Businesses are allowed to deduct expenses when determining corporate income tax for contributions and sponsorships in cash or in kind to support COVID-19 prevention and control activities in Vietnam through the receiving entities.
The government has just issued Decree 44/2021/ND-CP dated March 31, 2021, guiding the implementation of deductible expenses when determining corporate income tax for donations and sponsorships by businesses and organizations for COVID-19 prevention and control activities.
1. Expenses that are deductible when determining corporate income tax.
Businesses are allowed to deduct expenses when determining corporate income tax for the purpose of supporting and sponsoring COVID-19 prevention and control activities in Vietnam through the designated recipients as stipulated below.
The organizations receiving support and sponsorship include:
- Vietnam Fatherland Front Committees at all levels;
- Healthcare facilities;
- Armed forces unit;
- Units and organizations assigned by competent state agencies to serve as centralized quarantine facilities;
- Educational institution;
- Press agency;
- Ministries, ministerial-level agencies, and agencies under the Government;
- Party organizations, youth unions, and trade unions at all levels, both central and local;
- Local government agencies and units at all levels have the function of mobilizing funding.
- Funds for COVID-19 prevention and control at all levels;
- National humanitarian online portal;
- Charitable and humanitarian funds and organizations with fundraising functions are established and operate in accordance with the law.
The units receiving donations and sponsorships are responsible for using and distributing the donated funds appropriately for the purposes of COVID-19 prevention and control activities.
2. Documentation identifying donations and sponsorships.
A confirmation record of support or sponsorship, in the form issued with Decree 44/2021, or a document (paper or electronic form) confirming the support or sponsorship expenditure, bearing the signature and seal of the representative of the business providing the support or sponsorship and the representative of the unit receiving the support or sponsorship, along with legal invoices or documents in accordance with the law for the support or sponsorship in money or in kind.
Decree 44/2021/ND-CP takes effect from the date of signing and applies to the corporate income tax periods of 2020 and 2021.
