CIT Deductible Expenses Vietnam are an important part of Corporate Income Tax (CIT) compliance. Businesses can reduce taxable income by deducting qualifying expenses, but each expense must satisfy the conditions under Vietnam’s current tax regulations. In practice, an expense recorded in the accounting books does not automatically qualify as a CIT deduction. Vietnam’s Law on Corporate Income Tax No. 67/2025/QH15 provides the current framework for deductible and non-deductible expenses. Under Article 9, an expense can generally be deducted when it is actually incurred, relates to the company’s business activities, and meets the required invoice, document, and payment conditions. Therefore, companies should review expenses throughout the year and maintain proper supporting documents before preparing their annual CIT finalization.

I. What Are CIT Deductible Expenses in Vietnam?

1.1 Definition of CIT Deductible Expenses

CIT deductible expenses are costs that a company can subtract when determining taxable income for corporate income tax purposes. The current CIT Law generally allows actual business expenses to be deducted, except for expenses specifically excluded under the law.

In general, a deductible expense should meet the following requirements:

• It is actually incurred and relates to the company’s production or business activities.
• It has sufficient invoices and supporting documents.
• It satisfies applicable non-cash payment requirements.
• It does not belong to a category specifically classified as non-deductible.

Therefore, companies should review both the business purpose and tax documentation of an expense before claiming a deduction.

1.2 Accounting Expenses and CIT Expenses

Accounting profit and taxable income are not always the same. A company may record an expense in its financial statements but still need to adjust that expense when calculating CIT.

For example, an administrative fine may be recognized as an accounting expense, but the fine is not deductible for CIT purposes.

A simplified calculation is:

Taxable Income = Accounting Profit + Non-Deductible Expenses ± Other Tax Adjustments

Therefore, identifying deductible and non-deductible expenses is an essential part of CIT compliance.

You might not know >> Accounting services for FDI enterprises

II. Conditions for CIT Deductible Expenses

2.1 Expenses Must Relate to Business Activities

The first key condition is that the expense must actually arise and relate to the company’s production or business activities. The 2025 CIT Law also recognizes certain specific expenses that can qualify even when they do not directly correspond to revenue generated during the same period.

Common business expenses can include:

• Raw materials and goods
• Employee salaries and benefits
• Rent and utilities
• Professional services
• Advertising and marketing
• Transportation
• Repairs and maintenance
• Depreciation of qualifying fixed assets
• Research and development expenses

However, the company should be able to demonstrate the business purpose of the expense through appropriate records.

2.2 Invoices and Supporting Documents

Proper documentation is essential when claiming a CIT deduction. Depending on the transaction, the company may need invoices, contracts, delivery records, acceptance documents, payment evidence, and internal approvals.

For example, a consulting expense may require a service contract, invoice, payment evidence, and documents showing that the service was actually provided.

Therefore, keeping only an invoice may not always provide sufficient support for a tax deduction.

2.3 Non-Cash Payment Requirements

The current CIT framework requires qualifying expenses to have appropriate payment documentation, including non-cash payment evidence where required.

Companies should therefore review payment methods before completing large transactions. Accounting and finance teams should make sure that the payment method complies with the applicable tax requirements.

III. Common CIT Deductible Expenses Vietnam

3.1 Salary and Employee Expenses

Employee costs are among the most common business expenses. Depending on the circumstances, deductible employee expenses can include salaries, wages, bonuses, allowances, compulsory insurance contributions, and other qualifying payments.

Companies should maintain:

• Employment contracts
• Payroll records
• Salary policies
• Bonus decisions
• Attendance records
• Insurance documents
• Payment evidence

The company should also ensure that the amounts recorded in payroll are actually paid and supported by the required documents. Otherwise, the expense may become non-deductible.

3.2 Rent and Office Expenses

Office rent, factory rent, warehouse rent, and other premises-related costs can generally qualify as deductible business expenses when the relevant conditions are satisfied.

The company should retain the lease agreement, invoices or appropriate documents, payment evidence, and other supporting records.

