How to deduct travel expenses and subsidies paid by enterprises before tax

It can be deducted as an expense (e.g. selling expenses) from the gross income.

According to the provisions of the Enterprise Income Tax Law of the People's Republic of China and its implementing regulations, the necessary and normal expenses incurred by an enterprise that are directly related to the income obtained and in line with the production and operation routine are allowed to be deducted when calculating the taxable income.

The pre-tax deduction of enterprise income tax should comply with three basic principles: authenticity, relevance and reasonableness. Authenticity is the first principle of pre-tax deduction, and taxpayers are required to provide legal and valid proof to prove that the expenditure is actually incurred.

Travel expenses refer to the inter-city transportation expenses, accommodation expenses, food allowance expenses and intra-city transportation expenses incurred by staff members on official business trips outside their place of residence.

Travel Expense Classification:

Transportation expenses: tickets, ferry tickets, air tickets, etc. on business trips;

Vehicle expenses: If you bring your own vehicle, the cost of fuel, tolls, parking fees, etc. on the road on a business trip;

accommodation fees; Subsidies and subsidies: error subsidies, transportation subsidies, etc.;

Transportation expenses in the city: bus and taxi expenses at the destination;

Incidental expenses: baggage check-in, booking fees, etc.

According to Article 52 of the Measures for Pre-tax Deduction of Enterprise Income Tax, if a taxpayer incurs reasonable travel expenses, conference expenses and board of directors fees related to its business activities, and the in-charge tax authorities require supporting materials, they shall be able to provide legal documents to prove their authenticity, otherwise, they shall not be deducted before tax. Supporting materials for travel expenses should include: name, place, time, task, payment voucher of the business traveler, etc.

Proof of conference fee should include: meeting time, place, attendees, content, purpose, fee standard, payment voucher, etc.

Expenses such as transportation expenses, accommodation expenses, food subsidies, and luggage freight expenses incurred by enterprises on business trips are all travel expenses. Is it possible to deduct travel expenses before tax?

Is the travel allowance deductible before tax?

Article 8 of the Enterprise Income Tax Law stipulates that reasonable expenses actually incurred by an enterprise in connection with the acquisition of income, including costs, expenses, taxes, losses and other expenses, are allowed to be deducted in the calculation of taxable income. Article 27 of the Regulations for the Implementation of the Enterprise Income Tax Law stipulates that:

The relevant expenses mentioned in Article 8 of the Enterprise Income Tax Law refer to the expenses directly related to the income obtained. The reasonable expenditure mentioned in Article 8 of the Helu Enterprise Income Tax Law refers to the necessary and normal expenditure that is in line with the routine of production and business activities and should be included in the current profit or loss or the cost of relevant assets.

The pre-tax deduction of enterprise income tax should comply with three basic principles: authenticity, relevance and reasonableness, and taxpayers are required to provide legal and valid vouchers to prove that the expenditure is indeed actually incurred. Therefore, the travel allowance can be deducted as an expense before corporate income tax, but it should be able to provide legal evidence to prove its authenticity.

How to account for reimbursement of travel expenses after a business trip?

Travel expenses are advanced in advance.

Debit: Other receivables.

Credit: cash on hand.

When the employee comes back for reimbursement, the portion that was spent.

Borrow: Administrative expenses.

Credit: Other receivables.

Rest. Borrow: cash on hand.

Credit: Other receivables.

At the time of retroactive payment. Borrow: Administrative expenses.

Credit: cash on hand.

Other receivables.

Travel expenses refer to the city transportation expenses, accommodation expenses, food subsidies and intra-city transportation expenses incurred by staff members on official business trips to areas other than their permanent residence.

The main categories of travel expenses:

Transportation expenses: tickets, ferry tickets, air tickets, etc. on business trips;

Vehicle expenses: For example, the cost of fuel, tolls, parking fees, etc. incurred on the road of self-driving vehicles.

Accommodation fee: accommodation invoice, etc.

Transportation expenses in the city: buses, taxis, etc.

Subsidies and subsidies: subsidies for missed meals, transportation subsidies, etc.

Miscellaneous expenses: ticketing, baggage check-in fees, etc.

According to the provisions of the second paragraph of Article 2 of the Notice of the State Administration of Taxation on Printing and Distributing the Provisions on Several Issues Concerning the Collection of Individual Income Tax (Hongshou Guo Shui Fa No. 1994 089), the travel allowance obtained by an individual due to a business trip in accordance with the relevant regulations shall not be subject to individual income tax. Although the current individual income tax policy does not determine the specific standard for travel allowance, in practice, if it exceeds the payment standard stipulated by the local financial department, it may be recognized by the tax authorities as a disguised payment of wage subsidies and allowances, and individual income tax will be levied.

Therefore, it is suggested that if the enterprise can use the reimbursement according to the facts, it will be reimbursed according to the facts; If it is difficult to reimburse according to the facts, the enterprise shall establish a travel expense subsidy standard (as close as possible to the payment standard stipulated by the local financial department) and a reimbursement system, standardize the reimbursement procedures, and as long as it can realistically have enough basis to show that the travel expense subsidy is not a disguised wage subsidy or allowance, individual income tax can be exempted.

1. According to the law, all kinds of subsidies fall within the scope of wages and should be taxed together with the total wages of the carapace, so they should not be taxed separately, and this is not a new law, but an original provision. 2. If the travel allowance is paid in the form of wages, individual income tax shall be paid in excess of it (wages include various subsidies). Travel expenses are an important recurrent expenditure item of administrative institutions and enterprises, mainly including transportation expenses, accommodation expenses, food expenses and miscellaneous expenses incurred during business trips.