Uni 04-01-2018 - Guiding on CIT for accrued expense

Official letter 79215/CT-TTHT dated 07/12/2017 of Ha Noi Taxation Department guiding CIT for accrued expense:

In case, the company provides advisory services for clients, revenue incurred in the period but not yet have invoices and payment vouchers. The company conducted accrued expenses of labor, transportations,…to comply with accounting standards, after the accrued expenses are fully paid in Quarter 1 of the next year:

-          For declaration, deduction: for invoices have VAT amount incurred in a period, it must declare in that period as instruction of clause 8 article 14 Circular 219/2013/TT-BTC.

For accrued expense: In case, the company recognized revenue but not yet incurred fully expenses, the accrued expenses as regulations are included in tax expense in compliance with revenue recognized when determining CIT taxable income. When ending the contract, enterprises must compute to determine exactly the actual expense on basis of legal invoices, documents to adjust increase, decrease of the expense  to the period ended the contract as regulations of clause 2.20 article 4 Circular 96/2015/TT-BTC.