Q:
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Are expenses such as fuel, tolls, repairs, etc., incurred by private cars for public use deductible before corporate income tax after they are expensed?
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A:
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Enterprises at fair value and the vehicle owner signed a lease contract, a clear agreement on the occurrence of the relevant costs of ownership, through the lease relationship, in the case of rental invoices, the occurrence of operating income related to fuel, tolls, repair costs and other expenses, can be deducted before corporate income tax on the basis of valid legal documents.
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Q:
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What are the forms of lease contracts that businesses enter into with vehicle owners?
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A:
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Renting with a person is equivalent to a business buying a transport service (without discussing the industry's operational requirements), and the operational risk is essentially on the lessor.
In the case of a rental vehicle only, it is a lease of tangible movable property and the lessee shall bear the risk of operation
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Q:
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What relevant documents are required by the lessee to take a pre-tax deduction for this matter?
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A:
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The basis of tax deduction is not only based on the lease relationship and rental invoice, but also on the original documents such as specific items and purposes.
For example, if the rental car is used for business travel, it is necessary to have the business trip approval, payment voucher, indicating the name of the traveler, location, time, task, etc.
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Q:
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Are the input invoices received for refueling a shareholder's personal car used for company business deductible?
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A:
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Fuel invoices obtained for the use of a private vehicle under a lease agreement are deductible; however, where there is no lease agreement, the fuel invoices obtained should be included in the individual's payroll.
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Q:
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What are the issues to be aware of in the private car segment?
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A:
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In practice, the link between private cars and public use needs to be strictly defined, if the division of costs is unclear, i.e. the line between private cars and public use is unclear, the corresponding costs incurred will not be allowed to be charged before tax.
The transportation allowance for employees commuting to and from work shall not be disguised as treatment of the private car common rental expense charge, which would evade the personal income tax issues involved.
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