Circular No. 78/2011/TT-BTC guides not counting into taxable income for personal income tax the amount of support for severe illness medical treatment provided to employees and their relatives from post-tax corporate income tax revenue; welfare funds, and corporate reward funds.

CIRCULAR

Guidelines on not counting support for critical illness medical treatment for employees and their dependents from post-tax income of corporate income tax as taxable income for individual income tax purposes. from profit-sharing funds, incentive funds of enterprises welfare fund, incentive fund of the enterprise

Pursuant to the Individual Income Tax Law No. 04/2007/QH12 dated November 21, 2007;

Pursuant to the Government Decree No. 100/2008/NĐ-CP dated September 8, 2008 detailing certain provisions of the Individual Income Tax Law;

Pursuant to Decree No. 118/2008/NĐ-CP dated November 27, 2008, of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

Implementing the Prime Minister's directive in Circular No. 1485/VPCP-KTTH dated March 14, 2011 of the Government Office regarding not counting support provided by enterprises for employees and their dependents for critical illness medical treatment as taxable income for individual income tax purposes from salary and wages.

The Ministry of Finance hereby provides guidance as follows:

Article 1. Scope of Regulation

This Circular stipulates that support for critical illness medical treatment for employees and their dependents from post-tax corporate income tax revenue and from profit-sharing and incentive funds of enterprises shall not be counted as taxable income for individual income tax purposes from salary and wages.

Article 2. Enterprises may use post-tax corporate income tax revenue and profit-sharing and incentive funds to provide support for employees and their dependents suffering from critical illnesses, including:

1. Enterprises established in accordance with Vietnamese law;

2. Enterprises established according to foreign laws (referred to as foreign enterprises) with a permanent establishment or without a permanent establishment in Vietnam;

3. Organizations established and operating under the Law on Cooperatives;

4. Public and non-public institutions engaged in production and business activities;

5. Organizations conducting production and business activities generating income.

Article 3. Recipients of Support

The recipients of enterprise support are individuals suffering from critical illnesses, including:

1. Employees working at enterprises.

2. Dependents of employees: biological parents; spouse; biological children and legally adopted children.

Article 4. Basis for Support and Level of Support for Medical Treatment

1. The level of support can be a portion or the entire amount of medical expenses for employees and their dependents, but the maximum level of support shall not exceed the amount paid by the employee and their dependents for hospitalization fees after deducting the amount reimbursed by the health insurance organization.

2. Enterprises providing financial support must retain copies of hospitalization fee payment receipts confirmed by the enterprise (in cases where employees and their dependents pay the remaining amount after the health insurance organization pays directly to the healthcare facility) or copies of hospitalization fee payment receipts; copies of health insurance payment receipts confirmed by the enterprise (in cases where employees and their dependents pay the full hospitalization fee, the health insurance organization pays the health insurance benefits to the employees and their dependents) together with the payment receipts for financial support provided to employees and their dependents suffering from critical illnesses.

State-owned enterprises that have been assigned by the Ministry of Agriculture and Rural Development to conduct offshore wind power project surveys before the effective date of this Circular shall continue to implement according to the assigned documents; any new matters arising after the effective date of this Circular shall be implemented in accordance with the provisions of this Circular.

1. This Circular takes effect 45 days from June 8, 2011.

2. During implementation, if there are any issues, organizations and individuals are requested to report to the Ministry of Finance for specific guidance.