Is the salary of the head of the bailiff’s office considered a reasonable expense when calculating corporate income tax?

1. How is the bailiff’s office regulated?

According to Article 17 of Decree 08/2020/ND-CP mentions the bailiff’s office as follows:

“Article 17. Bailiff’s Office

1. The Bailiff’s Office is the Bailiff’s practice organization to perform assigned tasks according to the provisions of this Decree and relevant laws.

The Bailiff Office was established by 01 Bailiff and is organized as a private enterprise. The Bailiff’s Office is established by 02 or more Bailiffs and is organized in the form of a partnership company.

…

3. The legal representative of the Bailiff’s Office is the Head of the Bailiff’s Office. The Head of the Bailiff’s Office must be a Bailiff.

The Bailiff’s Office may have a Bailiff who is a partnership member, a Bailiff who works under a labor contract and a professional secretary.

…”.

2. Is the salary of the Head of the Bailiff’s Office included in reasonable expenses when calculating corporate income tax?

Pursuant to Article 4 of Circular 96/2015/TT-BTC stipulating the deduction of corporate income tax as follows:

“Article 4. Amending and supplementing Article 6 of Circular No. 78/2014/TT-BTC (amended and supplemented in Clause 2, Article 6 of Circular No. 119/2014/TT-BTC and Article 1 of Circular No. 151/2014/TT-BTC) as follows:

“Article 6. Deductible and non-deductible expenses when determining taxable income

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2. Expenses that are not deductible when determining taxable income include:

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2.6. Payment of salaries, wages, and bonuses to employees in one of the following cases:

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d) Salaries and wages of private enterprise owners, owners of one-member limited liability companies (owned by an individual); remuneration paid to founders, members of the board of members, and board of directors who do not directly participate in production and business operations.

…”.

Accordingly, in case your Bailiff’s Office is organized as a private enterprise, the Head of the Office is the owner of the private enterprise. According to the above regulations, salary payments to private business owners are not counted as deductible expenses. If it is a private business model, you hire an outside office manager and is not suitable. In case your Office is organized in the form of a partnership, this expense is still considered a deductible expense when calculating taxes and has no basis for exclusion.

3. How are the rights and obligations of the Bailiff’s Office regulated?

The rights and obligations of the Bailiff’s Office are stipulated in Article 18 of Decree 08/2020/ND-CP specifically as follows:

– The Bailiff’s Office has the following rights:

+ Sign labor contracts with the Bailiff, the professional secretary working for his Office;

+ Collect, manage, and use the costs of performing the Bailiff’s work according to the provisions of law;

+ Sign contracts and agreements with the requester according to the provisions of this Decree;

+ Other rights according to the provisions of this Decree and relevant laws authorities.

– The Bailiff’s Office has the following obligations:

+ Manage the Bailiff and professional secretary of their Office in compliance with the law and the Bailiff’s professional code of ethics;

+ Comply with the provisions of law on labor, tax, finance, reporting, and statistics list;

+ Post the working schedule, procedures, costs of performing Bailiff’s work, and rules for receiving requesters at the Office headquarters;

+ Collect the exact costs agreed with the requester;

+ Buy professional liability insurance for Bailiffs of your Office; Compensate for damages (if any) according to the provisions of law;

+ Receive, create favorable conditions and manage trainees during their probationary period at their Office;

+ Create conditions for Bailiffs of their Office to participate in training and foster Bailiff skills;

+ Implement requests from competent state agencies on reporting Report, check, inspect, provide information about service contracts, professional records Bailiffs;

+ Prepare, manage, use books, professional records and archive according to regulations;

+ Ensuring clothing for the Bailiff of his Office according to the form prescribed by the Minister of Justice;

+ Other obligations according to the provisions of this Decree and relevant laws.