1. The issue: which expert allowances are taxed, and which are not?
A foreign expert’s package usually includes several fixed allowances: business-trip, telephone, fuel, uniform and mid-shift meals. The common mistake is to treat every “allowance” alike — while tax law draws a clear line: work-related fixed allowances paid under the company’s internal rules are excluded from taxable income; amounts that are salary in nature or serve personal needs are fully taxable.
2. Legal basis
- Law 109/2025/QH15 and Decree 253/2026/ND-CP — the scope of employment income and work-rule-based payments that are not salary in nature.
- Tax administration practice guidance (Official Letter 2231/CST-TN and consistent rulings) — treatment of fixed allowances for travel, telephone, office supplies, uniforms and mid-shift meals.
3. Business-trip and telephone allowances: excluded if properly fixed by internal rules
Fixed allowances for business trips (travel, lodging while on assignment) and for work telephones are excluded from taxable income if the company fixes them under its financial/internal spending rules and they match the nature of the job. What decides is not the label but: a written rule, a reasonable fixed level, and a link to assigned duties. Without internal rules, the allowance risks being assessed as the individual’s taxable income.
4. Fuel and commuting: separate collective transport from personal cash
Collective shuttle transport from home to the workplace is not taxable income of the individual. By contrast, cash fuel money paid directly to an individual for personal commuting is salary in nature and taxable; a fuel allowance for staff who travel constantly for work, with clear rules and norms, is treated as a work allowance. Separate the two groups in the company rules instead of merging them into one “transport allowance” line.
5. Mid-shift meals and uniforms: two familiar caps
Mid-shift meals: meals organized by the employer are not taxed; where paid in cash, the excluded part is capped at VND 1.2 million per person per month under the current guidance framework — the excess is taxable. Uniforms: provided in kind, not taxed; provided in cash, the excluded amount is capped at VND 5 million per person per year, with the excess taxed.
6. Key takeaways
The internal spending rulebook is the tax shield for every fixed allowance. The same amount of money is non-taxable work cost with rules, norms and proper documents — and personal taxable income without them. Employers of foreign experts should re-check their allowance rules whenever the package changes.
7. Frequently asked questions
1. The company fixes a telephone allowance of VND 2 million/month for an expert — is it taxed?
No, if the work-telephone allowance is set out in the company’s financial/internal spending rules with a specific fixed level. Paid in cash with no rule basis, it may be treated as taxable income.
2. A fixed monthly fuel allowance for an expert who drives himself to work?
That serves personal commuting (home to workplace) needs, so it is salary in nature and enters taxable income. Only employer-organized collective transport is excluded.
3. A cash meal allowance of VND 1.5 million/month — how is it taxed?
The part within the cap of VND 1.2 million/person/month is excluded from taxable income; the VND 300,000 excess is taxed in that month.
4. Trip allowances are fixed per travel day and the expert spends less — must the surplus be returned?
For tax purposes, a rule-compliant fixed trip allowance is excluded regardless of actual spending. Internal settlement of any surplus is the company’s governance matter under its own rules and does not change the tax treatment.
This article has been quality-reviewed by the FLAW AI Legal Council
