In what cases do work-trip allowances not include personal income tax in Vietnam?

In what cases do work-trip allowances not include personal income tax in Vietnam?

Pursuant to Official Dispatch 9064/CTTPHCM-TTHT 2021 guiding tax policies with per diem expenses as follows:

Pursuant to Clause 2, Article 2 of Circular 111/2013/TT-BTC dated August 15, 2013 of the Ministry of Finance guiding on personal income tax (PIT) regulating income subject to PIT from salaries and wages. labour:

....

Pursuant to Article 4 of Circular 96/2015/TT-BTC dated June 22, 2015 of the Ministry of Finance guiding on corporate income tax amending and supplementing Article 6 of Circular No. 78/2014/TT-BTC (amended, supplemented in Clause 2, Article 6 of Circular No. 119/2014/TT-BTC and Article 1 of Circular No. 151/2014/TT-BTC) as follows:

.....

Based on the above regulations, in case the Company as presented has a fixed budget for per diems for employees to serve the Company's production and business activities, as stipulated in the internal policy of the Company are:

- Regarding personal income tax: expenses for employees who actually go on work-trip allowances in accordance with the provisions of Point dd.4, Clause 2, Article 2 of Circular 111/2013/TT-BTC are not included in personal income tax of employees.

.....

Thus, in principle, business expenses higher than the current State regulations will be subject to personal income tax in Vietnam. However, travel expenses for employees going on actual work-trip allowances will not be subject to personal income tax if the expenses fall into the following cases:

- For officials, civil servants and people working in administrative and non-business agencies, the Party, unions, unions and associations: The level of expenditure applies according to the guiding documents of the Ministry of Finance.

- For employees working in business organizations and representative offices: The applicable expenditure level is consistent with the level of determining income subject to corporate income tax according to documents guiding the implementation of the Law on corporate income tax 2008.

- For employees working in international organizations and representative offices of foreign organizations: The level of expenses shall comply with the regulations of the International Organization and representative offices of foreign organizations.

In what cases do work-trip allowances not include personal income tax in Vietnam? (Image from the Internet)

Who applies work-trip allowance in public service units in Vietnam?

Pursuant to Clause 2, Article 1 of Circular 40/2017/TT-BTC, scope and regulated entities:

2. Regulated entities:

a) Work-trip allowances:

- Officials, public employees and contractual employees who, as defined by law, work at regulatory agencies, public service providers, political organizations, socio-political organizations, other organizations or associations funded by state budget.

- Deputies of People’s Councils at all levels who participate in activities of People's Councils.

b) Conference expenditures:

- Professional conferences, thematic review conferences, annual review conferences, task performance training conferences held by state administrative agencies as prescribed in the Prime Minister's Decision No. 114/2006/QD-TTg dated May 25, 2006 promulgating regulations on meetings in the operation of state administrative agencies (hereinafter referred to as Decision No. 114/2006/QD-TTg dated May 25, 2006), sessions of People’s Councils and those of their Standing Committees and Boards.

- Professional conferences, thematic review conferences, annual review conferences, task performance training conferences held by public service providers.

- Professional conferences, task performance training conferences or other conferences held in accordance with regulations in the statutes of political organizations, socio-political organizations, other organizations or associations funded by state budget.

c) Particularly, the National Congress of the Communist Party of Vietnam, congresses of Party Committees at all levels in preparation for the National Congress, conferences of Party agencies, National Assembly sessions, sessions of the Ethnic Council or other committees of the National Assembly, and sessions of the National Assembly Standing Committee must comply with specific regulations of competent authorities.

What are conditions for payment of work-trip allowances in a public service unit in Vietnam?

According to Article 3 of Circular 40/2017/TT-BTC, general provisions on work-trip allowances:

[1] They must fulfill their assigned tasks;

[2] They are sent on work trips by heads of their agencies or units, or they are invited to join the work trips;

[3] Have enough documents for payment including:

- The travel document of the person traveling on business has the confirmation stamp of the agency or unit where the business is coming (or of the hotel or guesthouse where he/she stays).

- Document or work plan approved by the head of the agency or unit; documentary; appointment; Documents required to join the working group.

- Bill; Legal ticket purchase documents as prescribed by law when traveling on business by means of transport or receipt from the vehicle owner.

Particularly, air ticket payment documents, in addition to ticket stubs or electronic tickets, must be accompanied by boarding passes according to the provisions of law. In case of losing your boarding pass, there must be confirmation from the agency or unit sending you on a work-trip allowance (in case of actual travel expenses being paid).

- A list of the length of the work-trip allowance to be submitted to the head of the agency or unit for approval of payment (in case of flat payment for travel expenses).

- Legal invoices and vouchers for renting rooms according to the provisions of law (applicable when paying for rent according to actual invoices).

*Note: In case of using a car when traveling on business, written proof of payment of per diem is required; New business plan or paper dispatch on work, accompanied by a list of the length of the work-trip allowance.

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