VAT input tax deduction of Travel expenses
Travel expenses refer to the following fees incurred by employees on official business trips to areas outside their regular residence:
1、 Intercity / Urban Transportation fees
If a general taxpayer who paid the following domestic passenger transportation fees for employees with legal employment relationships on business travelling, the fees‘ VAT input tax of the fees are allowed to be deducted from the output tax of sale revenue:
a. For VAT special invoice and Electronic VAT Ordinary invoice
Input tax =Tax amount listed on the invoice
b. For an air transport electronic ticket itinerary sheet with passenger identity information, the tax deducted shall be calculated according to the following formula:
Input tax = (Ticket Price + Fuel Surcharge) / (1+9%) *9%
c. For railway tickets with passenger identity information, the tax deducted shall be calculated as below:
Input tax = par value / (1+9%) *9%
d. For other passenger tickets such as highways and waterways with passenger identity information, tax deducted shall be casted as below:
Input tax = par value / (1+3%) *3%
e. Toll of bridge and gate
Input tax = par value / (1+5%) *5%
f. Highway toll
Input tax = par value / (1+3%) *3%
2. Vehicle cost
VAT Special invoice conforming to regulations shall be obtained to input tax deduction for Self-owned vehicles or rented vehicles.
.
3 Accommodation fees
A VAT Special invoice that meets the requirements must be obtained to deduct the input tax.
4. Catering fees
Even if the VAT special invoice is obtained for meal fees on the business trip, its input tax is not allowed to be credited.
5. Subsidies, allowances
No individual income tax will be levied on the travel allowances received based on the prescribed standards and the meal allowances for business trip paid or reimbursed by the company according to the standard for the employees who pay the meal fees by themselves.
Relevant policies：
1. Caishui (2016) No.36
2. Regulations for the implementation of the enterprise income tax law of the people's Republic of China
Back：E-VAT special invoice
Next：Handling fees for IIT withholding tax
| S/N | Items | Description |
| 1 | Intercity / Urban transportation fees | Travel by train, boat, plane, etc ，cost of taking a taxi or bus in the city for business trips |
| 2 | Vehicle cost | Petrol, parking, tolls, etc. during a business trip |
| 3 | Accommodation fees | Cost of rent for staying in a hotel, etc |
| 4 | Catering fees | Meal allowance for business trips |
| 5 | Subsidies, allowances | Transportation subsidy, meal allowance |
| 6 | Other fees | Booking fee ,baggage check-in , etc |
1、 Intercity / Urban Transportation fees
If a general taxpayer who paid the following domestic passenger transportation fees for employees with legal employment relationships on business travelling, the fees‘ VAT input tax of the fees are allowed to be deducted from the output tax of sale revenue:
a. For VAT special invoice and Electronic VAT Ordinary invoice
Input tax =Tax amount listed on the invoice
b. For an air transport electronic ticket itinerary sheet with passenger identity information, the tax deducted shall be calculated according to the following formula:
Input tax = (Ticket Price + Fuel Surcharge) / (1+9%) *9%
c. For railway tickets with passenger identity information, the tax deducted shall be calculated as below:
Input tax = par value / (1+9%) *9%
d. For other passenger tickets such as highways and waterways with passenger identity information, tax deducted shall be casted as below:
Input tax = par value / (1+3%) *3%
e. Toll of bridge and gate
Input tax = par value / (1+5%) *5%
f. Highway toll
Input tax = par value / (1+3%) *3%
2. Vehicle cost
VAT Special invoice conforming to regulations shall be obtained to input tax deduction for Self-owned vehicles or rented vehicles.
.
3 Accommodation fees
A VAT Special invoice that meets the requirements must be obtained to deduct the input tax.
4. Catering fees
Even if the VAT special invoice is obtained for meal fees on the business trip, its input tax is not allowed to be credited.
5. Subsidies, allowances
No individual income tax will be levied on the travel allowances received based on the prescribed standards and the meal allowances for business trip paid or reimbursed by the company according to the standard for the employees who pay the meal fees by themselves.
Relevant policies：
1. Caishui (2016) No.36
2. Regulations for the implementation of the enterprise income tax law of the people's Republic of China
Back：E-VAT special invoice
Next：Handling fees for IIT withholding tax
