Ever since the Ministry of Finance issued an official opinion (the “Opinion”) that the reimbursement of commuting costs should be documented with a credible document to be eligible for tax exemption, a number of questions have been raised regarding its application.
One of the essential questions is what exactly is a credible accounting document that proves employee’s commuting expenses.
In the opinion, the Ministry reemphasized that the method of documenting commuting expenses shall be regulated by a general act of the employer.
Further, the Ministry confirmed that the following are examples of documents that can be accepted as credible accounting documents:
(a) If an employer obtains a credible accounting document:
- If the employee uses his/her own vehicle while using the company’s vouchers / coupons / cards for the purchase of fuel at gas stations with whom the employer has signed a contract – A credible document is a consolidated receipt on behalf of the employer, which specifies all individual amounts of fuel purchased by the employees within one month, with a list of employees using their own vehicle for commuting;
- If the employee uses public transport by purchasing daily/monthly prepaid tickets by the employer – A credible document is a consolidated receipt on behalf of the employer, specifying all individual purchased daily/monthly prepaid tickets, along with a list of employees using public transport for commuting;
- If the employee uses taxi transport while using the company’s vouchers / coupons / cards for transport by taxi companies with whom the employer has signed a contract – A credible document is a consolidated receipt on behalf of the employer, which would specify all individual amounts of taxi rides used by the employees within one month, with a list of employees using taxi transportation for commuting.
(b) If the employee obtains a credible accounting document:
- If the employee uses his or her own vehicle – A credible accounting document is a fuel receipt, with the employee’s statement that the receipt relates to the fuel that he/she has bought for the purpose of commuting;
- If the employee uses public transport – A credible accounting document is a receipt for a monthly/daily prepaid ticket, with the employee’s statement that the receipt relates to a ticket that he/she has bought for the purpose of commuting;
- If the employee uses taxi transport – A credible accounting document is a taxi receipt, with the employee’s statement that the receipt relates to a taxi transport that he/she paid for the purpose of commuting.