USING CREDIT CARDS IN ENTERPRISE (VIETNAM)

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

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