Official letter No. 32040/CTHN-TTHT dated August 19th, 2021 of the Department of Taxation of Ha Noi city regarding determination of incomes liable to personal income tax (PIT) with regard to expenses of Covid-19 prevention and control

Relating to the accounting of Covid -19 quarantine-related expenses paid on behalf of foreign experts, the Department of Taxation of Ha Noi city assumes that it is required to base on the General Department of Taxation’s guidelines at Official letter No. 5032/TCT-CS dated November 26th, 2020.

According to Official letter No. 5032/TCT-CS, Covid-19 quarantine-related expenses at hotels (expenses of eating, accommodation, living) paid for foreign experts shall be included in deductible expenses upon determination of incomes liable to enterprise income tax (EIT) if the labor contracts clearly stating that enterprises will pay house rents on behalf of their employees and there are adequate invoices, payment documents.

Regarding expenses of Covid-19 testing, they must be paid by the welfare fund and accounted according to regulations provided for the welfare fund.

Notably, upon making payment for the amounts payable by foreign experts, such amounts must be induced in taxable income for calculation of PIT because they are considered to be “other benefits” received by such foreign experts.