A guide to determining deductible expenses for corporate income tax

Correctly identifying deductible expenses helps a business optimize the tax it owes while staying compliant, avoiding expenses being disallowed at finalization or during an inspection.

General conditions

A deductible expense must have actually been incurred, relate to business operations, and be backed by valid invoices and documentation as required. For payments of 20 million VND or more, non-cash payment documentation is required.

Expenses commonly disallowed

Expenses that don't directly serve business operations, amounts exceeding limits set by internal policies that were never properly issued, or expenses missing original documentation are the categories most often disallowed at finalization. Businesses should review these periodically rather than reconciling only at year-end.