Are Cash Salary Payments Deductible as Reasonable Expenses for Corporate Income Tax Purposes?
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Based on:Luật thuế TNDN số 67/2025/QH15; Nghị định số 320/2025/NĐ-CP - Ministry of Finance
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The Ministry of Finance clarified whether cash wage and salary payments to employees qualify as deductible expenses for corporate income tax (CIT) purposes under CIT Law 67/2025/QH15 and Decree 320/2025/ND-CP. A construction company pays workers between VND 11-22 million per month in three cash instalments (on the 10th, 20th, and 31st of each month), each payment below VND 20 million, supported by payroll sheets, timesheets, and cash vouchers. Under Decree 320/2025/ND-CP, salary and wage expenses are deductible for CIT if: actually paid, properly documented (payroll sheets, timesheets, cash payment vouchers), and stipulated in labour contracts or collective bargaining agreements. Applicable rules on non-cash payment thresholds must also be observed. The Ministry confirmed that cash salary payments with adequate documentation and compliant with labour, accounting, and tax regulations are deductible as reasonable business expenses. Enterprises must ensure compliance with non-cash payment regulations for applicable transaction thresholds.
Cash Salary Payments as Deductible CIT Expenses
Question Summary
A construction company pays wages of VND 11-22 million/month to employees in three cash instalments per month (10th: VND 4,990,000; 20th: VND 4,990,000; 31st: ~VND 11,000,000), supported by payroll sheets, timesheets, and cash vouchers. Are these deductible for CIT purposes?
Legal Basis
- CIT Law 67/2025/QH15
- Decree 320/2025/ND-CP dated 15/12/2025 implementing the CIT Law
- Current Labour Code
Conditions for Deductibility
- Expenses actually incurred and related to business operations
- Supported by valid invoices and documents per applicable regulations
- Stipulated in labour contracts, collective bargaining agreements, or internal financial regulations
- Compliant with payment method requirements (including non-cash payment thresholds where applicable)
Ministry of Finance Guidance
Cash salary and wage payments are deductible for CIT purposes if all the above conditions are met. Splitting salary into multiple monthly instalments does not affect deductibility, provided each payment is properly documented.
Non-Cash Payment Threshold Note
Enterprises should review current non-cash payment threshold regulations to ensure compliance for each transaction. Cash payments below the applicable threshold are permitted and qualify as deductible expenses.