Circular 20 sets out the documentation and supporting requirements for expenses to be recognized as deductible when determining taxable corporate income. This includes expenses that have already been incurred but have not yet generated corresponding revenue within the same tax period.

Documentation for expenses not yet matched with revenue in the same period

• Unsuccessful bidding expenses: bidding documents, bid submissions, and results, if any.
• Unsuccessful R&D expenses: research reports on market development or the development of new products or services.
• Land and infrastructure leasing costs not yet in operation: investment decisions or certificates, equivalent legal documents, and contracts or agreements for leasing land or infrastructure.
• Depreciation of leased assets without tenants: documentation proving the enterprise’s legal ownership or usage rights, together with asset management and accounting records.
• Establishment, restoration, and reinstatement costs: enterprise registration certificates, notifications, and handover minutes.
• Inventory, raw material, asset, scrap, and defective goods write-offs: disposal decisions, inventory minutes, and documentation from the handling committee where applicable.

Documentation for certain expenses under Point c, Clause 1, Article 9 of the CIT Law

• Purchases from individuals, such as agricultural, forestry, fishery products directly sold by producers, handicrafts, scrap, personal assets, or cases below the VAT threshold, require payment documentation, non-cash payment if the value is VND 5 million or more per day, and Form 02/TNDN.
• Authorized purchases by employees require invoices, internal financial regulations or company policies, a formal authorization decision where applicable, non-cash payment documents, and reimbursement records.
• Single purchases of goods or services of VND 5 million or more may still be treated as deductible expenses if supported by contracts and handover minutes; payments must be made via non-cash methods.
• Leasing assets from individuals requires a contract and payment documentation. Where the enterprise agrees to pay taxes on behalf of the individual, such tax payments are also deductible if valid tax payment receipts are available.

• Procedures and documentation for claiming tax incentives are carried out in accordance with the laws on tax administration.
• Enterprises are responsible for self-assessing their eligibility for incentives and determining deductible losses when filing and finalizing tax returns.
• If, based on inspection or audit conclusions, the enterprise is found not to meet the required conditions, it will be subject to tax reassessment, late payment interest, and penalties in accordance with regulations.

Taxable revenue for CIT – some specific cases

• If revenue excludes Corporate Income Tax, it must be converted according to the prescribed formula.
• For subcontracting, the portion performed by the subcontractor is not included; internal expenses are not deductible.
• For foreign subcontractors, the Vietnamese party declares and pays taxes on their behalf.
• For leasing of machinery and equipment, revenue is the rental fee; expenses with supporting documents are excluded.
• Air freight, sea freight, international forwarding, international express delivery, reinsurance, securities, and interest on loans are subject to specific taxable revenue rules.

• Deductible expenses incurred before this Circular takes effect, if already governed by Circular No. 96/2015/TT-BTC in terms of conditions and documentation, will continue to follow Circular 96 for the 2025 tax period.
• For expenses not covered under Circular 96, this Circular will apply. Supporting documents should include valid invoices and relevant documentation.
• Rules on non-cash payments and capital transfers will apply from the effective date of Decree No. 320/2025/ND-CP.
• Contractor and subcontractor agreements using the hybrid method under Circular No. 103/2014/TT-BTC, signed before this Circular takes effect, will continue to follow the tax rules applicable at the time the contract was signed.
• This Circular replaces Circulars No. 78/2014/TT-BTC and No. 96/2015/TT-BTC, and removes certain related provisions from earlier circulars.