How to determine deductible expenses for corporate income tax

In practice, companies may have employees purchase goods and services from multiple suppliers during the month. Each individual invoice may be under 5 million VND, but at month-end the invoices are consolidated into a single payment request whose total value exceeds 5 million VND, and the company pays the employees in cash. In such cases, the deductibility of the expenses for corporate income tax depends on the payment method and the required documentation under current regulations.

Deductible expenses under Decree 320/2025/NĐ-CP

The Finance Ministry’s guidance in Clause 1, Article 9 of Decree No. 320/2025/NĐ-CP dated 15 December 2025 (enforcing the Enterprise Income Tax Law) specifies that deductible expenses are those that are not excluded under Article 10 of the Decree and meet conditions at points a, b, and c.

In particular, point c provides that expenses are deductible when they are supported by non-cash payment vouchers for purchases of goods, services and other payments with a value of 5 million VND or more. Non-cash payment vouchers must be issued in accordance with VAT law.

Point c2 further addresses situations where a business incurs expenses due to authorization or delegation to employees to purchase on behalf of the business for production or business activities. Under this provision, such expenses are deductible if they are paid by the employee using non-cash payment methods, and the following conditions are met:

• There are invoices and vouchers in accordance with accounting law.
• There are accounting documents and the company’s financial regulations or internal regulations or a company decision authorizing the employee to make the purchase.
• The company subsequently reimburses the employee.

Required documentation under Circular 20/2026/TT-BTC

Clause 13, Article 3 of Circular No. 20/2026/TT-BTC dated 12 March 2026 provides details on documentation for deductible expenses under points b and c of Clause 1, Article 9 of the Enterprise Income Tax Law and Decree 320/2025/NĐ-CP.

It states that deductible expenses under points b and c must have invoices, vouchers and supporting documents as required by law. For the specific case in point c of Clause 1, Article 9—expenses arising when a business authorizes or delegates employees to directly purchase goods or services for production and business purposes from 5 million VND or more, and these expenses are paid by the employees through non-cash payment methods—the documents include:

• Invoices and vouchers in accordance with accounting law.
• The company’s financial regulations or internal rules or decisions authorizing the employee to purchase.
• Non-cash payment records of the employee when purchasing goods/services under the authorization.
• Reimbursement records by the company to the employee.

Implementation for the described scenario

Based on the above regulations, companies should apply the rules according to their actual situation. Where employee-purchased expenses relate to purchases of goods or services with a value of 5 million VND or more under authorization/delegation, deductibility depends on the employee’s non-cash payment method and the availability of the required invoices, vouchers, authorization documents, non-cash payment records, and reimbursement records.