Question 16: Limitation of propaganda advertising costs, costs of sales promotion, conference expenses

Regarding the corporate income tax, there is a regulation that limited propaganda advertising costs, costs of sales promotion, conference expenses which could only accounted for 15% of the total cost. Similar provisions can be said to be unique in the world, and creating excessive burden for businesses. The propaganda activities as advertising, sales promotion aim for the products to be widely known in Vietnam, these are necessary, indispensable and critical activities to expand business in Vietnam. Under the revised law last year, the maximum amount calculated as cost of expenses such as advertising propaganda activities has been increased from 10% to 15%, but there are still many parts could not be counted as part of the cost and be taxed considerably heavily. This greatly affects the trading company in Vietnam. Therefore, for the costs such as advertising, sales promotion activities which are necessary, indispensable for business operations, please consider all as cost with no limitation.

Tax Department

This is the Law on the amendments to the Law on Enterprise Income tax No. 32/2013 / QH13 promulgated by the National Assembly of the Socialist Republic of Vietnam on 19/6/2013. However, the Tax Department noted the opinion of businesses to report to competent authorities for consideration in the future.