Many founders of Single-Member LLCs act as the Director and pay themselves a monthly salary. However, without a compliant structure, this entire salary expense will be rejected during CIT finalization.
1. Why is the owner's salary non-deductible?
According to Circular 96/2015/TT-BTC, salaries and insurance paid to the owner of a Single-Member LLC (owned by one individual) are NOT deductible for CIT, regardless of whether they manage the company day-to-day.
Critical takeaway:
Tax bureaus view the owner's salary as a distribution of profit, not a deductible corporate operating expense.