In the context of an increasingly complete and strict tax law system, correctly determining Deductible and non-deductible expenses when calculating corporate income tax (TNDN) 2025 is a mandatory requirement for all businesses. This is not only the basis for ensuring transparency and compliance with legal regulations, but also helps businesses be proactive in cost management and limit tax risks.
The following article will systematize and analyze in detail the current regulations to help businesses fully grasp and apply them correctly in practice.
I. Deductible expenses when calculating corporate income tax
1. Legal basis
According to the Clause 1 Article 9 Corporate Income Tax Law 2025 No. 67/2025/QH15Enterprises are allowed to deduct expenses when determining taxable income for corporate income tax in 2025 if they fully meet the following conditions:
- Not included in the list of non-deductible expenses specified in Clause 2 of the same Article;
- Actual expenses incurred in connection with production and business activities. Including additional expenses deducted as a percentage of actual expenses incurred during the period for business research and development;
- Have sufficient invoices and documents for non-cash payments as prescribed by law, except for special cases as prescribed by the Government;
- Included in other actual expenses incurred as prescribed in Point b Clause 1 of the same Article.
2. Some specific cases
a) Raw material costs
Raw material costs are understood as expenses that enterprises proactively balance, based on the establishment of consumption and loss norms in the production process. This norm is usually established at the beginning of the year or the beginning of the production period and is kept and managed internally within the enterprise.
Costs related to raw materials may include but are not limited to:
- Cost of purchasing main raw materials, auxiliary materials and goods;
- Cost of property rental, packaging, storage, transportation, loading and unloading, and processing services;
- Other costs incurred related to raw materials (cargo insurance, commissions, customs, etc.)
b) Purchase costs without invoices
According to the Clause 2.4 Article 4 Circular 96/2015/TT-BTC, purchase costs without invoices are still included in deductible expenses for corporate income tax 2025 if they fall into one of the following cases:
- Purchase goods directly exploited, produced, caught and sold by individuals;
- Purchase of assets and services of households and individuals not directly selling;
- Purchase of goods and services from individuals and business households (excluding the above cases) with revenue of less than 100 million VND/year.
For expenses without invoices, businesses must create and store alternative documents to prove the legality and reasonableness of the expenses. Alternative documents include:
- List of purchased goods and services according to Form 01/TNDN issued with Circular No. 78/2014/TT-BTC; 📥 Download form 01/TNDN here.
- Sales contract;
- Payment documents: Payment request, payment voucher or debit note;
- Goods delivery record.
⚠️ Note:
➤ The list of purchased goods and services must be signed by the legal representative or authorized person of the enterprise and the enterprise shall be legally responsible for its accuracy and honesty.
➤ These expenses do not require non-cash payment documents.
c) Cost of renting houses and properties
Warehouse, factory and asset rental costs for production and business activities are included in the deductible expenses for corporate income tax for 2025, provided that all legal regulations are fully complied with. Specifically at Clause 2.5 Article 4 Circular 96/2015/TT-BTC:
- In case an enterprise leases assets from an individual, the documents to determine deductible expenses include the asset lease contract and documents for paying the asset lease;
- In case the contract stipulates that the enterprise pays property rental tax on behalf of the individual, valid documents include: Lease contract, payment documents, tax payment documents on behalf of the individual;
- In case the contract stipulates that the rental does not include tax (VAT and PIT) and the enterprise pays tax on behalf of the individual, the tax paid on behalf is also included in the deductible expenses.
- In case of asset repair during the lease period, if the lease contract clearly stipulates that the responsibility for preserving the value of the leased asset belongs to the lessee, the cost of asset repair shall be accounted for in deductible expenses or gradually allocated but not exceeding 03 years (Clause 2.16 of the same Article).
d) Cost of electricity and water for renting a business office
Are expenses incurred related to electricity and water used at the headquarters, rented office or business premises of the enterprise.
To be considered a reasonable deductible expense, expenses must have:
- Lease contract clearly stating whether the responsibility for paying electricity and water bills belongs to the lessee or the lessor;
- Legitimate electricity and water bills;
- Have full and valid payment documents.
⚠️ Note:
If the business pays for electricity and water to the lessor, the amount must match the actual consumption of the business at the rental location.
e) Fixed asset depreciation costs
Fixed asset depreciation is understood as "dividing" the value of fixed assets (tangible and intangible) into many small parts and reasonably allocating them to production and business operating costs during the entire time of using that asset.
