On January 05th, 2021, Bac Ninh Tax Department issued Official Letter No. 14/CTBNI-TTHT, whereby:
In case the company purchases apartments for foreign employees (these employees hold the manager position in the Company, and receive the salary in Vietnam under the signed contract with the company), then:
- Incurred payable VAT related to apartment purchasing and other fees related to the use of apartment shall not be deductible, these nondeductible payable VAT will be accounted to taxed expenses for calculating CIT.
- In term of depreciation and other expenses related to the apartment, it shall be deductible for the company if there is suffcient invoices, payment records, dossiers, and asset ownership documents as stipulated by the law, at the same time, purchasing for employees must be specified in the labor contract and the company’s internal regulations.
In terms of depreciation and other expenses related to the apartment, it shall be determined as payable PIT of the employees on the basis of accounted depreciation on the accounting book and the actual payment by the company but it must not exceed over 15% of the total arose payable tax.
