Company expenses in Vietnam.

In the course of their operating activities, companies in Vietnam reduce their tax base through expenses. Let’s take a closer look at exactly what expenses can be taken into account in Vietnam.

Accounting expenses in Vietnam

Types of expenses:

1. Expenses for the purchase of raw materials or materials for production;

2. Payment of loans;

3. Purchase of movable and immovable property, equipment (in this case, expenses are taken into account based on property depreciation rates established by law);

4. Payment for rent of premises (for confirmation you must attach: lease agreement, owner ID, confirmation of payment, confirmation of payment of taxes from the owner);

5. Costs for electricity and water in rented premises (a lease agreement is required);

6. Costs of repairing the rented premises (this must be indicated in the lease agreement);

7. Payment of wages (with forms on payments made with signatures of employees);

8. Payments for employees in addition to wages - compensation for lunches, uniforms, telephone, overtime, social insurance payments - (all these conditions must be specified in the employees’ employment contract);

9. Social and household expenses for employees, such as: holidays, New Year's gifts, gifts for holidays, festivals, travel, study assistance, assistance to victims of natural disasters, floods (all these conditions must also be specified in the employment contract);

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10. Exchange differences;

11. Cost of raw materials and goods damaged due to expiration or natural disasters (in order to include this part in expenses, a written explanation of the damage to the goods is required; an inventory report);

12. Administrative expenses (meetings, catering, hotels, taxis, car rental, gifts);

13. Advertising expenses.

Important information: expenses greater than or equal to 20 million VND (~800USD) must go through the company's bank account. If the amount is less, you can pay in cash or from a personal bank account.

EXPENSES-EXCEPTION (to support local producers, rural and marine industries)

14. Purchasing goods that are seafood or agricultural products directly from a fisherman or farmer;

15. Buying handicrafts such as: jute, sedge, bamboo, straw, coconut shells directly from the people who produce these products;

16. Expenses for the purchase of land, sand and gravel from private individuals;

HOW TO ACCOUNT FOR EXPENSES-EXCEPTION

1. Prepare a list of purchase and sale of goods, compiled according to a special form. This list is signed by the legal representative or authorized person from the enterprise;

2. Seller provides photo identification (ID). These expenses do not require bank payment documents; they can be paid in cash.

We have not provided the entire list of expenses that can be accepted for tax deduction. We just listed the most common ones.

Are you doing business in Vietnam, but don’t know how to properly register or account for company expenses? Contact us now. 

Nine Points Consulting serves more than 100 companies with foreign investments in Hanoi, Ho Chi Minh City and other cities in Vietnam! Our specialists well understand the intricacies of accounting in Vietnam and are ready to share their experience.