Scenario: Mr. Duc’s fashion company spends VND 2 billion a year on Google and Facebook ads. At CIT finalisation, the accountant disallows the entire amount for “having no VAT invoices, only Google Ireland card receipts”. Will the tax authority agree?
The principle: real, legitimate costs are deductible
The CIT Law 67/2025/QH15 (effective 1 October 2025) allows deductions for expenses simultaneously meeting three conditions: actually incurred in connection with production or business; supported by lawful invoices and documents; and paid cashless for each goods or service purchase of VND 20 million or more (thresholds and document forms per detailed rules). Google and Facebook ad spend — even paid to foreign organisations without Vietnamese presence — is inherently marketing expenditure serving the business, hence deductible where reality and legitimacy are proven. No rule specifically excludes online advertising from deductible expenses.
The practical bottleneck: documentation with foreign suppliers
The difficulty lies in the “lawful invoices and documents” condition. Google and Meta are foreign organisations operating digital platforms in Vietnam; they issue electronic invoices and receipts rather than Vietnamese VAT invoices. In practice, tax authorities accept a dossier comprising: the advertising service agreement (including electronic terms), the supplier’s payment receipts, bank statements proving cashless payment, and detailed campaign reports evidencing genuine business-related spend. Businesses must archive systematically — missing documents are the most common reason ad costs are disallowed.
Foreign contractor tax duties
Paying Google or Facebook — foreign organisations without permanent establishment in Vietnam — triggers the Vietnamese payer’s duty to withhold, declare and pay foreign contractor tax on their behalf. A critical transition note: the foreign-contractor CIT provisions of Circular 103/2014/TT-BTC (Articles 1, 2, 7, 10, 13 except point 6.11 of Article 13(1), and Article 16) were repealed from 12 March 2026; the new framework is CIT Law 67/2025/QH15, Decree 320/2025/ND-CP and Circular 20/2026/TT-BTC. Businesses must apply the current framework to withholding rates and filings. Contracts signed before 12 March 2026 under the old hybrid method continue to expiry.
Frequently asked questions
Can ads run on a personal account with the director’s personal card be deducted?
High risk. Costs must attach to the enterprise: the ad account in the company’s name (or clear authorisation), payment from the company account. Personal-card payments raise doubts about business connection and are routinely disallowed.
Is there a cap on deductible advertising spend?
Current CIT law no longer caps advertising costs as a revenue percentage (the old 10–15% cap was abolished long ago). Genuine, legitimate, business-serving ad spend is fully deductible.
Does failure to withhold contractor tax disallow the ad cost?
The two duties are independent but related: withholding is the Vietnamese party’s duty to the State; deductibility is the enterprise’s right upon meeting conditions. Non-withholding draws tax penalties and may feed doubts about the cost’s legitimacy.
This article has been quality-reviewed by the FLAW AI Legal Council.
