Vietnam: Tax treatment of certain pandemic-related expenses (COVID-19)

Guidance addressing the corporate income tax and individual (personal) income tax treatment of certain expenses related to the COVID-19 pandemic

Corporate income tax and individual (personal) income tax treatment of certain expenses

The General Department of Taxation issued guidance addressing the corporate income tax and individual (personal) income tax treatment of certain expenses related to the coronavirus (COVID-19) pandemic.

The guidance (Official Letter No. 4110 dated 27 October 2021) lists expenses not to be taken into account in calculating the individual income tax of employees when the expenses are deductible for corporate income tax purposes, provided they are supported by documentation. These eligible items include quarantine expenses incurred in Vietnam or overseas related to employee business trips; COVID-19 test fees or the costs to purchase test kits; and meals or accommodation expenses of employees under the “3T” working regime.

KPMG observation

It not clear whether this tax treatment can be applied retroactively for 2020 or whether the treatment is applicable in instances when expatriates first come to Vietnam to start an assignment or when the expatriates return to Vietnam after being home on leave and then incur quarantine expenses in Vietnam. It is expected that the tax authority would provide further clarification on these points.

Read a December 2021 report [PDF 179 KB] prepared by the KPMG member firm in Vietnam

 

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