The Department of Taxation of Ha Noi city assumes that if salaries paid for an employee’s untaken leave days meet the following conditions, they shall be included in deductible expenses:
(i) paid in accordance with regulations of the Labor Code;
(ii) meet the conditions on dossiers regulated at clause 1 Article 4 and does not belong to the cases mentioned at clause 2 Article 4 of Circular No. 96/2015/TT-BTC .
Notably, according to clause 3 Article 113 of the Labor Code No. 45/2019/QH14, untaken annual leave days shall be only paid in case an employee is subject to employment termination or job loss.
As the result, with regard the condition "paid in accordance with regulations of the Labor Code", the tax Authority rejects the amounts paid for untaken leave days of a working employee.
|Published||Vietlaw's Newsletter No. 551|