Shanghai tax bureau recently made their comments on the employee’s reimbursement after VAT reformation. We found the below points.
Q1: What kind of expense of reimbursement is deductible?
- Office equipment/ electronic consumptive material:17%;
- Transportation (May to July): 3%/5%;
- Rental of the car: 17%;
- Utility fees (electric/water): 13%/17%;
- Rental of the apartment: 11%;
- Property management: 6%;
- Postage expense: 11%/6%;
- Meeting fees/training fee: 6%;
The employee should provide the special VAT invoice;
Q2: What kind of expense of reimbursement is NOT deductible?
- Group welfare fees;
- Personal expenses/ meal expenses;
- Travel expenses (exclusive of accommodation fees);
- Expenses for tax exemption;
- The others expenses are hardly to supported by the special VAT invoice from the suppliers;
The financial person should pay attention to the details of the case. For example, when the employee have the travel expenses, if he take the public transportation, it is hard to get the transportation fee deductible. However, if he drives, for the gasoline fees, parking fees or passing fees, if he can get special VAT invoice, it can be deductive, even for the car rental fees. Further, for meeting fees, it should be exclusive of the meal fees before it can be deductible.
If you have any questions, please send the email to me.
Ms. Jojo Hu
TEL: 0086-21-68868335 ext 324 / FAX: 0086-21-68868021