Tiếng Việt
中文May a company purchase health insurance for employees’ relatives?
Whether a company may purchase health insurance for employees’ relatives is governed by Article 34 of the Law on Insurance Business 2022, as follows:
Insurable interests of life insurance contracts and health insurance contracts
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1. The policyholder has an insurable interest in the following persons:
a) The policyholder themselves;
b) The policyholder’s spouse, parents, and children;
c) Biological siblings or other persons having a nurturing or support relationship with the policyholder;
d) Persons having a financial interest or labor relationship with the policyholder;
dd) A person who agrees in writing for the policyholder to purchase health insurance for them.
2. At the time of entering into the insurance contract, the policyholder must have an insurable interest.
Accordingly, as a matter of insurance principle, a company may purchase health insurance for an employee’s relatives if that person agrees in writing, under point dd, Clause 1, Article 34 of the Law on Insurance Business 2022.
Are health insurance expenses for employees’ relatives deductible for corporate income tax?
Current legal framework: The Law on Corporate Income Tax 2025 (No. 67/2025/QH15, effective from 01/10/2025, applicable from the 2025 tax year) has replaced the Law on Corporate Income Tax 2008; Decree 320/2025/ND-CP (issued 14/6/2025, effective from the signing date, applicable from the 2025 corporate income tax year) provides implementing guidance. Circulars guiding the 2008 Law (Circular 78/2014/TT-BTC, Circular 96/2015/TT-BTC, Circular 25/2018/TT-BTC) are no longer applicable bases for tax years from 2025 onwards.
Conditions for deductible expenses under Clause 1, Article 9 of Decree 320/2025/ND-CP are as follows:
Deductible expenses in determining taxable income
1. Except for non-deductible expenses prescribed in Article 10 of this Decree, enterprises may deduct expenses in determining taxable income if all conditions in points a, b, and c below are met:
a) The expense actually arose in connection with the enterprise’s production and business activities;
b) The expense is supported by sufficient invoices and vouchers as prescribed by law;
c) The expense is supported by non-cash payment vouchers for purchases of goods, services, and other payments of VND 05 million or more per transaction.
Note that the current threshold for non-cash payment vouchers is VND 05 million per transaction or more, no longer VND 20 million as under the old guidance.
The cap on welfare-natured expenses directly for employees under point d, Clause 4, Article 10 of Decree 320/2025/ND-CP is as follows:
Non-deductible expenses in determining taxable income
4. The excess over the prescribed level for the following expenses:
[…]
d) The portion of expenses of a welfare nature directly for employees exceeding 01 month of average actual salary in the tax year, including: funeral and wedding expenses for employees and their families; vacation expenses; medical examination and treatment support; study knowledge support; support for employees’ families affected by natural disasters, epidemics, accidents, or illness; rewards for employees’ children with good academic achievements; holiday travel support for employees; accident insurance expenses (excluding compulsory accident insurance as prescribed by specialised law), health insurance, and other voluntary insurance for employees (except contributions to supplementary pension insurance under the Law on Social Insurance, life insurance purchased for employees, and voluntary pension insurance for employees as guided in point dd of this clause) and other welfare-natured expenses.
The 01 month of average actual salary in the tax year is determined by dividing the actual salary fund in the year by 12 months; where the enterprise operated for fewer than 12 months, by the actual months of operation in the year.
Accordingly, for health insurance expenses for employees’ relatives:
- The list of insurance in point d, Clause 4, Article 10 of Decree 320/2025/ND-CP only mentions health insurance and other voluntary insurance for employees; insurance for employees’ relatives is not in this list;
- Such expenses, if recorded as welfare attached to employees, must be considered within the total welfare-natured expenses directly for employees, not exceeding 01 month of average actual salary in the tax year;
- They must also fully meet the conditions in Clause 1, Article 9 of Decree 320/2025/ND-CP: actually arising in connection with production and business activities; sufficient invoices and vouchers; non-cash payment vouchers for expenses of VND 05 million or more per transaction.
Therefore, there is no “automatic deduction” mechanism for health insurance expenses for employees’ relatives. Whether they are deductible depends on the nature of the expense, the enterprise’s internal regulations (collective labor agreement, financial regulations), supporting vouchers, and compliance with the welfare cap above. Enterprises should carefully review their dossiers before the tax finalisation period.
How can ANT Legal assist?
ANT Legal assists in reviewing specific situations, checking supporting vouchers, determining the applicable legal basis under the current corporate income tax framework, advising on handling options, and representing clients in working with tax authorities where necessary.
For prompt advice, you may contact our lawyers at 0966.475.966.
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