Official Letter No. 1930/CT-TTHT dated July 2nd 2020 issued by Hai Phong Tax Department about The Corporate income tax policy on depreciation expense of fixed assets during a period of suspended operation due to Covid-19 epidemic.
Due to the effects of the Covid-19 epidemic, the number of sales orders of the Company has been reduced significantly, the Company was forced to suspense a production line of an product within 03 months from June 1st 2020, the depreciation expense of fixed assets in such period, will NOT be considered it as deductible expenses for CIT purpose.
According to the current regulations, the depreciation expense of fixed assets be used for production and business activities of goods and services in the following cases can be considered as deductible expenses:
- Suspending operation due to seasonal production with a period less than 9 months;
- Suspending operation for repairing, relocating area, and maintaining the fixed assets periodically in a period less than 12 months, then continuing use it for production and business purpose.
Please kindly find detail in the attached file.