Typhoon Yagi has caused serious consequences, including major property damage to many businesses. To help businesses overcome difficulties, deducting losses caused by Typhoon Yagi from corporate income tax is a top concern. For losses caused by Typhoon Yagi that are not compensated, this expense will be included in deductible expenses when determining the enterprise's taxable income.
In this article, Bizzi will delve into the regulations on this issue, helping businesses have a basis for practical application after Typhoon Yagi.
1. Corporate income tax payer
Corporate income tax payers according to Article 2 Law on Corporate Income Tax 2008 include:
– Người nộp thuế thu nhập doanh nghiệp là tổ chức hoạt động sản xuất, kinh doanh hàng hóa, dịch vụ có thu nhập chịu thuế theo quy định của Law on Corporate Income Tax 2008 (hereinafter referred to as the enterprise), including:
+ Enterprises established under the provisions of Vietnamese law;
+ Enterprises established under the provisions of foreign law (hereinafter referred to as foreign enterprises) with or without a permanent establishment in Vietnam;
+ The organization was established according to Law on Cooperatives 2023;
+ Public service units established in accordance with the provisions of Vietnamese law;
+ Other organizations with income-generating production and business activities.
– Doanh nghiệp có thu nhập chịu thuế quy định tại Điều 3 Law on Corporate Income Tax 2008 (modify 2014) must pay corporate income tax as follows:
+ Enterprises established under the provisions of Vietnamese law pay tax on taxable income arising in Vietnam and taxable income arising outside of Vietnam;
+ Foreign enterprises with permanent establishments in Vietnam pay tax on taxable income arising in Vietnam and taxable income arising outside Vietnam related to the activities of such permanent establishments;
+ Foreign enterprises with permanent establishments in Vietnam pay tax on taxable income arising in Vietnam that is not related to the activities of the permanent establishment;
+ Foreign enterprises without permanent establishments in Vietnam pay tax on taxable income arising in Vietnam.
– Cơ sở thường trú của doanh nghiệp nước ngoài là cơ sở sản xuất, kinh doanh mà thông qua cơ sở này, doanh nghiệp nước ngoài tiến hành một phần hoặc toàn bộ hoạt động sản xuất, kinh doanh tại Việt Nam mang lại thu nhập, bao gồm:
+ Branches, executive offices, factories, workshops, means of transport, mines, oil and gas fields or other natural resource exploitation sites in Vietnam;
+ Construction site, construction works, installation, assembly;
+ Service providers, including consulting services through employees or other organizations or individuals;
+ Agent for foreign enterprises;
+ Representative in Vietnam in case of being a representative authorized to sign contracts in the name of a foreign enterprise or a representative not authorized to sign contracts in the name of a foreign enterprise but regularly delivering goods or providing services in Vietnam.
2. Cost of damage caused by Typhoon Yagi: Can businesses include it in deductible expenses when determining taxable income for corporate income tax?
According to Clause 2.1 Article 6 Circular 78/2014/TT-BTC (amended in Article 4) Circular 96/2015/TT-BTC) then in case the enterprise has expenses related to the value of the loss due to natural disaster, epidemics, fires and other force majeure no compensation This expense is included in deductible expenses when determining taxable income for corporate income tax, specifically as follows:
* Enterprises must clearly determine the total value of losses caused by natural disasters, epidemics, fires and other force majeure events as prescribed by law.
* The value of loss due to natural disasters, epidemics, fires and other force majeure events that are not compensated is determined by the total value of loss minus the value that the insurance company or other organizations and individuals must compensate according to the provisions of law.
** Records for assets and goods lost due to natural disasters, epidemics, and fires are included in deductible expenses as follows:
– Biên bản kiểm kê giá trị tài sản, hàng hóa bị tổn thất do doanh nghiệp lập.
The record of inventory of lost assets and goods must clearly identify the value of lost assets and goods, the cause of loss, the responsibility of the organization or individual for the loss; the type, quantity, and value of recoverable assets and goods (if any); the list of imported and exported goods with the confirmation of the legal representative of the enterprise who is responsible before the law.
– Hồ sơ bồi thường thiệt hại được cơ quan bảo hiểm chấp nhận bồi thường (nếu có).
– Hồ sơ quy định trách nhiệm của tổ chức, cá nhân phải bồi thường (nếu có).
** Goods damaged due to changes in natural biochemical processes, expired goods, and not compensated are included in deductible expenses when determining taxable income.
Records for goods damaged due to changes in natural biochemical processes, expired goods, are included in deductible expenses as follows:
– Biên bản kiểm kê giá trị hàng hóa bị hư hỏng do doanh nghiệp lập.
The inventory record of damaged goods must clearly identify the value of damaged goods, the cause of damage; the type, quantity, and recoverable value of goods (if any), accompanied by a list of damaged goods with confirmation signed by the legal representative of the enterprise and responsible before the law.
– Hồ sơ bồi thường thiệt hại được cơ quan bảo hiểm chấp nhận bồi thường (nếu có).
– Hồ sơ quy định trách nhiệm của tổ chức, cá nhân phải bồi thường (nếu có).
** The above documents are kept at the enterprise and presented to the tax authority when requested by the tax authority.
According to Clause 1, Article 3 Law on Natural Disaster Prevention and Control 2013 (modify 2020) thì thiên tai là hiện tượng tự nhiên bất thường có thể gây thiệt hại về người, tài sản, môi trường, điều kiện sống và các hoạt động kinh tế – xã hội, bao gồm storm, tropical depression, strong winds at sea, tornadoes, lightning, heavy rain, floods, flash floods, inundation; landslides, land subsidence due to heavy rain or water flow or drought; rising water, saltwater intrusion, heat, drought, natural forest fires, cold, hail, fog, frost, earthquakes, tsunamis and other natural disasters.
Through this article, we have learned about the costs of losses caused by Typhoon Yagi that can be deducted when determining taxable income. Understanding this regulation will help businesses reduce their tax burden and have more resources to restore production and business. However, to ensure compliance with legal regulations, businesses need to consult with accounting experts or tax authorities.
According to Law Library
>> See more: Typhoon Yagi Recovery: Natural Disaster Expenses Deductible in Determining 2024 Corporate Income Tax
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