Updated regulations applicable in 2026
Will business trip expenses be subject to personal income tax in 2026?
Not all business trip expenses are included in taxable personal income. Businesses need to make a clear distinction. travel expense allowance and Payment or reimbursement of actual expenses incurred for the business trip..
With the lump sum, The amount exceeding the applicable regulations is included in taxable personal income.. This refers to the actual cost that a business pays to suppliers or reimburses to employees. not included in taxable income When business trips are properly justified and supported by invoices and documentation as required by regulations.
| Situation | How to handle personal income tax | Points to check |
|---|---|---|
| Travel expenses will be reimbursed within the applicable limits. | No excess amount is incurred for tax calculation purposes. | Basis for determining the lump-sum payment |
| The contracted amount is higher than the applicable rate. | The amount exceeding the limit is included in taxable personal income. | Identify the correct excess portion. |
| Businesses directly pay for tickets, hotels, or services related to business trips. | Not included in taxable income if all conditions are met. | Based on the business trip authorization and supporting invoices and documents. |
| Workers pay themselves, and then the company reimburses them. | Not included in taxable income if all conditions are met. | Based on business travel authorization, internal policy, and appropriate documentation. |
| Expenses paid for personal purposes but not proven to be for business travel. | It should not be automatically considered as an amount not subject to personal income tax. | Re-evaluate the nature of the expenditure and documentation. |
Legal basis for travel expenses and personal income tax in 2026
The legal framework regarding income from salaries and wages changed in 2026. Therefore, businesses should no longer use Circular 111/2013/TT-BTC as the current basis for business trip expenses.
The current platform is Law on Personal Income Tax No. 109/2025/QH15, Effective from July 1, 2026; provisions related to income from salaries and wages of resident individuals will be applied from the 2026 tax year according to the implementing guidelines.
Decree 253/2026/ND-CP
The regulations detail the Personal Income Tax Law, including provisions directly related to lump-sum travel expenses and payments for business trips.
View Decree 253/2026/ND-CP on the Government's Electronic Information Portal.
Circular 87/2026/TT-BTC
Effective from July 1, 2026. The provisions regarding income from salaries and wages of resident individuals apply from the 2026 tax year, and this Circular replaces Circular 111/2013/TT-BTC.
See Circular 87/2026/TT-BTC on the Government's Electronic Information Portal.
Travel expense allowance: which portion is exempt from personal income tax and which portion is subject to personal income tax calculation?
With the contract-based system, the point to be determined is: The fixed rate applied and excess. It should not be understood that a business only needs to record a number in its internal regulations and the entire amount will automatically be exempt from personal income tax.
Identify the right group of workers.
Employees in businesses, civil servants, and those working in international organizations have different criteria for determining their piece-rate compensation.
Determine the applicable fixed rate.
For employees in businesses engaged in production and trading activities, the fixed allowance is linked to regulations regarding deductible expenses when calculating corporate income tax.
Separate the excess portion.
If a business pays more than the applicable regulated amount, the difference exceeding that amount is included in the taxable personal income.
Examples of lump-sum travel expense allowances.
Let's assume that after reviewing relevant legal regulations and conditions, the company determines that an appropriate daily wage for a group of employees is 500,000 VND.
- An employee goes on a business trip for 3 days and receives 1,500,000 VND: based on this assumption, no additional compensation will be incurred.
- An employee receives 700,000 VND/day for 3 days: the difference of 200,000 VND/day, equivalent to 600,000 VND, is the excess amount and is included in taxable income for personal income tax purposes, based on the assumption in the example.
The example above only illustrates how to separate the excess amount. Before applying this method, businesses must still determine the basis for their own quotas.
When are actual business travel expenses not included in taxable income?
Payments made directly by businesses to suppliers or reimbursed to employees for business trips are not included in taxable personal income when the business trip is justified and the expense is supported by invoices and documents as required.
The basis for the business trip may be found in the decision or document authorizing the trip, financial regulations, internal regulations, employment contract, or collective bargaining agreement, depending on the applicable case. Accountants should check all three layers simultaneously:
1. There was a business trip.
Expenditures must be linked to work tasks, locations, times, or verifiable work purposes.
2. There is a basis for payment.
Businesses need appropriate policies, approvals, or documentation to support payments or refunds.
3. Appropriate documentation is available.
Invoices, tickets, bookings, or related documents must accurately reflect the actual expenses incurred for the business trip.
Is having a receipt sufficient to avoid personal income tax?
Are not. Invoices are part of the documentation. Businesses also need to prove that the expenses were actually for the business trip and were reimbursed through the appropriate mechanism.
For example, a single meal or taxi receipt is not sufficient to determine personal income tax if it is not possible to identify which business trip the expense belonged to, whether it was covered by policy, and how it was approved.
Which items typically require auditing in terms of actual costs?
- Airline tickets, train tickets, or other means of transportation for the trip.
- Hotel and accommodation costs.
- Taxis, transportation within the workplace, or travel expenses to the airport.
- Meal expenses or other incidental expenses, if covered by the company's policy.
You shouldn't draw conclusions based solely on the expense item's name. Accountants need to look at... nature, basis and documentation.
What documents and records are needed for business trip expenses?
