When you have a company operating in Thailand, a lot of times you or the company’s employees have to travel for the company’s business. How do you reimburse your travelling expenses, like tickets, meals, accommodation and entertainment in a way that is considered legitimate to the eyes of the Revenue Department officials?
When the Revenue Department officials audit the books of your company, if they see that you have travelling related expenses, they want to assume that you took the trip for your pleasure unless you have proof that it was for the company’s business and that all the expenses paid on the trip were reasonable for the trip and reimbursed at cost. If you cannot prove those two points, the travelling expense may get added back to your bottom line profit to recalculate the corporate income tax and you may end up having to pay more tax.
To prove that the trip was for the company’s business, you can attach some email correspondence with, or invitation from, the company in the country (or province in case it was inside Thailand) where you took the trip to. It can be trade show brochures or any other publication if you went to that particular country for the event. The best practice is to attach such supporting documents to the payment voucher in which you reimbursed for the travelling expenses.
Now to prove that the expenses paid for the trip are legitimate expenses, the general rule is that you need to have original receipts for each expense item.
– For air ticket, the safest way is to have the travel agent (if you buy the ticket from a Thai travel agent) issue a receipt in your company’s name. If you buy the ticket online or it is impossible to get a receipt issued in your company’s name, then the E-receipt sent by the online vendor may suffice. I use “may” because some Revenue Department officials are more difficult than others.
– For meals and accommodation, the Revenue Department officials that we talk to advised that you need to get receipts for those expenses from the vendors. And the safest way is for the receipts to be in the company’s name. In case of overseas trips, if it is not possible to have the company’s name of the receipts, just get the receipts.
– For taxi fares and any other expenses whose nature is that the vendors do not issue receipts for the customers, then in your travelling expense report (or expense reimbursement form), you should specify the reason why you had to pay for the expense. Like taxi fares, write down that you took the cab from where to where for what business.
– Please note that if the company just gives the employee a daily allowance for meals and taxi for example, it will likely be treated as part of the employee’s income and thus needs to be included in his personal income tax calculation. If the employee reimburses for the expenses at cost, it will not be part of his income.
– What happens if the expenses do not have receipts for is that the Revenue Department officials will very likely add them back to recalculate the corporate income tax.
For tax questions, contact www.msna.co.th.