The interest expense can be carried forward to the next period if EBITDA is negative, following the guidelines in official letter No. 9662/TCBDU-TTHT dated 5 June 2023 from Tax Department of Binh Duong Province.
According to Tax Department of Binh Duong Province, if the net profit from business operations in the period plus (+) interest expense after subtracting (-) interest on deposits and borrowing occurring in the period, and plus (+) depreciation expense incurred in the period is negative (negative EBITDA), then the interest expense incurred in the period:
- Shall not be deductible when determining the taxable income of the current tax period; and
- Shall be carried forward to the next tax periods (up to a maximum of 5 years as prescribed in Decree 132/2020/NĐ-CP, Article 16, Clause 3, point b).
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