Can the cost of isolation be included in the company’s deductible expenses

Questions: Due to the Covid-19 pandemic, our Company has paid the quarantine costs for foreign employees when they enter into Vietnam. So, a question is: When the foreign employees enter into Vietnam to work, can the cost of quarantine and treatment (if any) be included in the company’s deductible expenses?

Answer: PL&Partners would like to thank you for your trusting and sending question to us. For your question, we would like to reply as follows:

On November 26, 2020, the General Department of Taxation issued Dispatch No. 5032/TCT-CS which contains the answer on this issue. Specifically:

“For the cost of quarantine at the hotel for foreign experts, in case the enterprise signs a labor contract with the employee in which the expenses for housing paid by the enterprise to the employee are recorded, the expense paid to the quarantine facility shall be included in deductible expenses when determining taxable income if there are sufficient invoices, documents and payment as prescribed.”

Thereby, if the labor contracts of your Company and the foreign employees have the term that “the expenses for housing paid by the enterprise to the employeeand your Company has sufficient invoices, documents and payment, then such expenses of your Company shall be included in the company’s deductible expenses.

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