One of our accounting and payroll clients asked us about their employee claims.

Question:

We understand that the staff claims without original copy or receipts/tax invoices will be deemed non-deductible expenses when we submit yearly tax. Can you explain more on this so we can implement necessary steps?

Answer:

Normally, a company can claim expenses that have original receipts and tax invoices issued in the company name. And if the nature of the expense is one that has no receipt, like taxi fares, then the claim should be accompanied with a little explanation of the expense, like from where to where and for what business.

For expenses without original receipts/tax invoices, like when your employees buy things but did not ask the vendors for them, you have to book the expenses as non-tax deductible. Thus, please remind them to request for an official receipt/tax invoice every time. For example, when they buy things from a supermarket, they need to tell the supermarket to issue a receipt in the company name. For the case of buying things or ordering food through online applications (e.g. from Grab, Lineman or Foodpanda), you may use the e-receipts which are in the company name to be the accounting transaction supporting documents. However, because it is for food, if you pay for food for your employees, you need to add the amount to their monthly income to calculate personal income tax too. But if it is to entertain clients, then you may book it as an entertainment expense.

For air tickets and hotel stay for business purposes, you have to remind them also to request receipt/tax invoice in the company name otherwise, it will be recorded as non-tax deductible expenses.

If you need payroll, accounting or tax services, contact MSNA for assistance. We are the official accountant of the American Chamber of Commerce in Thailand and has been serving the international business community for over 25 years now.