Health Insurance for Employees’ Relatives: Is the Expense Deductible?

May a company buy health insurance for employees’ relatives?

Under Article 34 of the Law on Insurance Business 2022, the policyholder has an insurable interest in the following persons for life insurance and health insurance contracts: (a) the policyholder themselves; (b) the policyholder’s spouse, parents and children; (c) the policyholder’s full siblings or other persons in a nurturing/support relationship with the policyholder; (d) persons with a financial interest or employment relationship with the policyholder; (dd) persons who agree in writing for the policyholder to buy health insurance for them. At the time of entering into the insurance contract, the policyholder must have an insurable interest. Thus, a company may buy health insurance for employees’ relatives if such persons agree in writing.

Is the expense of buying health insurance for employees’ relatives deductible for corporate income tax?

Legal framework update: the conditions for deductible expenses below were previously presented under the guiding circulars of the 2008 Law on Corporate Income Tax (Article 6 of Circular 78/2014/TT-BTC, as amended by Article 4 of Circular 96/2015/TT-BTC and Clause 4, Article 3 of Circular 25/2018/TT-BTC). The 2008 Law has been replaced by the 2025 Law on Corporate Income Tax (No. 67/2025/QH15), effective from 01/10/2025 and applicable from the 2025 tax period, guided by Decree 320/2025/ND-CP. The following citations are under the old framework; application to tax periods from 2025 onward must be cross-checked against Law 67/2025/QH15 and Decree 320/2025/ND-CP:

Under the old framework, deductible expenses required: (a) the expense actually incurred and related to the enterprise’s production/business activities; (b) sufficient lawful invoices and documents; (c) for single invoices of VND 20 million or more (including VAT), non-cash payment evidence. Among non-deductible expenses: point 2.30 lists welfare expenses not corresponding to taxable revenue — including accident insurance, health insurance and other voluntary insurance for employees (except life insurance and voluntary retirement insurance for employees under point 2.11) — with total welfare expenses capped at 01 month of actual average salary in the tax year.

Official Letter 9294/CT-TTHT of 2015 (Ho Chi Minh City Tax Department) was issued under the 2008 CIT framework and should be re-verified against Law 67/2025/QH15 and Decree 320/2025/ND-CP before application. In conclusion: the expense of buying insurance for employees’ relatives is not deductible when calculating corporate income tax. Note: this conclusion was presented under the framework at the time of writing; from 01/10/2025, Law 67/2025/QH15 and Decree 320/2025/ND-CP replaced that framework, so deductibility must be reviewed against the current documents before application.

How long is the free-look period for health insurance?

Under Article 35 of the Law on Insurance Business 2022, for health insurance contracts with a term of over 01 year, within 21 days from receipt of the insurance contract, the policyholder may decline to continue the insurance. Upon declining, the insurance contract is cancelled and the policyholder is refunded the paid premiums after deducting reasonable expenses (if any) as agreed in the contract; the insurer is not liable for compensation when an insured event occurs.

Notes on applying current legal provisions

This article belongs to the Corporate & M&A knowledge group and is presented for reference, helping readers understand the legal issue at an overview level before preparing a dossier or conducting a transaction. Legal provisions may change over time and vary by locality, dossier type and specific circumstances. Where you need to determine the exact legal basis applicable to your dossier, you should contact an ANT Legal lawyer at 0966.475.966 for review and advice before proceeding.

Common risks to note

• Applying legal documents that have been amended, supplemented or replaced.
• Preparing an incomplete dossier or missing necessary documents or evidence.
• Misunderstanding conditions, procedures, timelines or competent authorities.
• Signing, filing or conducting transactions without fully assessing legal risks.

How can ANT Legal help?

ANT Legal assists in reviewing specific situations, checking dossiers, identifying applicable legal bases, advising on solutions and representing clients in working with individuals, organizations or competent authorities when necessary.

For quick advice, you may contact a lawyer at 0966.475.966.

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