Decree No. 320/2025/ND-CP This is the most important legal document of 2025, detailing the amended Corporate Income Tax Law, officially effective from December 15, 2025. In the context of the digital economy and global minimum tax rates, mastering this Decree is mandatory for accountants and managers. The document not only standardizes how revenue is determined but also sets stricter limits on expenses, especially welfare expenses and interest payments.
The promulgation of Decree No. 320/2025/ND-CP marks a turning point in the transparency of related-party transactions and digital platform business. With changes in Article 10 regarding non-deductible expenses, businesses need to review their documentation systems to ensure compliance. Correct application helps avoid the risk of tax audits and penalties, while optimizing cash flow through technology incentive policies. Let's analyze the new points in detail below with MAN – Master Accountant Network.
Overview of the scope and subjects of application of Decree No. 320/2025/ND-CP
Decree No. 320/2025/ND-CP was issued to replace the old regulations, focusing on covering modern business models. Article 1 clearly states that this document provides detailed regulations on several articles of the Corporate Income Tax Law, creating a unified legal framework for tax settlement periods from 2025 onwards.
According to Article 2 of Decree No. 320/2025/ND-CP, taxpayers include Vietnamese enterprises and foreign enterprises with income in Vietnam. A notable new point is the clarification of the definition of permanent establishment for business types that do not require a physical presence.
In particular, Decree No. 320/2025/ND-CP stipulates strict regulations on "Taxpayers acting on behalf of others". Vietnamese organizations purchasing services from abroad (e-commerce, digital platforms) are responsible for withholding and paying taxes on behalf of others. This applies even to capital transfer activities based on contracts, ensuring no loss of budget revenue.
Deductible expense limits are stipulated in Decree No. 320/2025/ND-CP.
One of the most important aspects is the list of expenditure items subject to spending limits. Decree No. 320/2025/ND-CP has standardized these figures in Article 10 to reflect the changing economic landscape.
Summary of key cost limits
Below is a table of the limit specifications stipulated in Decree No. 320/2025/ND-CP for businesses to easily monitor:
| Type of expense | Maximum limit | Note the conditions |
| Direct welfare spending | Not more than one month's average salary. | Based on actual expenditures during the year. |
| Retirement and life insurance | 5 million VND/month/person | Applies to voluntary purchases as well. |
| Clothing expenses (cash) | 5 million VND/person/year | The exhibit must be accompanied by a valid receipt. |
| Interest on loans with insufficient charter capital. | The corresponding amount cannot be deducted. | According to the capital contribution schedule under the Enterprise Law. |
| Non-credit interest | According to the ceiling of the Civil Code | Applicable to individual and organizational loans. |
| Recovering oil and gas costs | Maximum 35% (unless otherwise agreed) | According to the approved oil and gas contract |
Analysis of benefits and insurance costs
According to Clause 4, Article 10 of Decree No. 320/2025/ND-CP, expenses such as vacations, weddings, funerals, etc., are capped at one month's average salary. This is a threshold to control businesses from "pushing" expenses without third-party invoices into their accounting records.
Similarly, the purchase of life insurance for employees has been restricted to 5 million VND per month. Decree No. 320/2025/ND-CP requires businesses to specify the conditions and benefit levels in labor contracts or collective labor agreements to be considered reasonable expenses.
Determine revenue and taxable income according to the new standards.
Determining the correct timing for revenue recognition according to Decree No. 320/2025/ND-CP is a core element in avoiding reporting errors. Article 8 emphasizes the nature of the transaction rather than simply relying on the time of invoice issuance.
Time of revenue recognition (Article 8)
Decree No. 320/2025/ND-CP requires revenue to be determined when transferring ownership and use rights of goods to the buyer. For services, it is at the time of completion of service provision or completion of each part of the service provision to the customer.
Businesses should note the "other income" item in Article 3 of Decree No. 320/2025/ND-CP. Income from the transfer of capital, securities, or real estate must be accounted for separately and cannot be arbitrarily offset against normal business losses (except in special cases).
Conditions for expenses to be considered deductible expenses. according to Decree No. 320/2025/ND-CP
For an expense to be accepted when calculating... corporate income tax, Decree No. 320/2025/ND-CP, in Article 9, outlines three "golden" conditions that accountants must not overlook.
- Practicality: Actual expenses incurred that are directly related to the business operations of the enterprise.
- Legal documents: All invoices and supporting documents are in accordance with current legal regulations.
- Cashless payments: For invoices of 5 million VND or more (including tax), payment via bank transfer is mandatory. Decree No. 320/2025/ND-CP has lowered this threshold to strengthen control over public cash flow.
Tax exemption policy for innovation and technology.
Decree No. 320/2025/ND-CP strongly supports digital transformation. According to Clause 4, Article 4, income from contracts for scientific research, technology development, and innovation will be eligible for tax exemption.
However, Decree No. 320/2025/ND-CP limits the tax exemption period to a maximum of 3 years from the date of revenue generation. After this period, businesses pay taxes at the standard tax rate or the preferential rate for high-tech businesses if they meet the eligibility criteria.
FAQ – Frequently Asked Questions about Decree No. 320/2025/ND-CP
If a business delays contributing its charter capital, how are interest expenses handled?
According to Decree No. 320/2025/ND-CP, the portion of interest expense corresponding to the shortfall in charter capital will be excluded from deductible expenses. Accountants need to calculate the capital shortfall ratio to make adjustments during final settlement.
Is there a 5 million VND limit on the cost of costumes and props?
No. Decree No. 320/2025/ND-CP only limits the amount to 5 million VND per person for cash expenditures. Expenditures in kind with valid invoices are fully deductible.
Does the decree apply to the 2025 tax year?
Yes. Since it takes effect from December 15, 2025, Decree No. 320/2025/ND-CP is the direct legal basis for determining the corporate income tax obligations for the 2025 tax year of all businesses.
Conclude
Decree No. 320/2025/ND-CP creates a strict legal framework, requiring businesses to improve their financial capacity and accounting professionalism. Misunderstanding or failing to define the limits on welfare expenses, interest expenses, or insurance under this Decree will lead to significant financial losses. Businesses need to proactively update their forms and internal control procedures starting from the end of 2025.
To ensure legal safety and optimize tax compliance, partner with us. MAN – Master Accountant Network. We are a leading supplier. auditing services, MAN, specializing in accounting and tax consulting, is always at the forefront of updating regulations such as Decree No. 320/2025/ND-CP. With a team of experienced professionals, MAN is committed to providing sustainable financial solutions, helping you to conduct your business with peace of mind. Contact MAN today for professional support for your upcoming tax settlement period.
Service contact information at MAN – Master Accountant Network
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Content production by: Mr. Le Hoang Tuyen – Founder & CEO MAN – Master Accountant Network, Vietnamese CPA Auditor with over 30 years of experience in Accounting, Auditing and Financial Consulting.
