Regulations on documents to determine the amount Expenditures to support Covid-19 epidemic prevention and control activities according to Vietnamese law

Is the amount of money donated to the Covid-19 Vaccine Fund subject to corporate income tax? What documents are needed to prove that the business has supported the cause of Covid-19 prevention and control?

1. Who is the corporate income tax payer?

According to Article 2 of Decree 218/2013/ND-CP, taxpayers are regulated as follows:

“Article 2. Taxpayers

Taxpayers must comply with the provisions of Article 2 of the Law on Corporate Income Tax and Clause 1, Article 1 of the Law amending and supplementing a number of articles of the Law on Corporate Income Tax.

1. Taxpayers as prescribed in Clause 1, Article 2 of the Law on Corporate Income Tax include:

a) Enterprises are established and operate according to the provisions of the Enterprise Law, Investment Law, Credit Institutions Law, Insurance Business Law, Securities Law, Petroleum Law, Commercial Law and regulations in other legal documents in the following forms: Joint stock company; limited liability company; partnership; private enterprise; parties to a business cooperation contract; parties in petroleum product division contracts, petroleum joint venture enterprises, and joint operating companies;

b) Enterprises established under foreign laws (hereinafter referred to as foreign enterprises) with or without permanent establishments in Vietnam;

c) Public and non-public service units producing and trading goods and services with taxable income as prescribed in Article 3 of this Decree;

d) Organizations established and operating under the Cooperative Law;

d) Organizations other than the organizations specified in Points a, b, c, d of this Clause have production and business activities with taxable income as prescribed in Article 3 of this Decree.

2. Organizations established and operating (or registered to operate) in accordance with Vietnamese law, business individuals are taxpayers using the deduction at source method in case of purchasing services (including purchasing services attached to goods, purchasing goods provided and distributed in the form of on-site import and export or under international trade terms) on the basis of contracts signed with foreign enterprises specified in Points c and d, Clause 2, Article 2 of the Law on Corporate Income Tax. career.

The Ministry of Finance provides specific guidance on tax deductions specified in this Clause.”

2. What are expenses considered to be expenses supporting Covid-19 epidemic prevention and control activities?

According to the provisions of Article 2 of Decree 44/2021/ND-CP, enterprises can include deductible expenses when determining income subject to corporate income tax for support and sponsorship expenditures in cash and in-kind for Covid-19 epidemic prevention and control activities in Vietnam through the following units receiving support and sponsorship:

– Vietnam Fatherland Front Committees at all levels;

– Medical facilities;

– Armed forces units;

– Units and organizations assigned by competent state agencies to serve as centralized quarantine facilities;

– Educational establishments; press agencies;

– Ministries, ministerial-level agencies, and Government agencies; party organizations, youth unions, and trade unions at all levels at central and local levels;

– Local government agencies and units at all levels have the function of mobilizing funding;

– Covid-19 epidemic prevention and control fund at all levels;

– National humanitarian electronic information portal;

– Charitable and humanitarian funds and organizations with the function of mobilizing sponsorship are established and operate according to the provisions of law.

Units receiving support and sponsorship are responsible for using and distributing the support and sponsorship for the Covid-19 epidemic prevention and control activities received for the correct purpose.

3. What do documents to determine expenditures to support Covid-19 epidemic prevention and control activities include?

Pursuant to Clause 3, Article 2 of Decree 44/2021/ND-CP, documents to determine expenditures to support and sponsor include:

– Minutes of confirmation of support and sponsorship according to the form issued with this Decree or documents and documents (in paper or electronic form) confirmation of the support or sponsorship expenditure with the signature and stamp of the business representative who is the supporter or sponsor and the representative of the unit receiving support or sponsorship;

– Attached with legal invoices and documents in accordance with the law of the support or sponsorship in cash or in kind.

Thus, in case the enterprise has donated money to the vaccine fund Covid-19 requires submitting the documents mentioned above when declaring taxes.