Can Transportation Support Be Offset Against Purchase Payments?

Based on the issuance of Circular No. 28812/CTHN-TTHT dated May 17, 2024, guiding tax policies regarding transportation cost support.

According to the Hanoi Tax Department, if a company provides financial support for transportation to the buyer to boost product consumption, upon receiving the support, the buyer must issue a VAT invoice to the company and declare and pay VAT.

For transportation cost support where both parties agree to offset debts (to be deducted from the value of purchased goods) and this is specifically stipulated in the contract/contract annex, with a detailed list, a confirmation document of transportation support costs between the two parties, the company can be accounted for as deductible expenses when calculating corporate income tax as prescribed in Article 4 of Circular 96/2015/TT-BTC.

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