Provision for bad debts are allowed to be made and recorded as deductible expenses when calculating corporate income tax in cases where prepayment has been made but the supplier has not completed the service provision.

On November 20, 2023, Binh Duong Provincial Tax Department issued Official Dispatch No. 29951/CTBDU-TTHT, whereby:

​ In case the Company has signed a contract with a supplier to construct a fire protection system, the construction has been completed and paid 70% of the contract value in advance, but up to now, have not been completed acceptance and payment of the remaining 30% of the contract value, and the Company cannot contact the supplier, the Company shall make a provision for bad debts according to the provisions of Clause 2, Clause 3, Article 6. Circular No. 48/2019/TT-BTC dated August 8, 2019 of the Ministry of Finance. In case the Company wants to delete bad debts from the accounting books and account them as deductible expenses when calculating corporate income tax, the Company must make provision for bad debts in accordance with regulations and fully implement procedures according to Article 6, Circular No. 48/2019/TT-BTC.