Circular No. 20/2026/TT-BTC: Detailed Guidance on Corporate Income Tax

On 12 March 2026, the Ministry of Finance issued Circular No. 20/2026/TT-BTC (“Circular 20”), providing detailed guidance on certain provisions of the Law on Corporate Income Tax and Decree No. 320/2025/ND-CP on the implementation of the Law on Corporate Income Tax. Circular 20 introduces several notable points as follows:

Detailed guidance on supporting documents for deductible expenses

Circular 20 provides more detailed and stringent requirements regarding the documents and supporting evidence required for expenses to qualify as deductible for corporate income tax (“CIT”) purposes, including the following additional requirements:

Expenses for vocational education and employee training: Enterprises must maintain a financial regulation governing training expenses; decisions on employee nomination for training; employee training registration dossiers; and diplomas/certificates evidencing training results.

Expenses incurred by employees on behalf of the enterprise: For expenses of VND 5 million or more where employees are authorized to procure goods/services for business purposes and payments are made via non-cash methods, the enterprise must have: valid invoices and supporting documents; internal regulations/financial policies/decisions authorizing such employee payments; proof of non-cash payment made by the employee; and proof of reimbursement made by the enterprise to the employee via non-cash payment.

Registration of investment capital for expansion projects with tax authorities

For enterprises with registered investment projects, where there is any change in the investment capital for the purpose of expanding an investment project, a written notification must be submitted to the directly managing tax authority at the same time as the submission of the annual CIT finalization return, and no later than the year in which the expansion project is implemented.

During the implementation of the expansion project, if there are further adjustments to the registered investment capital, the enterprise must notify the tax authority accordingly.

Inclusion of assets formed from the Science and Technology Development Fund as deductible expenses

Circular 20 expands the categories of assets eligible for inclusion as deductible expenses. Specifically, where fixed assets are formed from the Science and Technology Development Fund for scientific research and technological development activities, and such assets (which have not been fully depreciated) are subsequently transferred for use in production and business activities, the remaining value of such fixed assets shall be recorded as other income and be depreciated and included as deductible expenses for CIT purposes.

Timing for determining taxable revenue for foreign enterprises

Circular 20 provides specific guidance on the timing for determining taxable revenue for foreign enterprises in certain cases:

Capital transfer activities: The timing is the date on which the capital transfer agreement becomes effective in accordance with applicable laws.

Securities transfers (including certificates of deposit): The timing is the date on which the transfer transaction is executed.

Derivative securities transfers (futures contracts): The timing is either (i) when the buy/sell order is matched on the stock exchange trading system, or (ii) when the futures contract reaches its settlement/maturity date.

Overall, Circular 20 restructures the approach to declaration, substantiation, and management of CIT-related expenses, while expanding the scope of deductible assets and clarifying the timing for revenue recognition in specific cases. This enhances the ability of tax authorities to more closely monitor and enforce CIT obligations, while also providing enterprises with clearer procedural guidance for tax declaration and finalization. In light of these developments, ALIAT recommends that enterprises:

• Proactively monitor, update, and review expense items to ensure proper classification of deductible expenses for CIT purposes;
• Review and supplement supporting documentation for deductible expenses to ensure compliance with the new requirements;
• In cases of investment project expansion, ensure timely notification to tax authorities regarding changes in investment capital;
• For foreign enterprises engaging in capital transfers, securities transactions, or derivative securities transactions, carefully determine and record the appropriate timing for recognizing taxable revenue for CIT purposes.