The answer, for this case, is that you must comply with the foreign contractor tax regulations in Vietnam to argue successfully for the deduction as an expense.
In detail, according to Article 4 of Circular No. 96/2015/TT-BTC, it states in a general way:
“Article 6. Deductible and Non-Deductible Expenses when Determining Taxable Income
1. Except for the non-deductible expenses specified in Clause 2 of this Article, enterprises can deduct all expenses if they meet the following conditions:
a) The expenses actually incurred are related to the production and business activities of the enterprise.
b) The expenses have sufficient legal invoices and documents as prescribed by law.
c) For expenses with invoices for goods and services amounting to 20 million VND or more (price inclusive of VAT), payment must be made using non-cash payment documents.
Non-cash payment documents are conducted according to the provisions of legal documents on value-added tax.”
Additionally, based on the practice of several tax audits for your reference, the conditions for deducting expenses related to the purchase of foreign software for corporate income tax purposes include:
• A sales contract (very good if available; if not, it may be challenged during a tax audit, but can be defended with an invoice containing the company’s name, address, and tax code, along with complete foreign contractor tax documents).
• An invoice that accurately states the company’s name, address, and tax code.
• Payment documents from the company.
• Tax declaration and payment documents for foreign contractor tax.
Replace post
- TAX TREATMENT WHEN BUYING SOFTWARE FROM OVERSEAS
- COMMON PRACTICE ON BASIC UNDERSTANDING OF FCT IN VIETNAM
- TAX POLICY IN VIETNAM FOR THE MEMBERSHIP FEE FROM ORGANIZATION WITHOUT USING INVOICE
- REGULATIONS ON WITHHOLDING TAX 10% ON THE PAYMENT TO FREELANCERS IN VIETNAM
- SCOPES OF RETAINER (ADVISORY) SERVICE FROM FREELANCE ACCOUNTANT VIETNAM
- NOTICE FOR TAX RISK WHEN THE SELLING PRICE IS LOWER THAN THE COST OF GOODS SOLD