Official Letter 62652/CTHN-TTHT dated 25 August 2023 issued by Hanoi Tax Department provides guidance on the tax treatments of the cost of the fixed assets paid by employees’ credit card on behalf of the company as follows:

In case a company authorizes its employees to make payments, for the acquisition of the company’s fixed assets via their personal credit cards, the company is allowed to claim input Value Added Tax (VAT) of the purchased fixed assets and charge the fixed assets’ costs to its tax-deductible expenses if the following conditions are met:

1. The company reimburses the cost of the fixed assets to its employees via bank transfer from the company’s tax-registered bank account to the employees’ bank account;
2. The assets are used for the company’s business activities;
3. The purchases of the assets and payment arrangement must be substantiated by supporting documents including input VAT invoices containing the company’s name and tax code, power of attorney between the company and the employees, and bank statements of both the company and the employees; and
4. The payment arrangement is explicitly stated in the company's internal policy.

Companies that have had such payment practices should be well aware of the conditions for claiming input VAT credit and tax deductions provided in the letters and are well-prepared for those conditions.

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