Are fuel and mobile allowances subject to the compulsory SI contribution requirement?
Pursuant to clause 3 of Article 30 in the Circular No. 59/2015/TT-BLDTBXH dated December 29, 2015 and point 2.3 of clause 2 of Article 6 in the Decision No. 595/QD-BHXH dated April 14, 2017, the following incomes are not classified as monthly wages or salaries subject to the obligation to pay compulsory SI contribution, including:
- Employee bonuses or rewards prescribed in Article 103 of the 2012 Labor Code; rewards for employee’s initiatives or inventions;
- Mid-shift meal allowance;
- Fuel, mobile, mileage, accommodation or childcare allowance payments;
- Benefits paid in case an employee’s close kin dies or gets married; on an employee’s birthday;
- Benefits granted to employees in difficult situation due to any accident at work or occupational disease;
- Other benefits and allowances which are mentioned in a separate clause included in labor contracts under clause 11 of Article 4 in the Decree No. 05/2015/ND-CP.
=>> This means that fuel and mobile allowances are not subject to the compulsory SI contribution requirement.
Are fuel and mobile allowances subject to the PIT tax payment requirement?
Under Clause 2 of Article 2 set out in the Circular No. 111/2013/TT-BTC, incomes obtained from wages or salaries include:
a) Salaries, wages and similar cash or in-kind payments.
b) Allowances and benefits (except those prescribed in point b of clause 2 of Article 2 in the Circular No. 111/2013).
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dd) Other cash or non-cash benefits in addition to wages or salaries paid by employers which taxpayers receive in any form.
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dd.4) Payment of stationery expenses, business travelling allowance, phone bill or uniform allowance, etc., which is greater than the current statutory rates,…
In addition, there are several documents providing specific instructions about this matter, including:
Official Dispatch No. 2192/TCT-TNCN dated May 25, 2017 of the General Department of Taxation:
“If the representative office Reifenhauser Private Ltd in Ho Chi Minh city makes the lump-sum fixed-rate payment of fuel expenses for travel to and from work to each of their employees, such employee income must be subject to PIT.”
Official Dispatch No. 79557/CT-TTHT dated December 3, 2018:
"...
Regarding house rent, fuel or hardwork allowances: The Company may charge them into deductible expenses for calculation of the income subject to CIT if they meet regulations laid down in the Circular No. 96/2015/TT-BTC, and as the employee income subject to PIT.
Regarding the mobile allowance: If a lump-sum payment of personal phone costs is charged into the deductible expenses for determination of the income subject to CIT under the Law on Corporate Income Tax, it will be deemed as a deduction from the taxable income.
In case where the company pays the phone allowance greater than the prescribed lump-sum payment, the excess will be charged into the taxable income.”
=>> Thus, according to the aforesaid regulations, if the company pays house rent and/or fuel allowance (for travels to work) at the monthly fixed rate, mobile and/or hardwork allowance to an employee, eligibility requirements and payment rates must be specified in one of the following documents: Employment Contract, Collective Bargaining Agreement; Financial Regulations of Company, General Company or Incorporation; Regulations on Rewards decided by the Chair of a Management Board, General Director or Director in compliance with Financial Regulations of Company or General Company or Incorporation,
- Regarding house rent, fuel or hardwork allowances: The Company may charge them into deductible expenses for calculation of the income subject to CIT if they meet regulations laid down in the Circular No. 96/2015/TT-BTC and as the employee income subject to PIT.
- Regarding the mobile allowance: If a lump-sum payment of personal phone costs is charged into the deductible expenses for determination of the income subject to CIT under the Law on Corporate Income Tax, it will be deemed as a deduction from the taxable income. In case where the company pays the phone allowance greater than the prescribed lump-sum payment, the excess will be charged into the taxable income.
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