12 January 2022
The Tax Department of Long An Province has issued Official Letter No. 3807/CTLAN-TTHT dated 15 December 2021 on compensation costs when liquidating the contract with the following contents:
In case an enterprise signs a house lease contract with an individual for a period of 5 years. Then, due to the need of the office expansion, the enterprise liquidated the contract ahead of time and incurred contract compensation costs for customers. This expense will be deducted when determining taxable corporation income if this expense meets the following conditions:
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The actual expense incurred is related to the enterprise’s business operation;
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There are sufficient and valid invoices and proof for the expense under the regulations of the laws; and
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There is proof of cashless payment for each invoice for the purchase of goods/services of VND 20 million or over (including VAT).
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