Due to the unexpected outbreak of Covid-19 pandemic in all over the country, almost enterprises have been incurring a number of expenses for prevention and fight against Covid-19 as well as supports to employees during such difficult period. The related expenditures could be listed as following:
Quarantine expenses for foreign experts;
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Quarantine expenses for foreign experts;
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Covid19 testing fee, examination and treatment expense for foreign experts;
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Expenses for purchasing medical devices as face masks, hand sanitizer and/or other protective equipment;
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Donation, sponsorship and voluntary contributions for Covid-19 prevention and vaccine fund;
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Allowances paid for employees who are forced to suspend their works during the social distancing and affected by Covid-19 pandemic;
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Depreciation of fix assets which are provisionally inactive due to the impact of Covid-19 pandemic.
Regarding concern of the taxpayer, there are notable regulations providing guidance on treatment to the aforesaid expenses. Below is our summary as brief of some relevant guidance related to Corporate Income Tax (“CIT”) and Personal Income Tax (“PIT”) treatment for your further reference.
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As you can see in the above, the current regulations have just covered that cost consumed for foreign experts as Covid19 epidemic quarantine and prevention would be included in the individuals’ taxable income from the employment salaries and wages while there is still not specific guidance on treatment to same expenses reserved for local staffs.
Given the fact that there is unexpected increase in cases in all over the country, the Covid-19 testing fee will be a must for employee to carry out business assignment under request by their employers, is it fair that employees, especially those who are likely to need tests on a regular basis have to bear such tax burden at this time?
It is certain that the Government will issue further guidance on how to treat expenses and benefits provided to employees during Covid19 pandemic. We will promptly keep you updated as soon as new regulation is issued.
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