There isn't one set of documents that's the same for every business and every trip. A safer approach is to organize your documentation around three objectives: proving the business trip, proving the expenses, and proving the approval or payment process.
| File group | For example | Role |
|---|---|---|
| Based on the business trip | Proposal, decision, or document authorizing business trip | Proof that the employee is performing their job duties. |
| Internal policy | Financial regulations, travel expense regulations, and related clauses in the contract or agreement, if any. | Determine the terms, amount, and method of payment. |
| Expense voucher | Electronic invoices, tickets, bookings, and supplier documents. | Proof of actual expenditure |
| Payment documents | Bank statement, transfer slip, or appropriate payment document. | Proof of cash flow |
| Settlement documents | Expense statement, payment request, or reimbursement request | Compare the approved number with the actual number. |
Decree 253/2026/ND-CP does not make "travel permits" a separate mandatory condition for all businesses. Businesses may still require this documentation based on internal regulations or procedures; the actual documentation must be consistent with the basis for the business trip, applicable policies, and supporting documents for each expense.
If a company advances money to employees and settles it after the trip, it needs to manage the lifecycle of the advance, the repayment deadline, and any difference after settlement. See more. Advance payment and reimbursement procedures in businesses.
How does corporate income tax relate to business trip expenses?
Personal income tax (PIT) and corporate income tax (CIT) are related but not the same issue. For employees in businesses, Decree 253 refers to the fixed allowance for business travel expenses as a principle for determining deductible expenses when calculating corporate income tax.
Personal Income Tax
Are payments received by employees included in taxable income?
The focus is on the nature of the payment, the fixed amount, the basis for business travel, and the conditions under which the payment is not included in taxable income.
TNDN
Are the expenses incurred by the business eligible to be deducted?
The focus is on cost conditions, documentation, payment methods, and internal regulations applicable to the business.
The current corporate income tax framework needs to be compared with Decree 320/2025/ND-CP, the contents amended by Decree 141/2026/ND-CP, and the guidance in Circular 20/2026/TT-BTC.
See Circular 20/2026/TT-BTC on the Government's Electronic Information Portal.
Example of determining personal income tax for business trip expenses.
Businesses apply a fixed-rate system.
Let's assume that after reviewing the relevant regulations and conditions, Company A determines a suitable daily allowance of 500,000 VND for a group of employees. If an employee goes on a business trip for 3 days and receives 1,500,000 VND, then, according to the assumption, no additional allowance will be incurred.
If Company A pays 700,000 VND/day, the difference of 200,000 VND/day, equivalent to 600,000 VND over 3 days, is the excess amount and is included in taxable personal income according to the assumption in the example.
The business reimburses the actual costs.
Employee B was sent on a business trip, paid for their own airfare and hotel, and submitted the necessary documents according to regulations. The company verified and reimbursed the expenses incurred for the business trip, based on appropriate documentation.
If all applicable legal conditions are met, this refund is not included in taxable personal income.
There are invoices, but they are not sufficient proof of the business trip.
Employee C submitted meal invoices and requested payment under the name "business trip expenses," but the records did not show the business trip, the approved content, or the applicable policy.
This case should not be automatically excluded from taxable income simply because there is an invoice. Accountants need to supplement the documentation or re-determine the nature of the payment before processing personal income tax.
Frequently Asked Questions about Business Expenses and Personal Income Tax
Are travel expenses paid by private companies subject to personal income tax?
It's impossible to draw conclusions based solely on the type of business. It's necessary to determine whether the employee receives a fixed allowance or a payment for actual expenses, then check the applicable rate, the basis for business travel, and related documentation.
Are travel allowances subject to personal income tax?
The term "travel allowance" is insufficient to draw conclusions. If the company pays based on a fixed rate, the applicable rate and the excess amount need to be checked; if it is a payment or reimbursement of actual expenses, the basis for the business trip, policies, and invoices/receipts must be examined. Therefore, the nature of the expenditure needs to be classified before processing personal income tax.
Do FDI companies apply different travel expense policies compared to domestic companies?
Foreign-invested enterprises do not independently create their own personal income tax rates. For employees of enterprises operating in Vietnam, it is still necessary to compare the regulations applicable to this group of enterprises with the specific policies and contracts of the unit.
Do government agencies apply the same travel expense rates as businesses?
Not entirely. Officials, civil servants, and groups within state agencies and units have a basis for determining the lump-sum payment based on documents from competent state agencies or applicable regulations; manufacturing and business enterprises are handled according to different principles.
Is it permissible to travel on business using a personal motorbike without being subject to personal income tax?
A single "fuel-per-km" rate should not be applied as a regulation for personal income tax for all businesses. Internal policies need to be examined, taking into account the business trip and how the company reimburses actual travel expenses.
Are meal expenses incurred while on business trips subject to personal income tax?
It's necessary to check whether meal expenses are treated as a fixed allowance or as actual expenses. If it's a fixed allowance, verify the allowance amount; if it's an actual expense, check the basis of the business trip, policies, and supporting documents. Don't jump to conclusions based solely on the expense item name.
Are taxi fares or airport transfer costs subject to personal income tax?
If this is an actual expense for a business trip and the company pays based on appropriate policies and documentation, the expense is not included in taxable personal income. It needs to be compared with the trip itinerary and records.
Is there a single maximum limit for business trip allowances applicable to all companies?
There is no single figure that applies to all businesses. For employees within a business, the fixed allowance should be determined based on regulations regarding deductible expenses when calculating corporate income tax and the company's applicable records and regulations.
