Employee Reimbursement: Avoid 5 Tax Mistakes in 2026

Updated: October 30, 2026

A purchasing manager may urgently need equipment for a client project. Instead of waiting for the company’s payment process, an employee buys the items using a personal bank account and requests reimbursement afterward. The transaction may be commercially legitimate, but the way it is authorized, paid and documented can affect its treatment for corporate income tax (CIT).

Employee reimbursement is a common operational procedure in businesses operating in Vietnam, particularly companies with travelling staff, multiple offices or small procurement teams. Since the revised CIT framework took effect, however, finance departments should pay close attention to the VND 5 million non-cash payment threshold and the documents supporting purchases made by employees on behalf of their employers.

This guide explains the 2026 rules for employee reimbursement, provides a practical payment and documentation checklist, and distinguishes deductible CIT expenses from input VAT credit requirements.

1. Employee Reimbursement: What Changed Under Vietnam’s 2026 CIT Framework?

The starting point is Law No. 67/2025/QH15 on Corporate Income Tax (Luật Thuế thu nhập doanh nghiệp số 67/2025/QH15), effective October 1, 2025. It establishes the general conditions for deductible expenses under Clause 1, Article 9.

The Government subsequently issued Decree No. 320/2025/ND-CP detailing certain provisions and implementation measures of the Law on Corporate Income Tax (Nghị định số 320/2025/NĐ-CP quy định chi tiết một số điều và biện pháp để tổ chức, hướng dẫn thi hành Luật Thuế thu nhập doanh nghiệp), effective December 15, 2025. Point c, Clause 1, Article 9 requires qualifying expenses for purchases of goods, services and other payments of VND 5 million or more per transaction to have non-cash payment documentation.

On March 12, 2026, the Ministry of Finance issued Circular No. 20/2026/TT-BTC detailing certain provisions of the Law on Corporate Income Tax and Decree No. 320/2025/ND-CP (Thông tư số 20/2026/TT-BTC quy định chi tiết một số điều của Luật Thuế thu nhập doanh nghiệp và Nghị định số 320/2025/NĐ-CP). Point b, Clause 13, Article 3 specifies the documentation for employer-authorized purchases made and paid for by an employee using a non-cash payment method.

Decree No. 320 was later amended by Decree No. 141/2026/ND-CP, which introduced separate changes including CIT exemptions based on annual revenue. Those changes should be read alongside the current framework; they do not replace the documentation requirement discussed here.

Official texts: Law No. 67/2025/QH15, Decree No. 320/2025/ND-CP, and Circular No. 20/2026/TT-BTC.

2. Can a Company Deduct Purchases Paid for by an Employee?

Yes, potentially. Employee reimbursement does not automatically make an expense non-deductible simply because the supplier was paid from an employee’s personal account. However, a business must demonstrate that the expense is genuinely connected with its operations and meets the applicable invoice, documentation and payment conditions.

For employee reimbursement covered by Point b, Clause 13, Article 3 of Circular 20, the rule concerns an employee who is authorized or assigned to purchase goods or services for business purposes with a value of VND 5 million or more, and who makes the supplier payment using a qualifying non-cash payment service.

The regulation identifies four categories of evidence: lawful invoices and supporting accounting documents; an internal financial regulation, internal policy or company decision establishing the employee’s authorization; evidence of the employee’s non-cash payment to the supplier; and evidence of the company’s non-cash reimbursement to the employee.

In other words, employee reimbursement involves two distinct payment legs. The first is the employee-to-supplier payment. The second is the company’s reimbursement of the employee. A company should retain evidence of both rather than assuming that a bank transfer at one stage is sufficient.

3. The VND 5 Million Employee Reimbursement Checklist

Review item	What the finance team should retain	Why it matters
Business purpose	Purchase request, business justification or relevant project file	Connects the expense to business activities
Authorization	Financial policy, internal regulation or written assignment	Shows the employee was permitted to buy on the company’s behalf
Invoice	A valid invoice and related documentation appropriate to the transaction	Supports the recorded expense
Employee payment	Bank transfer, card or other qualifying non-cash payment record	Proves how the supplier was paid
Company reimbursement	Non-cash transfer from the company to the employee	Documents the second payment leg
Reconciliation	Expense claim matched to invoice, payment and accounting entry	Reduces duplicate or unsupported reimbursements

This checklist reflects the documents expressly identified by Circular 20 and additional practical internal-control records. It is not a separate statutory form issued by the Ministry of Finance.

3.1. What if an Employee Paid the Supplier in Cash?

For the authorized-purchase scenario of VND 5 million or more covered by Point b, Clause 13, Article 3, the required evidence includes the employee’s non-cash payment. A cash payment by the employee is therefore a significant deductibility risk, even if the company later reimburses the employee through a bank transfer.

When handling employee reimbursement, the employer should not assume that an internal expense claim or a valid invoice alone cures the missing payment evidence. Finance should review the exact facts and any applicable specific rules before claiming the deduction.

3.2. What if the Company Reimburses the Employee in Cash?

The same provision requires evidence of the company’s non-cash reimbursement. Accordingly, employee reimbursement in cash for a transaction covered by this rule creates another compliance risk.

A practical employee reimbursement policy is to use documented non-cash payment channels for both legs of qualifying employee purchases and maintain consistent reference numbers linking the payments to the expense claim.

3.3. Do Purchases Below VND 5 Million Always Qualify?

No. The VND 5 million threshold does not eliminate the basic CIT conditions. An expense must still be genuinely related to business activities, properly supported and outside the non-deductible categories.

The transaction value, multiple purchases from the same supplier on the same day and any special provisions should be reviewed rather than assuming that every small receipt automatically qualifies. Splitting a genuine purchase into smaller payments solely to bypass documentation controls is not a sound compliance practice.

