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- Philippines
What is the expense reimbursement policy in the Philippines?
Modified on: Wed, 20 Aug, 2025 at 5:23 PM
TABLE OF CONTENTS
This article outlines the policies and procedures for travel, mileage, invoicing, and reimbursement of business expenses for employees based in the Philippines.
Invoicing and Documentation
What documentation is needed for business expenses to be reimbursed tax-free?
- Receipts should be named under the company:
New Horizons Global Partners Philippines Inc.
TIN: 604-227-760-000
For goods, a Sales Invoice is required; for services, a Service Invoice.
Are invoices always necessary, and does Horizons need to be listed on them?
Yes, invoices are generally required and should list New Horizons Global Partners Philippines Inc.. Exceptions may apply for small transport expenses (e.g., jeepney or tricycle rides) where receipts are not issued.
Is there a threshold under which invoices are not required?
There is no formal threshold, but avoid using services that do not issue receipts unless the amount is minimal.
Reimbursement and Taxability
What are examples of business expenses that can be reimbursed tax-free with proper documentation?
Any expense supported by a proper receipt (Sales or Service Invoice) and named under the company is not taxable to the employee. These are treated as deductions from company income.
Are per diems taxable? What are the national and international per diem rates for 2025?
There is no fixed per diem table, but you may refer to RR 2-98 for guidance.
What are the taxable rules under client entertainment or gifts?
There’s no specific rule, but Meals and Entertainment combined with Miscellaneous/General Admin Expenses should not exceed 1% of the company’s total income for the year.
Are there any health or wellness-related expenses employees can claim?
Yes, Medical Assistance is allowed as a De Minimis benefit, up to ₱10,000 per annum. Refer to RMC 107-2024 for details.
Is VAT applicable on reimbursable expenses in your country?
Yes. If the receipt is local, properly documented, and named under the company, the VAT is claimable as input VAT.
Are there any other important compliance considerations for expense processing?
To support VAT claims, it’s helpful to summarize invoice details in a shared document (e.g., Google Sheet) with the following fields:
- Date
- Supplier Name
- TIN
- Gross Purchase Amount
- VAT Amount
- Invoice/Reference No.
- Shortened Address
Travel and Mileage
What is the mileage reimbursement amount per km?
In the Philippines, mileage is not reimbursed per kilometer. Instead, employees must submit actual receipts or proof of payment for transportation. This is because per-kilometer charges vary depending on the type of vehicle used.
How are parking tickets and tolls reported?
Parking tickets and tolls should be reported as separate transportation expenses with corresponding receipts. These are categorized under Transportation and Travelling Expenses for bookkeeping purposes.
Are there any restrictions or caps on business travel?
There are no specific restrictions or caps, as long as the travel is reasonable and necessary for the employee to perform their duties.
Are there travel-specific rules for air, bus, train, tram, taxis/cabs, or rental cars?
There are no strict rules, but it is encouraged to use transport services that issue receipts. This helps ensure proper documentation for reimbursement.
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