Answer:
According to Article 9.3 (a) of Circular 111/2013/TT-BTC Ministry of Finance dated 15 August 2013 as amended and supplemented by Article 25.6 of Circular 92/2015/TT-BTC Ministry of Finance dated 15 June 2015, the contributions for the purposes of charity, humaneness, study promotion which are deducted from taxable income for income being salary prior to assessing tax payable by taxpayers who are resident individuals comprise:
(i) Contributions to organisations and establishments caring for and raising disadvantaged children, and disabled people and old and feeble people without any support; and
(ii) Contributions to charitable, humanitarian or study promotional funds.
However, it should be noted that not all of the voluntary contributions of the Employee will be deducted from the Employee’s taxable incomes. In order to be eligible for the deduction, the Employee must provide supporting documents proving that the Employee has actually made contributions to the organisations mentioned above and such organisations must also be established and operated in accordance with the legislation, specifically as follows:
- For organisations and establishments raising disadvantaged children, and disabled people mentioned at point (i) above must be established and operated in accordance with Decree No. 103/2017/ND-CP of the Government dated 12 September 2017 on the conditions and procedures for establishment, organisation, operation and dissolution of social protection establishments[1]. That means such organisations must have certificates of establishment registration and licenses to legally operate in accordance with the laws[2].
The legal receipts of the organisations and establishments caring for and raising disadvantaged children, disabled people and old and feeble people without any support will be documents to prove that the Employee has actually contributed to these organisations as a basis for deducting from the Employee’s taxable income.
Some types of social supporting establishments that the Employer can refer to include[3]:
– Social protection establishments taking care of the elderly;
– Social protection establishments taking care of the elderly;
– Social protection establishments caring for children from an especially difficult background;
– Social protection establishments taking care of the disabled;
– Social protection establishment caring for and rehabilitating psychopath, psychotic disorder;
– General social protection establishment taking care of subjects who needed social protection or support;
– Social service centres providing consultancy, urgent care or other necessary conditions supporting those who in need of social assistance; or
– Other social assistance establishments as prescribed by the laws.
- For charity, charitable, humanitarian or study promotional funds mentioned at point (ii) above, they must be established and operated in accordance with Decree No. 93/2019/ND-CP of Government dated 25 November 2019 on establishment and operation of social, charitable funds operating for charitable, humanitarian, and study promoting purpose and for non – profit-making purpose and in accordance with other relevant legal instruments on management and use of aid funds. That means such funds must be granted a fund establishment license and has been recognised to be eligible for operation and as members of the fund management council in accordance with the laws[4].
- The legal receipts provided by Central or Provincial level organisations or funds will be documents proving contributions to charitable, humanitarian or study promotional funds which are deductible from taxable income of the Employee.
- In order to ensure the documents proving the charity, humanitarian and study promotion purpose contributions of the Employee to the mentioned-above organisations are compliable with the laws, the Employer can request the Employee to provide the information regarding license/certificate of establishment registration and license for operation or certificate of eligibility operation of organisations, funds.
[1] Article 9.3 (a.1) of Circular 111/2013/TT-BTC Ministry of Finance dated 15 August 2013 as amended and supplemented by Article 25.6 of Circular 92/2015/TT-BTC dated 15 June 2015
[2] Article 18.1 and Article 26 of Decree 103/2017/ND-CP Government dated 12 September 2017
[3] Artcile 5 of Decree 103/2017/ND-CP of Government dated 12 September 2017.
[4] Article 17 and Article 25 of Decree 93/2019/ND-CP of the Government
