This scenario involves employees paying for taxi services in cash directly to the driver, without receiving a formal tax invoice or a standard company receipt from the service provider. This is a common occurrence in Thailand, especially for street taxis.

While the expense might be genuinely for business, the lack of formal documentation poses a significant challenge for Corporate Income Tax (CIT) deductibility.

General Criteria CIT Deductibility

• High Audit Risk: Expenses supported only by internal vouchers are generally subject to high scrutiny by the Revenue Department. Without external, verifiable documentation, there’s a risk of disallowance.

• Business Purpose is Key: The company must still clearly demonstrate that the taxi trip was exclusively for business purposes (e.g., client visits, urgent errands, travel between company sites).

• Reasonableness: The expense amount should be reasonable for the claimed trip.

• No Input VAT Claim: Since there is no proper tax invoice, the company cannot claim any input VAT on these expenses.

Documentation Needed For CIT Deduction

• Detailed Internal Expense Claim/Voucher:
– Clearly stating the date, time, exact origin and destination, specific business purpose of the trip (e.g., “Meeting with ABC Co. at XYZ Building,” not just “Business Meeting”)
– Amount paid (in Thai Baht)
– Employee’s signature (claiming the expense)
– Manager’s or department head’s signature (approving the expense, confirming business purpose)

• Company Policy: A clear policy outlining procedures for claiming small, cash-based expenses when formal receipts are unavailable, emphasizing the need for detailed internal documentation.
• Travel Log: If practical, a daily or trip-by-trip log maintained by the employee or department, correlating with the expense claims.
• Supporting Evidence (if available): Emails, meeting invitations, or other documents that corroborate the business purpose of the travel.

Note: For small individual amounts (e.g., typically under THB 1,000 per trip, depending on company policy and auditor discretion), detailed internal vouchers may be accepted. However, frequent or large cash taxi expenses without external receipts remain a high-risk area.

References

• Thai Revenue Code, Section 65 ter (3) (General expense deductibility, requiring expenses to be “ordinary and necessary” and for the purpose of profit generation).
• Revenue Departmental Guidelines: While there’s no specific section for “no receipt,” general principles require expenses to be verifiable. Internal