The cost of inviting an English teacher to teach employees Can members be deducted when calculating corporate income tax

How is corporate income taxable income determined? When calculating corporate income tax, is the cost of inviting an English teacher to teach employees considered a deductible expense?

1. When calculating corporate income tax, is the cost of inviting an English teacher to teach employees considered a deductible expense?

Is the cost of inviting an English teacher to teach employees considered a deductible expense when calculating corporate income tax, according to the provisions of Clause 1 and Clause 2, Article 6 of Circular 78/2014/TT-BTC, amended by Clause 2, Article 6 of the Circular 119/2014/TT-BTC, Article 4 Circular 96/2015/TT-BTC as follows:

Deductible and non-deductible expenses when determining taxable income

1. Except for non-deductible expenses mentioned in Clause 2 of this Article, enterprises can deduct all expenses if they fully meet the following conditions:

a) Actual expenses incurred related to production and business activities of the enterprise.

b) Expenses with sufficient legal invoices and documents according to the provisions of law.

c) Expenses if there are invoices Buying goods and services at a time with a value of 20 million VND or more (price includes VAT) must have non-cash payment documents when paying.

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

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2.30. Expenditures that do not correspond to taxable revenue, except for the following expenses:

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– Welfare expenses paid directly to employees such as: funeral and wedding expenses for the employee and his/her family; vacation expenses, treatment support expenses; Expenses to support additional learning knowledge at training establishments; Expenses to support families of workers affected by natural disasters, enemy sabotage, accidents, and illnesses; Expenses for rewarding employees’ children with good academic achievements; Support for travel expenses on holidays and New Year for employees; expenses for accident insurance, health insurance, and other voluntary insurance for employees (except expenses for purchasing life insurance for employees guided at Point 2.6, voluntary retirement insurance for employees guided at Point 2.11 of this Article) and other welfare expenses. The total amount of welfare expenses mentioned above must not exceed 01 month’s actual average salary made in the enterprise’s tax year.

According to the above regulations, in normal cases, to record reasonable deductible expenses when calculating corporate income tax, the company must meet the conditions specified in Clause 1, Article 6 above. There are conditions to prove actual expenses incurred related to the production and business activities of the enterprise.

At this time, the company needs to prepare an explanation to the tax authority about the purpose of hiring teachers, whether English training serves the company’s business activities or not? If it can be proven that it meets the conditions of relevant invoices and payment documents, it can be recorded as a deductible expense when calculating corporate income tax.

On the contrary, if inviting an English teacher to teach employees does not serve the company’s production and business activities, this can be considered a welfare expense for employees.

This welfare expense does not exceed 01 month’s salary. The average amount actually performed in the enterprise’s tax year, this expense can be recorded as a reasonable deductible expense when calculating corporate income tax.

2. How is corporate income taxable income determined?

According to the provisions of Article 7 of the 2008 Corporate Income Tax Law, amended and supplemented by Clause 4, Article 1 of the 2013 Amended Corporate Income Tax Law, on the determination of taxable income as follows:

Determination of taxable income

1. Taxable income in the tax period is determined by taxable income minus tax-exempt income and losses carried forward from previous years.

2. Taxable income is equal to revenue minus deductible expenses of production and business activities plus other income, including income received outside Vietnam.

3. Income from real estate transfer activities, transfer of investment projects, transfer of rights to participate in investment projects, transfer of rights to explore, exploit and process minerals must be determined separately for tax declaration and payment. Income from the transfer of investment projects (except for mineral exploration and exploitation projects), income from the transfer of the right to participate in investment projects (except for the transfer of the right to participate in mineral exploration and exploitation projects), income from the transfer of real estate, if there is a loss, this loss will be offset against profits from production and business activities in the tax period.

The Government shall detail and guide the implementation of Article this.

Accordingly, corporate income taxable income in the tax period is determined by taxable income minus tax-exempt income and losses carried forward from previous years.

3. Enterprises can only pay corporate income tax where their head office is located, right?

Determining where to pay corporate income tax is stipulated in Article 12 of Circular 78/2014/TT-BTC as follows:

Principles for determining

Enterprises pay tax where their headquarters is located. In case an enterprise has a production facility (including processing and assembly facilities) with dependent accounting operations in a province or centrally run city other than the area where the enterprise’s head office is located, the tax amount shall be calculated and paid in the place where the head office is located and where the production facility is located.

The allocation of tax amounts payable specified in this Clause does not apply to cases where the enterprise has works, work items or construction facilities. Dependent accounting.

Thus, the enterprise pays CIT at the place where its head office is located.

However, in case the enterprise has a production facility (including processing and assembly facilities) with dependent accounting operating in a province or centrally run city other than the area where the enterprise is headquartered, the CIT amount is calculated and paid at the place where the head office is located and where the production facility is located. export.