Uni 01-07-2014 - New spotlights of Circular No.78/2014/TT-BTC for deductible expenses

MOF just issued Circular No.78/2014/TT-BTC replacing Circular No.123/2012/TT-BTC in guidance of implementation of Law on CIT. This Circular takes effect from 02 Aug 2014 and applied to CIT period from 2014.

According to Circular No.78/2014/TT-BTC, some new spotlights of deductible expense should be noted as follows:

• Each payment of more than 20 million VND must enclosed with non-cash vouchers. Until the expense recognition time, enterprises have not yet paid, they must declare, reduce the deductible expense into the generated period for cash payment. For purchase invoices of goods, services paid by cash before the effective time of  this Circular without retrospective revision).
• Tools, supplies,… which are not qualified as fixed assets will be allocated for maximum of 3 years (Circular No.123/2012/TT-BTC: 2 years).
• Enterprises liquidate automobiles carrying people less than 9 seats, their residual values are determined by original cost minus (-) accumulated depreciation of fixed assets in accordance with accounting standard, regime until the time of disposal, liquidation.
• Enterprises self-make, self-manage material consumption level and keep at enterprises ( do not need to inform tax authority with principal products).
• Enterprises are allowed to prepare List of buying goods, services in compliance with form No.01/TNDN (no need invoices), it is not forced to present non-cash payment vouchers.
• Enterprises do not retrieve boarding card of airplane from employees, they can use electronic air tickets, Decision of business trips and non-cash payment vouchers as evidences to include in deductible expenses.
• Enterprises do not include in deductible expenses for more than 01 million VND/month/person of voluntary pension fund payment, social security fund, voluntary pension insurance fund, lifetime insurance or are not stated specifically in Labor contract, Collective labor agreement or are not qualified for obligations of compulsory insurance (including compulsory insurance debt).
• Enterprises contribute capital with business advantage, value of rights to use the brand, these ones will not be allocated into deductible expense.
• Enterprises arise borrowing interests during investment state, these ones will be added to the investment cost