On 4 January 2022, the Tax Department of Bac Ninh province issued Official Letter No. 05/CTBNI-TTHT to guide the deductible expenses when calculating corporate income tax (“CIT”) and personal income tax (“PIT”) with the payment of unpaid leave days for employees. The main content is as follows:
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According to the law, the payment of unpaid leave days for employees is only regulated in case the employees resign or lose their jobs. Therefore, in case the employee is still working, this expense is not considered as salary and bonus payments that are eligible to be included in deductible expenses when calculating CIT.
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In case the employee is still working for the employer, the payment of unpaid leave days is considered as a benefit paid by the employer that the employee is entitled to and such payments are included in the employee’s taxable income.
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