💡 For example, a business buys a cargo truck for 1 billion VND, expected to use it for 10 years. Each year, 100 million VND will be calculated as depreciation costs. This helps to accurately reflect the gradual decrease in the value of the vehicle over a period of use due to damage, wear and tear, etc.
According to the Clause 2.2 Article 4 Circular 96/2015/TT-BTC, enterprises are only allowed to calculate depreciation expenses for fixed assets in one of the following cases when settling corporate income tax in 2025:
- Assets serving production and business activities (machinery, vehicles, software, land use rights, etc.);
- Assets serving employees working at the enterprise (resthouses, garages, medical facilities, etc.);
- Assets with documents proving ownership of the enterprise;
- Financial lease fixed assets;
Assets are managed, monitored, and accounted for in the enterprise's accounting books and do not exceed the current regulations of the Ministry of Finance on the management, use and depreciation of fixed assets (Circular 45/2013/TT-BTC).
⚠️ Note: Some special cases:
➤ For fixed assets being passenger cars, according to Article 1 of Circular 151/2014/TT-BTC:
- Enterprises operating in the passenger transport, hotel and tourism industries: All depreciation costs of automobiles used for production and business are included in deductible expenses when settling taxes, and are not limited to the original price;
- Enterprises outside the above industries: For passenger cars with 09 seats or less, only the depreciation corresponding to the original price of up to VND 1.6 billion is included in deductible expenses.
➤ In case the enterprise temporarily suspends business for less than 9 months, according to Point e Clause 2.2 Article 4 Circular 96/2015/TT-BTC:
- If fixed assets are owned by the enterprise and still serve production and business activities, but due to seasonal characteristics, maintenance, repair, etc., must be temporarily suspended for a period of time, the depreciation cost of this asset is still included in deductible expenses when settling corporate income tax.
f) Cost of salaries, bonuses and allowances for employees
According to the Article 4 Circular 96/2015/TT-BTC, expenses related to employees serving production and business activities may include but are not limited to:
- Cost of paying salaries, wages, bonuses;
- Cost of compulsory social insurance and voluntary social insurance;
- Cost of meals, business travel, uniforms, overtime, etc.
- Reward costs for initiatives, funding scientific research;
- Other employee benefit expenses (holiday bonuses, Tet gifts, travel, etc.)
⚠️ Note:
➤ Funding for scientific research must comply with regulations on programs and policy subjects of the State (Clause 2.26, Article 4) and have a confirmation record signed by both the sponsor and the recipient;
➤ The total of the above welfare expenses shall not exceed 01 month of actual average salary at the enterprise;
Expenses must have payment documents (salary payment statements, VAT invoices, travel service invoices, etc.) according to the provisions of law and the level of benefit and conditions of benefit must be specifically stipulated in one of the following documents:
- Labor contract;
- Collective labor agreement;
- Financial regulations of the Company, Corporation, Group;
- The salary and bonus regulations are determined by the Chairman of the Board of Directors, General Director, and Director according to the financial regulations of the Company and Corporation.
g) Cost of purchasing goods for, giving away, or presenting to customers as a thank you
Are expenses that businesses spend on giving, presenting, or donating goods or services to customers and partners to show gratitude and build relationships. Giving, presenting, or donating is not directly related to trade promotion activities with the aim of stimulating and promoting consumer behavior in customers.
⚠️ Note:
Need to clearly distinguish "gifts and ""Free shipping" are two forms completely different legally, accounting and tax with specific legal regulations.
The cost of purchasing goods and services for gifts and presents, if meeting the conditions prescribed by law, will be included in deductible expenses when settling corporate income tax for 2025:
- Serving the production and business activities of enterprises;
- Have sufficient legal invoices and documents. If each purchase invoice or service invoice has a value of 05 million VND or more (including VAT), there must be a non-cash payment document;
- Goods and services given to, donated or presented to customers must be issued with VAT invoices and declared and paid output VAT as normal sales. The price for calculating VAT is determined based on the selling price of the same or equivalent goods and services at the time of donation.
h) Interest expense
Interest expense is understood as the amount of interest that a business must pay when borrowing capital to serve the production and business activities of the business. Deductible interest expense must have sufficient documents such as loan contracts, check payment documents or payment orders.