For example, when renting premises from an individual, the company should also review the tax obligations and documentation associated with the rental arrangement.

3.3 Utilities and Communication Costs

Electricity, water, internet, telecommunications, and similar costs can qualify as deductible expenses when they support business operations and meet the documentation requirements.

For companies operating factories, warehouses, restaurants, hotels, or retail locations, these expenses can represent a significant part of operating costs.

Therefore, companies should ensure that utility documents and accounting records are consistent.

3.4 Depreciation of Fixed Assets

Depreciation of fixed assets used for business activities can be a deductible expense when the company calculates depreciation in accordance with applicable regulations.

However, depreciation that is incorrectly calculated or exceeds the permitted amount is not deductible.

Companies should therefore maintain accurate records for:

• Machinery
• Vehicles
• Buildings
• Equipment
• Office assets
• Production facilities

The fixed asset register should also match the accounting records and supporting purchase documents.

IV. Special CIT Deductible Expenses

4.1 Research and Development Expenses

The 2025 CIT Law provides additional deductible treatment for certain research and development expenses. It allows additional deductions calculated as a percentage of actual R&D expenses incurred during the tax period, subject to conditions and detailed rules.

This can be relevant to technology companies, manufacturers, pharmaceutical businesses, and companies developing new products or processes.

Therefore, businesses should maintain separate records for qualifying R&D activities and related expenditure.

4.2 Training and Vocational Education

Certain actual expenses for vocational education and vocational training for employees can qualify as deductible expenses under the current CIT framework.

For example, businesses may incur costs for professional training, technical training, or vocational programs related to their operations.

Companies should retain contracts, invoices, training records, participant lists, and payment evidence where applicable.

4.3 Technology, Innovation, and Digital Transformation

The current CIT Law also recognizes certain expenses related to scientific research, technological development, innovation, and digital transformation.

This is particularly relevant to companies investing in:

• Digital systems
• Business software
• Technology development
• Product innovation
• Research projects
• Digital transformation

However, the company should distinguish qualifying expenses from general operating costs and maintain documents that demonstrate the purpose and nature of the expenditure.

4.4 Certain Sponsorship and Funding Expenses

Certain sponsorship expenses can qualify for CIT deduction when they meet the conditions under the law. These include specified funding for education, healthcare, culture, disaster prevention and recovery, scientific research, technological development, innovation, and digital transformation.

Therefore, businesses should review the purpose of a sponsorship payment and retain the required supporting documents before claiming a deduction.

V. Other Business Expenses That May Be Deductible

5.1 Marketing and Advertising

Advertising, marketing, promotional campaigns, and other business development expenses can generally qualify when they are genuinely incurred for business purposes and satisfy the relevant documentation requirements.

Companies should retain:

• Service contracts
• Advertising invoices
• Campaign documents
• Payment records
• Acceptance documents

This is especially important for businesses with significant digital marketing and advertising costs.

5.2 Professional and Consulting Services

Legal, accounting, auditing, consulting, IT, and other professional services can qualify as deductible business expenses.

However, the company should be able to demonstrate that the service actually occurred. Therefore, contracts, invoices, service reports, acceptance records, and payment evidence should be maintained.

5.3 Repairs and Maintenance

Costs for repairing and maintaining machinery, equipment, vehicles, offices, and other business assets can generally qualify when they relate to business operations.

The accounting team should distinguish ordinary repair expenses from major expenditures that may need to be capitalized as fixed assets.

5.4 Business Travel and Transportation

Business travel, transportation, accommodation, and related costs may qualify as deductible expenses when they relate to business activities and satisfy the applicable documentation requirements.

Companies should maintain travel approvals, invoices, receipts, travel schedules, and payment evidence where required.

VI. Expenses Requiring Special Attention

6.1 Interest Expenses

Interest expenses require particular attention for companies with loans or related-party financing.

The current CIT Law contains specific restrictions concerning interest expenses, including interest corresponding to insufficient contributed charter capital and certain interest expenses arising from related-party transactions.

