Deductible expenses for CIT in 2026 - what changed under the new law

The 2025 corporate income tax (CIT) finalization was the first time companies applied the Law on Corporate Income Tax No. 67/2025/QH15 (effective 1 October 2025 and applicable from the 2025 tax period) and Decree 320/2025/ND-CP (effective 15 December 2025). With the 2026 financial year drawing to a close, now is the time to review how expenses are recorded, before it is too late.

Three basic conditions and the VND 5 million threshold

Under Article 9.1 of Decree 320/2025/ND-CP, apart from items on the non-deductible list, an expense is deductible only if it meets all three conditions: (a) it was actually incurred and relates to the business; (b) it is supported by proper invoices and documents; and (c) for purchases of goods and services of VND 5 million or more per transaction, it is supported by non-cash payment documents. The previous threshold was VND 20 million. Some details to note:

• Several purchases from the same seller on the same day that together reach VND 5 million also require non-cash payment documents (item c1).
• Purchases made by an authorized employee and paid with the employee's own non-cash payment method are accepted if there is an invoice and the internal rules allow it, with the company then reimbursing the employee (item c2). A similar rule applies to business travel costs (Article 10.8(h)).
• Deferred-payment purchases of VND 5 million or more may be expensed first, but if they are later paid in cash, the expense must be reduced in the period of payment, even if that period is already under an inspection or audit decision (item c3).

Expenses that are now clearer or more favorable

• Research and development: R&D costs can be deducted at up to 200% of the actual cost, provided the company does not end up in a loss after applying the additional deduction (items a1 and a2 of Article 9.1(a)).
• Costs not yet matched with revenue in the period are listed explicitly: unsuccessful bids, research on new products that did not succeed, formation costs, pre-launch marketing, and destruction of damaged or expired inventory (Article 9.2(i)).
• Costs of reducing greenhouse gas emissions towards carbon neutrality and net zero, where linked to the business (Article 9.2(l)).
• Sponsorships for education, healthcare, culture, disaster relief, and for science, technology, innovation and digital transformation (Article 9.2(dd)).
• Vocational training for employees, if set out in the labor contract, collective agreement or financial regulations (Article 9.2(c)).

Caps to remember

What is still disallowed - and common traps

• Administrative fines, including late payment interest on tax (Article 10.2).
• Salaries and bonuses whose conditions and amounts are not set out in the labor contract, collective agreement or internal policies; salaries still unpaid at the finalization deadline (Article 10.8(a), (b), (c)).
• Salary of the owner of a single-member limited liability company owned by an individual, and fees paid to board members who are not directly involved in running the business (Article 10.8(d)).
• Golf memberships and golf expenses (Article 10.8(l)).
• Input VAT already credited, CIT and personal income tax (except where the company has agreed to pay employees net salaries) (Article 10.12).
• Exchange losses from year-end revaluation of foreign-currency cash, deposits and receivables; losses from revaluing foreign-currency payables are not disallowed (Article 10.16) - an important point for foreign-invested companies with foreign-currency loans.

Checklist before the 2026 finalization

1. Filter all expenses of VND 5 million or more without non-cash payment documents, and fix them within the year.
2. Update labor contracts, collective agreements and financial regulations so that conditions and amounts for salary, bonuses, welfare, training and insurance are clearly stated.
3. Reconcile compulsory insurance contributions before booking voluntary pension or life insurance costs.
4. Prepare supporting files for R&D costs if you plan to claim the additional deduction.
5. Keep a schedule of non-deductible expenses by item under Article 10.
6. Companies with related-party transactions: review interest and transfer pricing documentation under Decree 255/2026/ND-CP.

How Kaizen can help

Legitimate cost optimization starts with designing the right documentation at the start of the year. The Kaizen team, with more than 17 years of Big4 experience, helps companies review salary and welfare policies, financial regulations and payment flows under the new law. Book a free tax health check and we will point out which expenses are at risk of disallowance before your 2026 finalization.