Official Letter No. 3705/CT-CS dated 05 June 2026 issued by the Tax Department in response to inquiries from the Phu Tho Provincial Tax Department regarding the accounting treatment of expenses and the creditability of input VAT in labor outsourcing activities provides as follows:
by KMC Consulting Company Limited
Regarding the determination of technology equipment manufacturing jobs that are eligible for labor outsourcing, the Tax Department instructs taxpayers to follow the guidance provided by the Department of Wages and Social Insurance (Ministry of Home Affairs) in Official Letter No. 515/CTL&BHXH-CSLĐ dated 31 March 2026 and by the Ministry of Science and Technology in Official Letter No. 1990/BKHCN-KHTC dated 02 April 2026.
With respect to VAT and Corporate Income Tax (CIT), the Tax Department requires taxpayers to rely on the guidance issued by the Department of Wages and Social Insurance (Ministry of Home Affairs) and the Ministry of Science and Technology in the above-mentioned documents, while also reviewing the applicable legal regulations in force during the relevant period, contractual terms, and supporting documentation to determine whether the conditions for input VAT credit/refund and deductible expenses for CIT purposes are satisfied.
Accordingly, where an enterprise incurs expenses that violate specialized legal regulations, such expenses shall not be treated as deductible expenses in determining CIT-taxable income in accordance with Clause 23, Article 10 of Decree No. 320/2025/ND-CP.
The declaration and crediting of input VAT shall be carried out in accordance with Article 23 of Decree No. 181/2025/ND-CP and Article 14 of the Law on Value Added Tax No. 48/2024/QH15.
