Most of Peoples are using credit cards for Shopping, online purchase, at Food Zone etc. There are too many types of credit cards are offered by different banks. Nowadays, the trend of using credit cards for payment in enterprises is increasing significantly in Vietnam.
Enterprise can register a credit card under name and ownership of the Company. The Board of Management, Purchasing Officers, and employees on business trip… may hold this card to make payment for the Company.
But, in case of paying expenses using personal credit card, how is the treatment for tax deduction?
On 25 Nov 2016, General Department of Taxation has issued Official Letter No. 5465/TCT-KK regarding VAT deduction for expenses paid by personal credit card, accordingly: In case the Company delegates employees to use personal credit card for purchasing goods, services from suppliers, then the Company makes payment by transferring via the Company’s bank accounts registered with Taxation Department to bank accounts of employees. If such case is specifically stated in financial management regulations or there is a Decision about the delegation of Company to employees; at the same time the Company has supporting documents verifying goods, services used in production and business activities, including:
– Invoice for purchasing goods and services under name and tax code of the Company;
– Documents relating to the delegation of Company to the employee;
– Remittance documents from credit account of employees to suppliers’;
– Remittance documents from Bank account of Company to employees’;
then such payment method is considered to meet the requirements of non-cash payment vouchers which is the basis to declare, deduct VAT input. This cost is considered to be deductible expenses when determining Corporate Income Tax.
The Company has the responsibility to create and supervise a list of personal credit card of these employees to provide to Tax Authority when required.

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