Let's learn about the matters of air ticket reimbursement and deduction~

For flight tickets employees submit for reimbursement, there are special VAT invoices, general VAT invoices, and itineraries. Can all these receipts be deducted?？What issues to note in practice？

According to the Announcement of the Ministry of Finance, the State Taxation Administration, and the General Administration of Customs on Policies Concerning Deepening the VAT Reform (Ministry of Finance, State Taxation Administration, General Administration of Customs Announcement No. 39 of 2019) and the Announcement of the State Taxation Administration on VAT Administration Issues Concerning Input VAT Deduction for Domestic Passenger Transport Services (State Taxation Administration Announcement No. 31 of 2019) and other documents, for reimbursement vouchers obtained by taxpayers for air transport:

(1)Only domestic passenger transport services can deduct input tax. International transport applies a zero tax rate or is exempt; if the international transport provided by the transport enterprise at the previous stage did not pay VAT, then there is no issue of input deduction at the next stage.

(2)Besides VAT special invoices and electronic ordinary invoices, other passenger transport tax deduction vouchers must be tickets indicating passenger identity information to calculate input VAT deduction; handwritten ones by taxpayers are invalid.

（Three）The price on the air transport electronic ticket itinerary is listed by item, including fare, fuel surcharge, and civil aviation development fund. Because the civil aviation development fund is a government fund, it is not included in the sales revenue of aviation enterprises. Therefore, the basis for calculating the deduction is fare plus fuel surcharge.

（IV）Besides the special provisions on tax deduction vouchers and input VAT calculation methods, the principles for input VAT deduction of passenger transport must comply with the basic provisions of current VAT input deduction. For example, those used for tax-exempt or simplified taxation items may not be deducted; those used for collective welfare, personal consumption, abnormal losses, etc. may not be deducted, and so on.

（V）According to Article 1 of the Announcement of the State Taxation Administration on VAT Collection and Administration Issues Such as Input Tax Deduction for Domestic Passenger Transport Services (Announcement No. 31 of 2019 of the State Taxation Administration): "domestic passenger transport services" are limited to domestic passenger transport services incurred by employees who have signed labor contracts with the unit, as well as labor dispatch employees accepted by the unit as an employing unit.

（Six）Electronic general invoices for agency passenger transport expenses issued by ticket agencies such as travel agencies and air ticket agencies at the 6% tax rate that a taxpayer obtains are purchases of "modern services - business auxiliary services" and do not belong to purchases of domestic passenger transport services, and cannot be used as deduction vouchers.

Source: Beijing Tax

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