purposes and are supported by complete documentation as stipulated in Point 2.22, 2.23, 2.24, 2.25 of Article 4 of Circular No. 96/2015/TT-BTC issued by the Ministry of Finance, can be included in deductible expenses when calculating CIT.