In case of personal loans, the interest rate must not exceed 150% of the basic interest rate announced by the State Bank of Vietnam at the time of borrowing. When paying interest, 5% personal income tax must be deducted on the portion paid to that individual.
⚠️ Note:
The interest portion related to loans determined as equity capital under the provisions of the Law on Corporate Income Tax will be not counted deductible expenses when settling corporate income tax.
💡 For example, Company A needs more capital to expand production. The company director (who is also the owner) puts an additional 5 billion VND into the company and calls it a “loan to the company”. Company A must pay the director 10% interest per year.
However, according to the Law on Corporate Income Tax and guiding circulars:
- This “loan” is actually considered a Owner's equity, because it is the money the business owner puts in.
- Therefore, the interest of 10%/year that the accounting company pays to the director will be not accepted as reasonable cost when calculating corporate income tax.
Opposite:
If Company A borrows 5 billion VND from a commercial bank with an interest rate of 10%/year, then This interest is included in eligible interest expense., because this is an actual debt relationship with a third party.
i) Loss costs due to foreign currency revaluation differences
This is the loss arising from the revaluation of foreign currency payables at the actual exchange rate at the end of the tax period. If the foreign currency exchange rate increases compared to the initial recording date, the amount of debt converted to VND will increase, leading to an exchange rate difference loss.
Loss expenses are considered reasonable expenses that can be deducted when the debt actually arises, is directly related to the production and business activities of the enterprise, and has legal invoices and documents in accordance with legal regulations.
j) Provision expenses
Provisioning is understood as the act of a business proactively recording a portion of costs in advance to prevent and handle risks that may arise in production and business activities.
According to the Article 2 Circular 48/2019/TT-BTC, the provisions that enterprises can set up include:
- Inventory discount: Provision when the actual value of inventory decreases compared to the value recorded in the accounting books (For example: Inventory of clothing loses value due to outdated designs);
- Loss of investments: Provision when the value of the securities the enterprise is holding or other investments of the enterprise in other economic organizations declines due to market fluctuations (except for overseas investments);
- Bad debt: Provision for overdue debts or debts that have not yet matured but are at risk of not being collected on time;
- Warranty for products, goods, services, construction works: Provision for costs to perform repair and warranty obligations for products, goods or works if they arise after handover according to commitments or contracts with customers.
Provisions are included in deductible expenses when settling corporate income tax if they meet all the conditions on documents as prescribed by law:
- Have legal documents and invoices proving ownership of inventory;
- Investment securities that have been listed or registered for trading, and whose market value at the time of preparing the financial statements is lower than the value recorded in the books;
- There are debt records proving that customers have not paid;
- There is a contract for the sale of goods or a construction contract that clearly stipulates warranty terms;
- There is an internal approval decision: a report or decision of the director or board of directors on the provisioning.
k) Prepaid expenses
Pre-accrued expenses are expenses that will arise in the future that the enterprise temporarily records as expenses in the current period to ensure that they match revenue, even though the actual expenses have not yet fully arisen at the time of recording. Later, when actual expenses arise, the enterprise will base on legal invoices and documents to adjust the increase or decrease of pre-accrued expenses accordingly.
💡 For example, Company B signed a contract to produce and deliver 10,000 pairs of shoes to a customer, with a contract value of VND 5 billion. According to the agreement, the customer received the goods at the end of December and Company B recorded the entire revenue of VND 12 billion upon signing the contract.
However, to fulfill its contractual obligations, Company B incurred estimated transportation and delivery costs of VND 200 million (incurred in January of the following year). The enterprise is allowed to deduct VND 1 million in transportation costs in the period in which revenue is recorded, to ensure the principle of matching between revenue and costs.
At the end of the contract, compare actual costs:
- If the actual shipping cost is 220 million → Company B accounts for an additional 20 million in costs.
- If the actual cost is only 180 million → Company B must refund the 20 million that was over-deducted.
Prepaid expenses may include:
- Costs not yet incurred/not fully incurred but corresponding revenue has been recorded (as in the example above);
- Asset maintenance costs are cyclical in nature as per contractual obligations.
⚠️ Note:
“Prepaid expenses” (TK 335) for periodic asset maintenance under contractual obligations other than “provision expense” (TK 352) for warranty and repair if any issues arise as mentioned in the section (J) on.
