Faculty of Management and Tourism – Taxation – Spring 2024

TUTORIAL 7: CIT (part 2)

1. Choose the appropriate cap level for the following expenses
VND1mil VND5mil 150% of
VND1.6 17% of
Non / / prime 2*Straight
CAP bil/useful salary
e person/ person/ interest -line rate
life paid
month year rate
1. Depreciation on cars of
less than 10 seats
2. Accelerated
depreciation rate
3. Interest on loans
borrowed from
individuals and non-
economic
organizations
4. Outfits in cash
5. Outfits in kind
6. Redundancy pays
7. Salary provision
8. Voluntary pension
fund and insurance
9. Business travel
allowance
10. Donations
2. Garment Co is a Vietnamese company employing 1,500 employees in 2023. The
company has a policy to provide uniforms to employees in both cash and in kind. In
2023, the total uniform expenses paid by Garment Co was VND15,500 million, of which
VND9,000 million was paid in cash to employees. 30% of the expenses in kind are not
supported by proper documents.
How much of Garment Co’s uniform expenses are non-deductible for CIT purpose in
2023?
a. VND9,000 mil
b. VND3,450 mil
c. VND10,950 mil
d. VND1,950 mil
3. CPC Co. is a Vietnamese company. On 1 March 2023, the company purchased a four-
seat vehicle for business use with a total invoiced value of VND 2,145 million, inclusive
of 10% VAT. The useful life of the vehicle was expected to be six years.

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 Faculty of Management and Tourism – Taxation – Spring 2024

What is the deductible depreciation expense related to this vehicle in 2023?

a. VND325 mil
b. VND270.83 mil
c. VND266.67 mil
d. VND222.22 mil
4. BDC JSC is a Vietnamese company listed on the stock market. The company has seven
board members, three are active members and the remaining four are non-executive
members. According to the board resolution, members in each category should receive
equal salary. Active (executive) members who participate directly in managing the
company’s operations receive a salary which is 200% of the received by non-executive
members. The company recorded a total salary expense for the board of VND13,500
million in its accounting books for the fiscal year ended 31 December 2023.
What is non-deductible salary related to board members in the year 2023?
a. VND10,000 mil
b. VND0 mil
c. VND6,000 mil
d. VND5,400 mil
5. At the end of 2023, company Bingular Co, a Vietnamese company, paid bonuses to its
board of directors of VND4,200 million. Each of the six directors is paid an equal amount
of bonus. Two out of six directors are not involved in the daily management of the
company’s business.
What is the amount of deductible salary expense which Bingular Co. will be able to
claim for the year?
a. VND4,200 mil
b. VND1,400 mil
c. VND2,800 mil
d. VND0 mil
6. Which of the following expenses is NOT deductible for CIT purpose?
a. Loan interest where the loan is used to buy the capital of other company where the
chattered capital was paid in full.
b. Issuance cost for raising equity capital
c. Sponsor for a private university to build library.
d. Life insurance for staff specified in labour contract and company policy.
7. A company recorded in business license a charter capital of VND4 billion; however, the
shareholders actually contributed VND3.5 billion. The company has borrowed VND800
million. Interest expense of which loan is considered as deductible?
a. VND500 mil
b. VND800 mil
c. VND300 mil
d. VND200 mil
8. Which type of the following expense is not deductible for CIT purpose?
a. Contribution of ACCA membership fee for the accountant
b. Depreciation of housing built for worker in industry zone

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c. Loss of good damaged due to storm without insurance

d. Unrealized exchange loss from revaluation of accounts receivable
9. Big-Mart Store (BMS) offered a promotion whereby each walk-in customer received a
package of tissue paper free if they buy from 500,000 dong. The programs were
registered with the competent authority. The cost and usual selling price of each
package is VND5,000 and VND10,000 respectively. In Feb 2023, BMS gave 1,000
packages of tissue paper to walk-in customers.
What is taxable revenue and deductible expense related to this promotional activity?
a. VND10 mil and VND0
b. VND10 mil and VND5 mil
c. VND5 mil and VND5 mil
d. VND0 and VND5 mil
10. Scorpio Plc. charged the following items in arriving its net profit for the year to 31
March 2023:
Amount written off one item in stock due to damage caused by a flood: VND4,600 mil
Cost related to issuance of new shares of Scorpio Plc.: VND16,456 mil
What would be the amount of non-deductible expenses when calculating Scorpio Plc’s
taxable profits for the year?
a. VND0 mil
b. VND4,600 mil
c. VND16,456 mil
d. VND21,056 mil
11. Cashew incurred the following interest expenses during 2023:
- Note payable signed on 1 January 2023 with a supplier VND20,000 million, 9% to
finance the company’s working capital
- VND100 million interest in respect of late payment of CIT.
How much interest is deductible for CIT purpose that Cashew may claim for 2023?
a. VND0
b. VND100 mil
c. VND1,800 mil
d. VND1,900 mil
12. Salary payable to employees approved by manager and in accordance with labor
contract: VND12,450 million, of which VND 8,240 million are paid before 31/03/2024
and the remaining are not.
How much is deductible expense for the tax year 2024?
a. VND0
b. VND12,450 mil
c. VND8,240 mil
d. VND4,210 mil
13. The 13th month salary specified in Labor contract, payable on 31/12/2022 and paid on
15/04/2023: VND 890 million.
How much is deductible expense for tax year 2023?
a. VND0

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 Faculty of Management and Tourism – Taxation – Spring 2024

b. VND890 mil
c. VND667.5 mil
d. VND222.5 mil
14. Canteen and gym facility for employees with historical cost of VND 2,750 million
(inclusive of VAT). These assets are depreciated under straight-line method for 5 years
from 2020.
How much is deductible expense for tax year 2023?
a. VND0
b. VND500 mil
c. VND550 mil
d. VND2,750 mil