Ms. Nguyen Thanh Dieu’s school (in Ho Chi Minh City) is a public non-business unit that establishes  a center. The center has its own tax code, account and seal. Recently, the center sponsored the school equipment for teaching, learning and activities (with sponsorship records).

Ms. Dieu would like to ask, does the above-mentioned sponsorship expenses count toward the deductible expenses when calculating the corporate income tax (CIT)?

Regarding this issue, Hochiminh City Tax Department has opinions as follows:

Pursuant to Article 4 of the Circular No. 96/2015 / TT-BTC dated June 22, 2015 of the Ministry of Finance amending and supplementing Article 6 of Circular No. 78/2014 / TT-BTC guiding CIT (amended) amending and supplementing in Clause 2, Article 6 of the Circular No. 119/2014 / TT-BTC and Article 1 of the Circular No. 151/2014 / TT-BTC of the Ministry of Finance) stipulating deductible and non-deductible expenses when Determine your taxable income. Whereby:

“2. The expenses below are not deductible when calculating taxable income:

Provision of sponsorship for education (including sponsorship for vocational education) for illegitimate recipients according to Point (a) or without documentation mentioned in Point (b) below:

a) Sponsorship for education include: Sponsorship for public and private schools of national education system as prescribed by regulations of law on education, provided such sponsorship is not meant to contribute capital or buy shares of schools; Sponsorship for infrastructure and equipment serving teaching and learning in schools; Sponsorship for regular operations of schools; Sponsorships for students of compulsory education institutions, vocational education institutions, and higher education institutions prescribed in the Law on Education (direct sponsorship for students, sponsorship provided via educational institutions, organizations permitted to raise sponsorships as prescribed by law); Sponsorship for competitions in the schools subjects taught by learners; Sponsorship for establishment of scholarship funds as prescribed by regulations of law on education.

b) Documents about sponsorship for education include: certification of sponsorship bearing the signature of the representative of the sponsoring establishment, representative of the legitimate educational institution, students (or an organization permitted to raise sponsorships) that receives the sponsorship (form No. 03 / CIT enclosed with Circular No. 78/2014 / TT-BTC); invoices / receipts for purchase of goods (in case of in-kind sponsorship) or proof of payment (in case of monetary sponsorship).

Based on the above stipulations, according to Ms. Dieu's presentation, the center has the property funding which is equipment used for teaching, learning and activities of schools and schools established under the law on education. If the grant is for education, the above-mentioned donation shall be included in deductible expenses when calculating EIT if there are sufficient funding dossiers as prescribed at Point 2.22, Clause 2, Article 6 of the Circular No. 78/2014 / TT-BTC (amended). amended in Article 4 of the Circular No. 96/2015 / TT-BTC).