Under the Law on PIT, monetary or non-monetary benefits other than salaries and wages paid by the Employer, which are enjoyed by Employees in any form will be considered to be taxable income. However, expenses for means of transporting Employees from dwelling houses to workplaces and vice versa will not be included in the taxable income of Employees according to the enterprise’s regulations.
Thus, it can be understood that if Employers incur expenses for transporting Employees (whether collective or individual) from their home to their workplaces and vice versa, the expenses will not be included in their taxable income with regard to PIT even if the vehicle is only for picking up and taking home a particular individual. However, in order to understand properly that the expenses for means of transporting Employees from home to workplace and vice versa are not subject to PIT in accordance with law, Employers should note the following two issues:
- The purpose of equipping the means of transporting Employees is to serve the corporate business based on the route from home to workplace and vice versa. Therefore, if Employers allow Employees to use corporate car for personal use and pay for all arising expenses such as gasoline, driver hire, toll, maintenance fee etc., the expenses for the vehicle to serve other affairs outside the corporate business will be included in Employees’ income subject to PIT. Therefore, for avoidance of any doubt, Employers should specify in the company’s vehicle use regulation or in LCs signed with Employees who are granted any vehicles; and
The initial purchase price of the vehicle will not be included in the income subject to PIT, as the vehicle is owned by the enterprise and the purchase price of the vehicle is to create fixed assets for the enterprise. Therefore, when determining whether any income is liable to PIT or not, it is based only on expenses such as gasoline, driver hire, toll, maintenance fee etc…, without including the initial car purchase cost.
Article 2.2 (đ) Circular 111/2013/TT-BTC dated 15/08/2013 and Article 11.4 Circular 92/2015/TT-BTC dated 15/06/2015 amending and supplementing Circular 111/2013/TT-BTC dated 15/08/2013