Therefore, businesses should review their:

• Loan agreements
• Interest calculations
• Contributed capital
• Related-party relationships
• Transfer pricing documentation

before claiming interest deductions.

6.2 Provisions

Companies may make accounting provisions for doubtful debts, inventory, warranties, and other risks. However, provisions must comply with the applicable regulations to qualify for tax deduction.

Provisions made incorrectly or above permitted levels can become non-deductible.

Therefore, businesses should reconcile their accounting provisions with the applicable tax requirements before CIT finalization.

6.3 Prepaid and Accrued Expenses

Businesses sometimes record expenses in advance or accrue costs at year-end. These expenses need appropriate supporting evidence and must comply with applicable rules.

Improper prepaid expenses or accruals can be excluded from deductible expenses.

Therefore, year-end expense accounts should receive particular attention during the tax review.

VII. CIT Deductible Expenses for Foreign-Invested Companies

7.1 FDI Companies and Overseas Payments

Foreign-invested enterprises may have additional complexity because they often receive services or financing from overseas related parties.

For example, an FDI company may pay:

• Management fees
• Technical service fees
• Software fees
• Consulting fees
• Interest
• Royalty or licensing costs

The company should review the tax treatment, supporting documents, withholding tax, and related-party implications before treating these amounts as deductible expenses.

7.2 Related-Party Transactions

Related-party transactions require careful review because the CIT rules contain specific restrictions for certain expenses, particularly interest expenses and costs allocated from related entities.

Therefore, FDI companies should coordinate their accounting, tax, and transfer pricing records.

7.3 Foreign Enterprise Management Costs

Certain management costs allocated by a foreign enterprise to its permanent establishment in Vietnam are subject to prescribed limits. Any amount exceeding the applicable limit can become non-deductible.

Therefore, companies should maintain a clear allocation methodology and supporting documents for overseas management costs.

VIII. How to Maintain CIT Deductible Expenses

8.1 Review Expenses Monthly

Companies should review expenses regularly instead of waiting until the annual CIT finalization.

The review can cover:

• Invoices
• Contracts
• Payment methods
• Employee costs
• Depreciation
• Interest
• Provisions
• Related-party expenses
• Marketing costs
• Professional services

As a result, businesses can identify documentation problems while transactions are still recent.

8.2 Reconcile Accounting and Tax Records

Accounting records should be consistent with invoices, contracts, bank statements, payroll, and tax declarations.

For example, if an expense appears in the general ledger but the company cannot locate the related invoice or payment evidence, the accounting team should investigate the transaction before CIT finalization.

Therefore, regular reconciliation can reduce the number of tax adjustments required at year-end.

8.3 Conduct a CIT Tax Review

A tax health check before CIT finalization can help businesses identify expenses that may not satisfy the deduction requirements.

The review can focus on:

• Deductible expenses
• Non-deductible expenses
• Missing documents
• Payment methods
• Employee costs
• Depreciation
• Interest expenses
• Related-party transactions
• Tax adjustments

This allows the company to make corrections before submitting the final CIT return.

IX. Conclusion

CIT Deductible Expenses Vietnam cover a wide range of costs that businesses incur during their production and business activities. Under the current CIT Law, expenses can generally qualify for deduction when they are actually incurred, relate to business activities, have sufficient supporting documents, and satisfy the applicable payment requirements.

Common deductible expenses include salary and employee costs, rent, utilities, depreciation, marketing, professional services, repairs, business travel, R&D, employee training, and certain technology and innovation expenses. However, each category still needs to satisfy the relevant tax conditions.

For FDI companies, additional attention may be necessary for related-party transactions, overseas service fees, interest expenses, and management costs allocated from foreign entities.

Therefore, businesses should review expenses throughout the year, maintain complete documentation, and reconcile accounting records with tax requirements. A structured CIT Deductible Expenses Vietnam review can help companies calculate taxable income accurately and prepare more effectively for CIT finalization and tax inspections.

MVA VIETNAM ACCOUNTING AND AUDITING COMPANY LIMITED