Office Rental Price: Pay Into Account
Surely many businesses wonder what account the office rent is recorded into. And how to calculate the office rental price, warehouses, and factories? To be able to properly account for the law, avoid fines from tax authorities.
Is the office rental price included in the cost of business administration?
Before answering the question of which account is the office rent recorded, first of all, we need to know what is the administrative cost of the business.
These costs are the general service costs for the operational problems of the business. This cost will be used to pay all kinds of expenses such as salary, and insurance of all kinds for employees. In addition, it is also used to pay for the money to serve the investment and operation of infrastructure such as headquarters, offices, and services in the office such as water, telephone, etc.
Businesses that have a private lease on land and infrastructure, need to pay an office rental fee. This is an amount approved by the management and included in the management and business expenses of the enterprise. As well as being specifically accounted for to report to the tax department in the locality where the business operates.
Which account should the office rent be recorded to ensure validity?
When a business wants to rent an office or building from an individual or a company, it must comply with the law on which accounts should be recorded in the management expenses and office rent. also need to know.
However, to which account the office rent is recorded or how to properly account for the cost of office rental, the accounting department needs to comply and follow the instructions exactly.
Specific information and documents that need to be noted for valid accounting include: invoices of all kinds, payment documents, lease contracts for offices, buildings, etc. a certain person or company; rental contracts, payment documents, etc. for businesses renting from individuals.
In case there is additional information that the lessee will pay tax on behalf of the landlord, the dossier needs to have additional tax payment documents with the tax authorities. In particular, in this case, since the tax party will not issue a retail invoice, there will be no invoice.
In case the office rent is worth 20 million VND or more
For the case of office rental costs of 20 million or more, there are a number of issues businesses should note as follows:
If the office rent between the enterprise and the company is 20 million or more, there is a value-added invoice, and the lessee is forced to transfer to the office lessor’s account by his account and must have a certificate provided by the bank.
If the office rent between businesses and individuals is 20 million or more, i.e. no value-added tax (VAT), a transfer is not required, but a receipt of rent receipt along with Confirmation signature from the owner.
Cases of accounting for office rental price
In case of prepayment of expenses
In order to know which account the office rent is recorded into, first of all, we need to know the cases of accounting for office rental expenses. The first is the case of prepayment of expenses.
For this case, if the enterprise has fully paid the office rental cost in advance, based on invoices, payment documents, and lease contracts to determine. Then, the accountant will record as follows: Dr 331; There are 111,112.
In the case of the monthly payment
The next case we need to know to understand which account the office rent is recorded in the case of monthly payment of expenses.
For businesses that apply the monthly payment method, or businesses that receive invoices requesting to pay monthly office rent. At that time, the enterprise’s accountants need to account as follows: Debit 154, 627, 641, 642.
The accountant of the business needs to clearly determine what this lease is for, for what purpose, and for which part of the business, should know which account the office rent is recorded into. From there, accountants can include specific expenses: Accounts 111,112, and 331.
In the case of office rental price, postpaid expenses
For businesses that apply for office rental, postpaid costs. Accountants will need to account for the following:
Monthly accounting: Dr 154, 627, 641, 642 (accounting can be based on the rental purpose and for which department to include in specific expenses); Account 335 (in this case, the account incurs expenses but in reality, the enterprise has not paid)
For payment or receipt of invoices by the enterprise: Dr 335; Account 111,112 (in case of payment). Or Account 331 (in case of receipt of invoice).
In case of office rental expenses paid in advance for many periods
The last case that must be mentioned so that we can understand the information that the office rent is recorded in a certain account is the case of office rental expenses paid in advance for many periods.
For example, company X leases Mogi’s house for a period of 6 months and pays the full amount in January, the accounting is as follows: Debit to Account 242: total amount; Dr 113: (in case there is a value-added invoice); Account: 331, 111, 112.
Prepaid expenses are allocated periodically. Depending on the purpose of use will be put into different accounts. The specific accounting method is as follows: Debit account 154, 627, 641, 642,…; Account 242.
You can read the previous article here: Quality Infrastructure: Routine Maintenance
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Q: What are the legal requirements for lease contracts in Vietnam?
Vietnam has specific legal requirements for lease contracts, such as registration with the local authority and the inclusion of certain clauses, including those related to rent adjustment, termination, and dispute resolution.
Q: What are the different types of lease contracts available in Vietnam?
There are several types of lease contracts available in Vietnam, including commercial office leasing, co-working space lease contracts, and business center lease contracts.
Q: What is an office lease contract?
An office lease contract is a legally binding agreement between a landlord and a tenant, which sets out the terms and conditions for renting office space.