– Pursuant to Clause 1, Article 90 of the Labor Code No. 45/2019/QH14 dated November 20, 2019 of the National Assembly providing for salaries:
“Article 90. Salaries
1. A salary is an amount the employer pays the employee under an agreement for a work performed by the latter, including the salary according to the job or title, salary allowances and other supplements.
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– Pursuant to Clause 2, Article 2 of Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance stipulating taxable incomes from salaries and remunerations:
“2. Incomes from salaries and remunerations
Incomes from salaries and remunerations are incomes paid to employees from employers, including:
a) Salaries, remunerations, and the other amounts paid as salaries or remunerations in cash or not in cash.
b) Allowances and benefits, except for:
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– Pursuant to Article 4 of Circular No. 96/2015/TT-BTC dated June 22, 2015 of the Ministry of Finance 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) stipulating expenses that are not deductible when determining taxable income:
“Article 6. Deductible and non-deductible expenses when determining taxable income
1. Except for the non-deductible expenses prescribed in Clause 2 of this Article, every expense is deductible if all of these following conditions are satisfied:
a) The actual expense incurred is related to the enterprise’s business operation.
b) There are sufficient and valid invoices and proof for the expense under the regulations of the law.
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2. The expenses below are not deductible when calculating taxable income:
2.1 Expenses that do not meet all of the conditions in Clause 1 of this Article.
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2.6 Expenditures on wages and bonus for employees in one of the following cases:
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d) Salaries and remunerations of the owner of a private company, a single-member limited liability company (owned by an individual); wages of the founders, members of the Board of members or the Executive Board who do not directly participate in business administration.”
Based on the above provisions, in principle:
In case the enterprise is a single-member limited liability company owned by an individual, which incurs costs of salaries, remunerations, and house rent payments and other services related to the company owner, then:
- Regarding CIT: Salaries, remunerations and other payments for house rent and other services of the Company mentioned above are not accounted into deductible expenses when calculating CIT according to the provisions of Article 4 of Circular No. 96/2015/TT-BTC dated June 22, 2015 of the Ministry of Finance.
- Regarding PIT: Salaries, remunerations and other payments for house rent and other services received by the Company owner, paid by oneself, are not the income that the employee receives from the employer; therefore not subject to PIT from salaries and remunerations according to the guidance in Clause 2, Article 2 of Circular No. 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance.