Question 22: Hotel fee of business trip

Regarding the hotel fee of business trip, the amount which is larger than VND 700.000 (around $33/day) in the urban area has been classified as subsidies (personal income). After consultation in which they stated that it is the result of the process of "continuous negotiations", this was no longer available, and if the VAT invoice made to the company, it will not become object of personal income tax. The interpretation and application of Laws of officials from Tax department are continuously changed every time, there are cases received unreasonable criticism because of the self-judgments of tax inspectors. Please build and operate the fair decrees and circulars to avoid the discretionary judgment of tax inspectors. For example, the investigating officers of Hochiminh City Tax Department pointed out to us that the actual cost of hotel in urban area for business trip exceeded VND 700.000/day will be considered subsidy, and will be subjected to personal income tax. We understand that there are limits to the maximum daily wage, and the amount beyond that portion will be taxed but certainly there is no specified regulation on the hotel costs for business trip, and this is misinterpretations of tax inspectors. Please build and operate fair decrees and circulars to avoid misunderstanding and different applying between tax officials in the Tax Department.

Answer from Tax Department

Under the provisions of the Personal Income Tax Law, in case the employees has incurred transportation fees, shelter rent (hotel fee) for business trip if there areinvoices, legal documents shown name and tax identification number of the enterprise this will not be included in the taxable income of the employee. Besides, there are no regulations on controlling level.