Wages paid to employees must have full legal documents to be counted as deductible expenses when determining corporate income tax.

This article was consulted by Lawyer Nguyen Quang Trung

Legal ground:

• Labor Code 2019;
• Circular No. 96/2015/TT-BTC.

We have received the following question:

TLT Legal, if an employee voluntarily works overtime but exceeds the maximum allowed hours, will the overtime salary during the excess hours be considered reasonable and valid for deduction?

Based on Article 107 of the Labor Code 2019, enterprises and employees have the right to agree on overtime. However, the number of overtime hours of employees must not exceed 200 hours in 01 year, or must not exceed 300 hours in 01 year in certain cases.

The control of the maximum overtime hours is to ensure the health of employees. Therefore, it is illegal for enterprises to allow employees to work overtime exceeding the maximum hours mentioned above, even if the employees do so voluntarily.

Pursuant to Article 6 of Circular No. 78/2014/TT-BTC amended and supplemented by Circular No. 96/2015/TT-BTC, in order to be included in the deductible expenses for corporate income tax, the expenses must have full legal invoices and documents according to the provisions of law.

Therefore, wages paid to employees for overtime exceeding 200 hours in 1 year or 300 hours in 1 year will not be accepted as deductible expenses when determining corporate income tax.