Are employee benefit payments tax deductible?

Accordingly, for welfare expenses for employees at irrigation exploitation enterprises, the General Department of Taxation guides:

Regarding price policy, Clause 2, Article 3 of Decree No. 96/2018/ND-CP stipulates: "Expenses in the total cost of irrigation public products and services include expenses determined in Article 7 of this Decree, except for contingency expenses and expenses for collecting fees for using irrigation products and services".

Article 7 of Decree No. 96/2018/ND-CP stipulates the total cost, expected profit and financial obligations in the price of other irrigation products and services.

Based on the above regulations, welfare expenses paid directly to employees are not included in the cost items in the total cost of irrigation products and services as prescribed in Decree No. 96/2018/ND-CP.

Regarding corporate income tax policy, Clause 4, Article 1 of Decree No. 91/2014/ND-CP amending and supplementing Point a, Clause 1, Article 9 of Decree No. 218/2013/ND-CP detailing and guiding the implementation of the Law on Corporate Income Tax stipulates that deductible expenses when determining taxable income for corporate income tax include: “Welfare expenses paid directly to employees for which the enterprise has invoices and documents as prescribed, such as: Funeral and wedding expenses of the employee and his/her family; vacation expenses, treatment support expenses; expenses to support additional knowledge and study at training facilities; expenses to support employees' families affected by natural disasters, war, accidents, and illness; expenses to reward employees' children with good academic achievements; expenses to support travel expenses on holidays and Tet for employees and other welfare expenses according to the guidance of the Ministry of Finance ; total Expenditure not exceeding 01 month of actual average salary paid in the tax year".

Clause 4, Article 3 of Circular No. 25/2018/TT-BTC dated March 16, 2018 of the Ministry of Finance stipulates: “Welfare expenses directly paid to employees such as: expenses for funerals and weddings of the employee and his/her family; vacation expenses, treatment support expenses; expenses to support additional knowledge and study at training facilities; expenses to support employees' families affected by natural disasters, war, accidents, and illnesses; expenses to reward employees' children with good academic achievements; expenses to support travel expenses on holidays and Tet for employees; expenses for accident insurance, health insurance, other voluntary insurance for employees (except for expenses to buy life insurance for employees, voluntary retirement insurance for employees as guided in Point 2.11 of this Article) and other welfare expenses. The total amount of welfare expenses mentioned above shall not exceed 01 month of actual average salary. performed during the tax year of the enterprise”.

Article 4 of Circular No. 96/2015/TT-BTC stipulates that "Expenses offset by other funding sources" are non-deductible expenses when determining income subject to corporate income tax.

Previously, the General Department of Taxation also issued Official Dispatch No. 158/TCT-CS dated January 12, 2017 to the Tax Departments of provinces and centrally run cities regarding accounting for corporate welfare expenditures.

Based on the above regulations, enterprises include in deductible expenses when determining taxable income for corporate income tax the welfare expenses paid directly to employees according to Clause 4, Article 1 of Decree No. 91/2014/ND-C if there are complete invoices, documents and the total welfare expenses do not exceed 1 month's actual average salary in the tax year.

Source