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Vietnam business travel deductions: Quick guide (2024).

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Vietnam business travel deductions: quick guide (2024)

Business travel expenses in Vietnam are some of the more challenging to understand when it comes to the necessary procedures for tax deductibility. We have prepared the following as a simplified guide for claiming tax deductions for employee business travel costs.

General information

When enterprises send employees on business-related travel, they need to prepare Assignment Decisions on Business Trips in which they appoint employees to travel and clarify the purpose of the travel. Although cumbersome administratively, this does provide a basis for certainty with deductibility and can even assist with documentation. Further, enterprises need to have clear written policies on allowing employees to pay for their own costs and seeking reimbursement by the enterprise, as well as specifying any per diem allowances the enterprise will pay staff when travelling.

Air travel (ticket) costs

Air travel (ticket) costs can be treated according to one of the following three methods, which apply to domestic and international travel.

ScenarioRequirements
1. Vietnamese enterprise purchases airline flight tickets domestically, through agents or directly with airlines.VAT Invoices are compulsory for all purchases. Where the VAT-inclusive price is VND20,000,000 or higher, documentation confirming non-cash payment (i.e., bank transfer) is required.
2. Vietnamese enterprise purchases airline flight tickets through e-commerce/websites.Electronic tickets, boarding passes (including electronic boarding passes, where applicable) and documentation confirming non-cash payment are required. Where employees cannot produce boarding passes, Assignment Decisions on Business Trips can be used as alternative documentation.
3. Employees purchase tickets directly and claim costs back from Vietnamese enterprises.For these expenses to be deductible, enterprises must retain:

  • Airline Tickets (i.e., e-ticket)
  • Boarding passes (including electronic boarding passes)
  • Assignment Decision on Business Trip
  • Policy regulating reimbursement to employees
  • Payment voucher for employees’ claims
  • Non-cash payment documents of employees

Other business travel expenses

Other business travel expenses include meals, accommodation, and transportation. These expenses can be treated in two ways:

ScenarioRequirements
1. Payment for actual expenses incurred during the business trip.Adequate and lawful invoices and documents required, along with non-cash payment documentation for invoices valued at VND20,000,000 or more (inclusive of any VAT).
2. Per-diem allowances.As regulated in enterprises’ internal policies

Notes:

  • Recent Official Letters from tax authorities confirm that travel payments made using personal credit cards can satisfy the non-cash payment requirements if the other documentation requirements are also met.
  • Limits on per-diem allowances are now set by enterprises in their policies and not by the tax authorities as they were previously.
  • Invoices/receipts from overseas providers may need to be translated into Vietnamese for inspection by the Tax Department, where required.
  • VAT invoices for domestic expenses must be issued to the company (not the employee). The employee will collect all required documents for the reimbursement request.
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Updated on March 29, 2024
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