1. Are Gifted Goods Deductible Expenses if the Promotion Program Is Not Registered?
Pursuant to Clause 23, Article 10 of Decree No. 320/2025/ND-CP dated December 15, 2025 of the Government on Corporate Income Tax:
Article 10. Non-deductible expenses in determining taxable income
Non-deductible expenses shall comply with Clause 2, Article 9 of the Law on Corporate Income Tax, specifically as follows:
- Expenses that do not meet the conditions or purposes of expenditure as prescribed by specialized laws, including: overtime expenses exceeding statutory limits under labor law; advertising expenses in cases where the advertised products, goods, or services are prohibited from advertising, or where such advertising requires registration with competent authorities but the enterprise fails to carry out such registration in accordance with the law; expenses serving production and business activities that are inconsistent with or exceed limits prescribed by specialized laws.
Where a taxpayer gives goods as gifts and such activity falls under a program required to be registered with competent state authorities, the company must carry out such registration in accordance with commercial law.
The determination of non-deductible expenses for CIT purposes has been specifically provided under Clause 23, Article 10 of Decree No. 320/2025/ND-CP as cited above.
Accordingly, if goods given as gifts fall under a promotion program that is required to be registered with a competent state authority, the company must complete such registration in accordance with commercial law.
If the promotion program is not registered, the value of such gifted goods shall not be treated as deductible expenses for CIT purposes.
2. Is Output VAT on Gifted Goods Deductible for CIT Purposes?
Pursuant to Clause 12, Article 10 of Decree No. 320/2025/ND-CP:
Article 10. Non-deductible expenses in determining taxable income
Non-deductible expenses shall comply with Clause 2, Article 9 of the Law on Corporate Income Tax, specifically as follows:
- Input value-added tax (VAT) that has been credited or refunded; VAT paid under the credit method; input VAT on passenger cars with 9 seats or fewer exceeding the deductible threshold under VAT laws; corporate income tax, except where an enterprise pays CIT on behalf of a foreign contractor and the contract stipulates that the contractor’s revenue does not include CIT; personal income tax, except where labor contracts stipulate that salaries are net of PIT; late payment interest under tax administration laws.
The VAT paid under the credit method referred to in this clause does not include:
Output VAT on goods given as gifts or promotional items without charge in accordance with VAT law, serving the enterprise’s production and business activities;
VAT arising from goods and services used for sponsorship as prescribed in Point d, Clause 2, Article 9 of this Decree;
Input VAT directly related to production and business activities that has not been fully credited but does not qualify for a refund.
Where input VAT has been included as deductible expenses, it shall not be credited against output VAT.
Accordingly, under Article 10 of Decree No. 320/2025/ND-CP, output VAT on goods given as gifts or free-of-charge promotional items, in compliance with VAT regulations and serving the enterprise’s production and business activities, shall be treated as deductible expenses when determining taxable income for CIT purposes.
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