Guide to properly implement tax policies for advertising activities on Facebook, Google

Legal basis:

Official Dispatch No. 78002 / CT-TTHT is based on Article 15, Circular No. 219/2013 / TT-BTC (as amended in Circular 119/2014 / TT-BTC, Circular 151/2014 / TT-BTC, Circular 26/2015 / TT-BTC, Circular 173/2016 / TT-BTC).

Accordingly, businesses are deducted input value added tax (VAT) for advertising activities on Facebook and Google when they meet the following 3 conditions:

Condition 1: There are legal invoices and vouchers to pay VAT

Having legal VAT invoices of purchased goods or services or vouchers on payment of VAT at the import stage or vouchers of VAT payment on behalf of the foreign parties under the Finance Ministry's guidance applicable to foreign organizations. has no Vietnamese legal status and foreign individuals do business or earn income in Vietnam.

Condition 2: Having vouchers of non-cash payment of VND 20 million or more

Having vouchers of non-cash payment for goods and services purchased (including also imported goods) of VND 20 million or more, except for cases where goods or services are imported at a time with a value of less than VND 20 million, goods and services purchased each time under an invoice of less than VND 20 million at a VAT-inclusive price and where the business imports goods as gifts or gifts from the organization individuals in foreign countries.

In which, non-cash payment documents include bank transfer vouchers and other non-cash payment documents guided in Clause 3 and Clause 4 Article 15, Circular No. 219/2013 / TT-BTC .

Condition 3: Bank vouchers must be in accordance with current regulations

Bank payment voucher is understood as having documents proving the transfer of money from the buyer's account to the seller's account opened at the payment service supplier in accordance with appropriate forms of payment. Regulations of applicable laws such as checks, payment orders or payment orders, collection orders, collection orders, bank cards, credit cards, phone sims (e-wallet) and other forms of payment as prescribed. (including the case where the buyer makes payments from the buyer's account to the seller's account in the name of the private enterprise owner or the buyer pays from the buyer's account in the name of the private enterprise owner to the side account sell).

At the same time, Circular No. 103/2014 / TT-BTC dated August 6, 8 of the Ministry of Finance stipulates that the subject of tax obligations is foreign business organizations with permanent establishments in Vietnam. or do not have a permanent establishment in Vietnam; Foreign business individuals are residents of Vietnam or are not residents of Vietnam, do business in Vietnam or earn income in Vietnam on the basis of contracts, agreements, or commitments. between a foreign contractor and a Vietnamese organization or individual or between a foreign contractor and a foreign subcontractor to perform part of the work of the contractor contract.

Under Article 4, Circular No. 96/2015 / TT-BTC amending Article 6, Circular No. 78/2014 / TT-BTC on deductible and non-deductible expenses when determining taxable income, Enterprises may deduct all expenses (except non-deductible expenses as prescribed) if they fully meet the following conditions: actually arising expenses related to their production and business activities; the expense has enough legal invoices and documents as prescribed by law; Expenditures if there is a purchase of goods or services each time with a value of 20 million VND or more (the price includes VAT) when making the payment must have proof of non-cash payment. Non-cash payment vouchers shall comply with the provisions of legal documents on VAT.

Conclusion:

Based on the above provisions, in case the company has an online advertising service on Facebook, Google, if this expense meets the actual conditions related to the company's business, there is Foreign contractor tax returns and receipts in accordance with legal documents on VAT shall be included in deductible expenses when determining taxable income of corporate income tax.

Note: 

In case the company authorizes the individual who is the employee in the company to use the individual's credit card to pay for the above services, the company then pays the individual via bank transfer. Bank from the company's account to the individual's account (credit card opened by the company for individuals at the Bank) and this form of payment is specified in the Financial Regulations or Decision on Authorization of the company to an individual is also considered as a non-cash payment certificate as prescribed in Article 1 of Circular No. 173/2016 / TT-BTC.