Pre-deductible expenses are included in deductible expenses when settling corporate income tax if:
- Expenditures are made on time and in the correct cycle;
- Have legal documents and records for expenses.
l) Uncompensated loss costs
This is the loss of raw materials and goods damaged due to expiration or natural disasters, storms and floods without compensation. Enterprises are responsible for determining and declaring the total value of the loss incurred.
⚠️ Note:
Only the uncompensated loss that the enterprise bears itself is considered a valid deductible expense when settling taxes; losses that have been compensated by insurance (partially or fully) are not considered a reasonable deductible expense.
Records used to determine deductible expenses for these losses may include:
- Document explaining damaged goods and assets sent to the direct tax authority;
- Minutes of inventory of value of lost goods and assets;
- Damage compensation file accepted by the insurance agency for compensation (in case the insurance only compensates a part of the value of the lost goods and property);
- Documents identifying the compensation liability of the relevant organization or individual.
m) Costs of funding education, health care, natural disasters, floods and the poor
Are financial or in-kind donations for programs supporting education, healthcare, flood relief, and supporting the poor.
These expenditures must be for the right subjects and purposes according to legal regulations and implemented through agencies and organizations with the function of mobilizing funding according to State programs, with priority given to localities in areas with particularly difficult socio-economic conditions.
Documents identifying deductible expenses for grants include:
- Minutes of sponsorship confirmation, signed by the legal representative of the enterprise and the representative of the organization receiving the sponsorship or the agency or organization with the function of mobilizing sponsorship;
- Invoices, documents for purchasing sponsored goods or documents for payment;
II. Expenses that are not deductible when calculating corporate income tax
1. Legal basis
Expenses that are not deductible when settling corporate income tax are in the following cases:
a) Not eligible for deduction regarding invoices or other specific conditions mentioned in Part I of the article;
b) According to Clause 2 Article 9 Corporate Income Tax Law 2025 No. 67/2025/QH15, some other specific cases include:
- Administrative fines;
- Costs are covered by other funding sources. (insurance, aid, funding from the state budget and other organizations);
- Excess expenditure as prescribed by the Government for:
- Business management expenses allocated by foreign enterprises to permanent establishments in Vietnam;
- Cost of hiring management for business activities of electronic games with prizes, casino;
- Interest payment of enterprises with related transactions;
- Expenses of a direct welfare nature for employees;
- Contribute to participate in additional retirement insurance according to the provisions of the Law on Social Insurance;
- Contributions to social security funds, voluntary pension insurance, and life insurance for employees.
- Salary, wages of the:
- Private business owner;
- Owner of a single-member limited liability company owned by an individual;
- Remuneration paid to business founders who are not directly involved in production and business operations.
- Expenses not corresponding to taxable revenue, except for expenses under Point b, Clause 1, Article 9; expenses that do not meet the spending conditions and spending contents according to specialized laws;
- Sponsorships, except for the funding specified in sub-point b5, point b, clause 1, Article 9;
- Basic construction investment expenses in the investment phase to form fixed assets; expenses directly related to the increase or decrease of the enterprise's equity;
- Expenditure from special business activities such as banking, insurance, lottery, securities, BT, BOT, BTO contracts if not in accordance with or exceeding legal regulations;
- Other expenses.
2. Handling non-deductible expenses
During the production and business activities, enterprises need to closely monitor expenses in their fiscal year. Regularly and proactively review and identify non-deductible expenses when settling corporate income tax in 2025.
Summarize these non-deductible expenses in indicator B4: “Expenses that are not deductible when determining taxable income” when declaring corporate income tax settlement (according to Form) Declaration 03/TNDN issued with Circular 80/2021/TT-BTC).
⚠️ Note:
Do not record adjusting entries in the accounting books when summing up non-deductible expenses.Because these expenses are still actual costs incurred at the enterprise, they are just not determined as reasonable expenses deductible when settling corporate income tax according to regulations of the Ministry of Finance.
Managing costs in accordance with the 2025 corporate income tax regulations not only helps businesses optimize their tax obligations but also creates a transparent and sustainable foundation in financial operations. Mastering and accurately applying the principles of deductible and non-deductible expenses is one of the important factors for businesses to improve management efficiency, prevent legal risks and strengthen reputation in relations with partners, tax authorities and investors.