This scenario refers to situations where an employee pays their personal mobile phone bill (invoice in their personal name) and then seeks reimbursement from the company for business-related usage.

This method carries the highest audit risk for the company’s Corporate Income Tax (CIT) deduction.

General Criteria CIT Deductibility

• High Scrutiny for Business Purpose: The burden of proof is heavily on the company to demonstrate that the reimbursed amount is exclusively for the company’s business and not for personal use. It is challenging to separate business from personal calls/data on a personal bill.

• Risk of Deemed Personal Benefit/Non-Deductibility: Without robust documentation, the Revenue Department may argue that the reimbursement is a personal benefit to the employee (taxable for PIT) and therefore non-deductible for the company, as it’s not “exclusively expended for the purpose of acquiring profits or for the business” (Section 65 ter (13)).

• VAT Input Tax: No input VAT can be claimed by the company on an invoice that is not in its name.

Documentation Needed For CIT Deduction

• Employee Expense Claim Form: Must be meticulously detailed, clearly itemizing business calls/data (if the telecom bill provides this detail) or providing a justifiable calculation of the business portion. It should clearly state date, purpose of use,
and amount claimed.

• Telecom Service Provider’s Invoice: The original bill under the employee’s personal name. While not in the company’s name, it’s still needed to show the total expense incurred.

• Strict Company Policy: A very clear, written policy outlining:
– The necessity for employees to use personal phones for business.
– The specific method for calculating and claiming reimbursement for business-only usage.
– A cap or limit on the maximum reimbursement amount, if applicable, to ensure reasonableness.

• Detailed Usage Log (Highly Recommended): An employee-maintained log of business calls/data, dates, and purposes, reviewed and approved by a supervisor.

• Supervisor/Manager Approval: Clear sign-off by a manager confirming the business necessity and the review of the claimed expenses.

• Proof of Reimbursement: Bank transfer slips or internal cash vouchers showing the reimbursement to the employee.

References

• Thai Revenue Code, Section 65 ter (3) (General expense deductibility).

• Thai Revenue Code, Section 65 ter (13) (Disallowance for expenses not exclusively or business).

• Thai Revenue Code, Section 40(1) (Assessable income from employment).

• Revenue Departmental rulings or instructions (e.g., often distinguishing between genuine expense reimbursements vs. taxable allowances/benefits).