Enterprises can buy more types of voluntary insurance for employees and include them in deductible expenses when determining CIT if certain conditions are met.
Legal grounds:
- Circular No. 78/2014/TT-BTC;
- Circular No. 96/2015/TT-BTC;
- Circular No. 25/2018/TT-BTC.
In principle, an expenditure is deductible when determining CIT if it meets the following 3 conditions:
- Actual expenses incurred in relating with production and business activities.
- Expenses with sufficient legal invoices and documents.
- Expenditures, if there are invoices for purchase of goods and services each time with a value of 20 million VND or more, must have non-cash payment vouchers.
In addition, for some types of expenses and benefits for employees, enterprises are limited to spending within a certain amount.
Specifically, based on Clause 2, Article 6 of Circular No. 78/2014/TT-BTC, as amended and supplemented by Circular No. 96/2015/TT-BTC and Circular No. 25/2018/TT-BTC as follows: :
Article 6. Deductible and non-deductible expenses when determining taxable income
2. Expenses that are not deductible when determining taxable income include:
2.11. Spending in excess of VND 3 million/month/person for: voluntary retirement fund, purchase of voluntary retirement insurance, life insurance for employees; The excess amount prescribed by the law on social insurance and health insurance for the purpose of deducting funds of a social security nature (social insurance, compulsory supplementary pension insurance), health insurance and unemployment insurance fund for employees.
Expenses for payment to the voluntary retirement fund, social security fund, voluntary retirement insurance, and life insurance for employees are included in deductible expenses not exceeding the limit specified in Clause 1 of this Article. Also must be specified in detail the conditions for enjoyment and the level of enjoyment in one of the following documents: Labor contract; Collective labor agreement; Financial regulations of the Company, Corporation, Group; The bonus regulation shall be prescribed by the Chairman of the Board of Directors, General Director, Director according to the financial regulations of the Company and the Corporation.
Enterprises shall not be included in the expenses for the above voluntary Program expenditures if the enterprises fail to fully fulfill the obligations of compulsory insurance for employees (including the case of debt of compulsory insurance premiums).
According to the above regulations, the cost of buying life insurance for employees and buying voluntary retirement insurance is limited to a ceiling of 3 million VND/month/person.
Note:
- Enterprises must clearly specify these voluntary insurance regimes in one of the following documents: Labor Contract, Collective Labor Agreement, Financial Regulation, Bonus Regulation, …
- Enterprises must strictly comply with the obligations of compulsory insurances for employees before purchasing the above-mentioned types of voluntary insurance.