4. Practical Example: An Employee Buys Office Equipment for VND 8 Million

Assume a foreign-invested consulting company needs office equipment for a project. Its operations manager receives internal authorization to purchase equipment valued at VND 8 million.

The manager buys the equipment using a personal bank card. The supplier issues the appropriate invoice and the manager submits the invoice, purchase approval and bank payment record to the finance team. After checking the expense claim, the company reimburses the manager’s personal bank account by bank transfer and keeps the transfer confirmation.

This employee reimbursement arrangement provides the types of authorization, invoice and non-cash payment records identified in Point b, Clause 13, Article 3 of Circular 20. It may meet the documentation conditions for CIT deduction, provided the underlying business purpose and other legal requirements are also satisfied.

Now consider a variation: the manager pays the same VND 8 million in cash and later receives bank reimbursement. The missing non-cash supplier-payment evidence means the company should not simply treat the two transactions as equivalent.

This employee reimbursement example is illustrative, not an opinion on an actual taxpayer’s records.

5. What About Expenses Not Yet Paid When They Are Recorded?

Employee reimbursement should be distinguished from an ordinary supplier invoice that has been recorded but remains unpaid.

Point c3, Clause 1, Article 9 of Decree 320 and Point c, Clause 13, Article 3 of Circular 20 address certain purchases of VND 5 million or more that are unpaid when the expense is recognized. The expense may be deductible at that point when the prescribed supporting contract and delivery or acceptance records exist. When the company later makes the payment, the applicable non-cash evidence is required.

If the business subsequently pays in cash without the required non-cash documentation, Decree 320 provides for an adjustment reducing the deductible expense in the tax period when that payment occurs.

Therefore, “unpaid at the time of recognition” is not the same as “paid in cash through an employee.” Finance departments should apply the relevant rule to the actual transaction sequence rather than using one general reimbursement procedure for every situation.

The Government has addressed this distinction in its March 2026 explanation of unpaid purchases and deductible expenses.

6. CIT Deductibility Is Not the Same as Input VAT Credit

An employee reimbursement expense can require separate evaluations for CIT deductibility and for input value-added tax (VAT) credit. The first concerns whether a cost may reduce taxable corporate income; the second concerns whether input VAT may be credited under the VAT framework.

The employee reimbursement documentation under Circular 20 is a CIT-specific issue. It does not independently prove that the invoice and payment arrangement meet every condition for an input VAT credit.

For VAT, businesses should separately review the applicable VAT Law and implementing rules, including the invoice identity, transaction type and any authorized-purchase provisions. A finance team should not claim an input VAT credit solely because the expense claim has been approved for CIT purposes.

This separation is especially important for foreign-invested companies whose procurement and finance teams use different systems for expense approval, VAT returns and CIT reporting.

7. Five Mistakes That Put Employee Reimbursement at Risk

First, an employee makes a significant company purchase without any documented authorization. The invoice may be genuine, but the company cannot easily demonstrate that the transaction was undertaken on its behalf.

Second, the employee pays the supplier in cash for a transaction requiring non-cash evidence. Subsequent reimbursement through the bank does not recreate the missing first payment record.

Third, the employer reimburses the employee in cash, despite having evidence that the employee used a non-cash method with the supplier. For the specified authorized-purchase case, both steps matter.

Fourth, accounting records identify the expense only as “staff reimbursement” without the supporting invoice, supplier details and commercial purpose. This makes later reconciliation and tax review more difficult.

Finally, the company assumes that CIT deductibility automatically establishes input VAT credit eligibility. These are related but separate legal assessments.

Good employee reimbursement controls address the entire purchasing workflow, not just the final reimbursement entry.

8. Frequently Asked Questions

Can employee reimbursement over VND 5 million be deductible in 2026?

Potentially, yes. An authorized business purchase must meet the CIT expense conditions, including the relevant documents and non-cash evidence required under Point b, Clause 13, Article 3 of Circular 20/2026/TT-BTC.

Is a personal bank card acceptable for the original purchase?

The regulation covers purchases made by an authorized employee using a qualifying non-cash payment service. The payment must be documented, and the business must also retain the required authorization and non-cash reimbursement records.

Can the employer reimburse the employee in cash?

For the specific authorized employee-purchase situation covered by Point b, Clause 13, Article 3, evidence of the employer’s non-cash reimbursement is expressly required.

Is a VND 5 million transaction automatically deductible if paid by bank transfer?

No. The purchase must still have an appropriate business purpose and supporting documents, and it must not fall into a non-deductible expense category.

Does the same document package automatically permit input VAT credit?

No. VAT credit conditions require an independent assessment under the applicable VAT legislation.

9. How PHAM CONSULT Can Help

Employee reimbursement is usually a small operational process, but repeated weaknesses can lead to inconsistencies between expense reports, supplier invoices, bank records and tax filings.

PHAM & ASSOCIATES CONSULTING COMPANY LIMITED (PHAM CONSULT) provides tax consulting and accounting support to businesses operating in Vietnam, including foreign-invested enterprises. Depending on the engagement, its services include reviewing accounting documents, assessing tax risks and advising on financial procedures.

Learn more about PHAM CONSULT’s Tax Consulting Services and Accounting Services. For assistance reviewing your company’s employee reimbursement policy or expense documentation, contact PHAM CONSULT.

PHAM CONSULT
Website: https://phamconsult.com/
Email: info@phamconsult.com
Ho Chi Minh City Office: +84 28 3930 2487

Disclaimer: This article provides general information as of October 30, 2026. Tax deductibility and VAT treatment depend on the actual transaction, supporting records, relevant exceptions and legislation in force. It does not replace case-specific professional advice.