Per diem (Latin for “per day”) is a daily, fixed allowance provided by an employer to an employee to cover living expenses incurred while traveling for official business away from their usual place of work. These expenses typically include:

• Accommodation (Lodging): The cost of hotels, guesthouses, etc.
• Meals: Food and non-alcoholic beverages.
• Small costs related to the trip, i.e. tips, laundry, local transportation…

Per diems simplify expense reporting for both the employee and the company compared to actual expense reimbursement.

General Criteria CIT Deductibility

• Genuine and necessary business travel to a place outside of the place of business.
• The part of traveling expenses paid by the employer to the employee which the employee spent wholly and necessarily in traveling from a different place to take up employment for the first time or for returning to his place of origin after the termination of the employment
• Reasonable amount.
• Comment regarding personal income tax:
  Exempt from personal income tax up to government official rates. The exemption ceiling rate shall be periodically publicized by the Revenue Department.

Documentation Needed For CIT Deduction

• Internal documentation:
  Travel Request/Assignment Approval Form, expense report or detailed trip itinerary
  • Employee’s name and position
  • Purpose of travel (i.e. “Client meeting with ABC Co. in Chiang Mai”)
  • Destination
  • Travel dates and venue of travelling
  • Authorization
• Proof of travel
  • Flight tickets
  • Boarding pass
  • Hotel confirmation/receipts
  • Toll way receipts / taxi fare, local traveling vehicle cost
• Evidence of per diem payment to employee (bank transfer, payroll)
• Task report to the Management
• Internal per diem policy and Internal Regulation to outline on practical implication, conditions