Pursuant to Article 4 of Circular 96/2015/TT-BTC dated June 22, 2015 of the Ministry of Finance guiding on corporate income tax (CIT) amending and supplementing Article 6 of Circular No. 78/2014/TT- BTC (amended and supplemented in Clause 2, Article 6 of Circular No. 119/2014/TT-BTC and Article 1 of Circular No. 151/2014/TT-BTC) as follows:
“2. Expenses that are not deductible when determining taxable income include:
…
2.32. Spending on local support; spending on support for mass organizations and social organizations; charity expenditures (except for funding for education, health care, disaster recovery, building houses of gratitude, building houses for the poor, building houses of great solidarity; funding for scientific research, funding for policy beneficiaries as prescribed by law, funding under the State’s program for localities in areas with extremely difficult socio-economic conditions mentioned at Points 2.22, 2.23, 2.24, 2.25, 2.26 Clause 2 of this Article).”
Based on the above provisions, for example, in case the Company contributes to the ABC XYZ Social Charity Fund being a charity fund organization established and operating under the provisions of Decree No. 30/2012/ND- CP dated April 12, 2012 of the Government; if this charity is used for the following purposes: funding education, health care, overcoming the consequences of natural disasters, building houses of gratitude, building houses for the poor, building houses of great solidarity; funding for scientific research, funding for policy beneficiaries as prescribed by law, funding under the State’s program for localities in areas with extremely difficult socio-economic conditions mentioned at Point 2.22, 2.23, 2.24, 2.25, 2.26 Clause 2 Article 6 of Circular No. 78/2014/TT-BTC (amended and supplemented in Article 4 of Circular No. 96/2015/TT-BTC) then it is included in deductible expenses when determining CIT.
In case the expenses for sponsorship – support – donation – charity are other than the above-mentioned expenses, they are not included in the deductible expenses when calculating CIT.