Expenses for isolation of foreign experts in Vietnam. Is the cost of isolation of foreign experts deductible for tax purposes? Foreign experts (such as investors, skilled workers, business managers, etc.) must pay their own expenses for concentrated isolation in Vietnam. Is this expense tax-deductible? Let us learn about this topic with LSX law firm as follow:
Expenses for isolation of foreign experts in Vietnam
According to the requirements of epidemic prevention and control, foreigners and overseas Vietnamese entering Vietnam must undergo concentrated medical isolation at hotels and resorts (not at military barracks, military schools). team…).
Accordingly, Resolution 16/NQ-CP dated February 8, 2021 stipulates that this subject must pay the following expenses:
– Firstly, transportation costs from the place of entry into Vietnam to the isolation facility;
– Secondly, cost of SARS-CoV-2 testing and screening according to current medical service rates;
– Costs of food, accommodation and living (including costs of disinfection and sterilization; costs of protection, security and order and other expenses); according to the price announced by the hotel, resort, and the owner of the means of transport.
These people must have valid international health insurance and have the coverage of medical examination and treatment in Vietnam suitable to the length of stay in Vietnam.
Foreign experts entering Vietnam to work for a short time (under 14 days) are; not required to undergo concentrated medical isolation, but must strictly and fully comply with regulations on prevention and control of the Covid-19 epidemic (according to Official Letter No. No. 4674/BYT-MT dated August 31, 2020).Procedures for applying for a work permit for foreign experts in Vietnam.
Are experts isolation expenses tax deductible in Vietnam?
– Firstly, Article 6 of Circular No. 78/2014/TT-BTC amended and supplemented in Circular No. 96/2015/TT-BTC;
– Secondly, clause 2, Article 2 of Circular 111/2013/TT-BTC;
– Thirdly, point a Article 1 of Official Letter No. 7038/VPCP-KTTH dated 24/8/2020.
Corporate income tax in Vietnam (CIT)
Deductible expenses when determining taxable income:
– For the cost of isolation at the hotel for foreign experts; in case the enterprise signs a labor contract in which the house payment is; recorded by the enterprise; then the expenses paid to the isolation facility shall be; included in the deductible expenses when determining taxable income if there are sufficient invoices and documents and payment as prescribed.
– In addition, for the expenses for buying air tickets for foreign experts, if the expenses are; made according to the provisions of Point 2.9, Clause 2, Article 6 of Circular 78/2014/TT-BTC, as amended and supplemented in Article 4 of the Circular 96/2015/TT-BTC shall be; included in deductible expenses when determining taxable income when there are sufficient invoices and documents and payment as prescribed.
– The cost of Covid-19 testing for foreign experts is considered a welfare expense directly paid to employees; if this expense is made according to the provisions at Point 2.30, Clause 2, Article 6 of Circular 78/2014/TT-BTC, amended and supplemented in Circular 96/2015/TT-BTC, it shall be included in the deductible expenses; when determining income subject to corporate income tax when there are sufficient invoices and documents and payment according to regulations.
Personal income tax in Vietnam (PIT)
Conditions for completing personal income tax for foreigners. In case a foreign expert is paid by the Company for the cost of isolation and prevention of Covid-19 when entering Vietnam, this expense is the employee’s benefit.
This expense is included in the income subject to PIT from wages and salaries of employees.
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Subjects to pay PIT include: Individuals residing and individuals not residing in Vietnam with taxable income
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