To: Department of Taxation of Da Nang City

General Department of Taxation received the Dispatch No. 661/CT-TTHT dated February 28, 2013 from Department of Taxation of Da Nang City requesting guidance on documents being basis for including payments for electronic air tickets in deductible expenses when calculating corporate income tax, declaration and deduction of value-added tax (VAT). General Department of Taxation has considered that case and hereby offers its opinions:

In Point 2.8 Section 2 Article 6 of the Circular No. 123/2012/TT-BTC dated July 27, 2012 on deductible expenses and non-deductible expenses when calculating income subject to corporate income tax:

“... Where a company purchases air tickets on an e-commerce website for its employees to go on business trips serving its business operation, the documents being basis for including payments for air tickets in deductible expenses are the electronic air tickets, the boarding passes, and proof of payments made by the company whose employees are on the flights”.

Clause 1 Article 15 of the Circular No. 06/2012/TT-BTC dated January 11, 2012 of the Ministry of Finance on conditions for deduction of input VAT:

“Legitimate VAT invoices for goods and services purchased, or proof of VAT payment during importation, or proof of VAT payment on behalf of foreign parties are presented as prescribed by the Ministry of Finance, applied to foreign organizations that do not have Vietnamese legal status and foreign individuals doing business or earning incomes in Vietnam.”

Pursuant to the regulations above, when Sao Viet Non Nuoc LLC. purchases air tickets on e-commerce websites for its employees to go on business trips serving its business operation, the air tickets and boarding passes bearing the names of such employees are the basis for including the payments for air tickets to deductible expenses when calculating corporate income tax. The proof of payment must bear the company’s name.

In case employees of the company have to buy air tickets for the business trip themselves and pay by ATM or credit cards bearing their names, and get reimbursed by the company later, such invoices and proof of payment must not be used for deduction of input VAT and must not be included in deductible expenses when calculating corporate income tax.

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ON BEHALF OF DIRECTOR OF GENERAL DEPARTMENT OF TAXATION
PP DIRECTOR OF TAX DECLARATION AND TAX ACCOUNTING DEPARTMENT
DEPUTY DIRECTOR




Nguyen Thi Thu Phuong