blue-check Conditions for including amounts paid for untaken annual leave days into deductible expenses

Official letter No. 5008/CTHN-TTHT dated February 14th, 2022 of the Department of Taxation of Ha Noi city regarding deductible expenses with regard to amounts paid to employees for untaken leave days
Posted: 1/3/2022 8:12:03 AM | Latest updated: 3/3/2022 12:37:05 PM (GMT+7) | LuatVietnam: 5401 | Vietlaw: 551

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-BTCstatus2 .

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.

Ms Phuong Thao (
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Published Vietlaw's Newsletter No. 551
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Reasonable expenses