Question:
Mr. A is the head of Branch of Company B (a warehouse) in Binh Dinh. He signed a land lease contract to build a warehouse. The construction permit was applied for under Mr. A’s name. The invoices and documents for expenses incurred during the warehouse construction (invoices bearing the name of Company B) meet the requirements for deduction as costs for Company B?
Answer:
Based on Article 1, Article 6, and Article 4 of Decree No. 78/2014/TT-BTC dated June 18, 2014, of the Ministry of Finance (amended and supplemented by Article 4 of Decree No. 96/2015/TT-BTC dated June 22, 2015, of the Ministry of Finance) guiding corporate income tax (CIT), specifying deductible and nondeductible expenses.
Based on Circular No. 39/2014/TT-BTC dated March 31, 2014, of the Ministry of Finance guiding invoices and documents.
=> In principle, for costs to be eligible for deduction when determining corporate income tax (CIT) taxable income, they must have complete invoices and documents as required by law, serving the production and business activities of goods and services, and have payment documents as prescribed.
In the case where Mr. A is an individual who signed the land lease contract and the construction permit for the warehouse, and all invoices and documents for the warehouse construction are in the name of Company B, these expenses cannot be deducted as costs when determining CIT taxable income for Company B.
Question: Our company specializes in manufacturing animal feed, and we export these products to the Cambodian market. At the end of the year, all contracts include discounts for customers if they achieve a certain sales volume. Can the portion of the discounts, as indicated in an agreement, invoice, and the amount of the discount paid by the company through bank transfer to the customer’s account, be considered valid expenses?
Answer:
Based on Article 22 of Article 7 and Article 16 of Decree No. 219/2013/TT-BTC dated December 31, 2013, of the Ministry of Finance guiding value-added tax (VAT).
Based on Point 2.5 of Appendix 4 issued with Circular No. 39/2014/TT-BTC dated March 31, 2014, of the Ministry of Finance guiding invoices for the sale of goods and provision of services.
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) amending and supplementing Article 6 of Decree No. 78/2014/TT-BTC (amended and supplemented by Article 2 of Article 6 of Decree No. 119/2014/TT-BTC and Article 1 of Decree No. 151/2014/TT-BTC).
According to the above guidelines: In the case of the company exporting goods to the Cambodian market and offering trade discounts to customers based on achieving a certain sales volume in the economic contract signed between the two parties, the amount of the discount for the sold goods is adjusted on the invoice for the last purchase or subsequent period. If the discount amount is established upon the completion of the discount program (period), an adjusted invoice should be issued along with a list of invoice numbers that need adjustment, the adjusted amounts, and the adjusted tax amounts as prescribed. Based on the adjusted invoice, the company should declare a reduction in sales revenue and not include it as a deductible cost when calculating corporate income tax (CIT). The value-added tax input corresponding to the trade discount for foreign customers is not deductible, nor is it eligible for value-added tax refund as per regulations
