0B Bakery Co.

Ltd engaging in cake production has the following data of 10 expenses

for the tax year

1. Remuneration with legitimate vouchers paid to the founding members of companies who
do not directly take part in the administration of goods production: VND 110,000,000
Bob’s mother - An is the co-founder of B Bakery Co. Ltd. After investing VND 500,000,000,
An let Bob manage the entire company, she did not take part into any work of administration
of goods production.
Remuneration paid for An VND 110,000,000:
Legitimate voucher
directly take part in the administration of goods production
-> this expense is non-deductible expense

2. Donation to the fund for children with fatal diseases: VND 130,000,000
lack of legitimate information: recognised by competent state agency
-> non-deductible

3. Life insurance fees for employees (lack of labor contracts) paid to an insurance company:
VND 400,000,000
Bob’s company bought life insurances for 2 new employees at the delivery department, but
there was a lack of labor contracts and there was no document about 2 new employees
-> non-deductible

4. Uniform expense for 400 employees in 1 year: VND 2,375,000,000

B Bakery Co. Ltd spent VND 5,937,500 per year on uniforms for 400 employees with labor
contracts, legitimate invoices and vouchers.
for business purpose
-> partly deductible
Deductible amount: 400 * VND 5,000,000 = VND 2,000,000,000
Non-deductible amount: (400 * VND 5,937,500) - VND 2,000,000,000 = 375,000,00

5. 10-year Depreciation of a 16-seat car for employees delivery, corresponding to the

historical cost of VND 1,368,850,000: VND136,885,000
B Bakery Co. Ltd bought a 16-seat car for picking up some employees with labor contracts
far from the company with VND 1,368,850,000. Life span is 10 years. This payment was
made with legitimate invoice
for business purpose
-> deductible (the value of the car is less than VND 1,600,000,000)
Deductible amount: 1,368,850,000/10 = 136,885,000

6. Expense for penalty: VND 5,000,000

The 16-seat car ran the red light and got caught by the police, then the company had to pay
a fine of 5,000,000 to settle the matter. This situation violates the traffic Law
-> non-deductible

7. Marketing expense: VND 93,870,000

B Bakery Co. Ltd spent 93,870,000 to hire content creators for product marketing with
legitimate invoices.
for business purpose
-> Deductible

8. The rent cost of headquarters for the production and sale of cakes paid in advance for 5
years: VND 1,350,000,000. This transaction was proved by documents stipulated by
legislation
business purpose
-> deductible (1 year only)
deductible amount: VND 1,350,000,000/5 = VND 270,000,000

9. The costs of ingredients: VND 180,000,000

such as flour, sugar, eggs, butter and other necessary components for making the cakes.
These expenses are directly related to the production of the cake. The payment transaction
had legitimate invoices and documents.
-> deductible

10. Private & domestic expenses: VND 67,000,000

Because of the increase of the company’s revenue, Bob decided to take his family on a
vacation. All the expenses incurred were paid by his company. These expenses were not
actual expenses used for generating income or for business purpose

-> non-deductible

Bank payments are applicable to all purchase transactions of the company