Electricity and water are services that most businesses have to use during their business, but if there are not enough documents, these cost may not be accepted.
Legal grounds:
- Circular No. 78/2014/TT-BTC;
- Circular No. 96/2015/TT-BTC.
When an enterprise rents a house from an individual to use it as a place of doing business in Vietnam, it shall include the rent as a deductible expense when determining CIT.
During the rental process, the business can use electricity and water services registered by the landlord at the house. However, it is necessary to prepare all necessary documents so that electricity and water costs are deductible when determining CIT.
Pursuant to Clause 2, Article 6 of Circular No. 78/2014/TT-BTC, as amended and supplemented by Article 4 of Circular No. 96/2015/TT-BTC, as follows:
2.15. Payment of electricity and water bills for electricity and water contracts signed by the owner being a household or individual leasing a production or business location directly with the electricity and water supply unit without sufficient documents in one of the following cases:
- In case an enterprise rents a place for production and business to directly pay electricity and water bills to electricity and water suppliers, there are no electricity and water bills and the lease contract for the production and business location.
- In case the enterprise leasing the production and business location pays electricity and water bills to the owner of the production and business location without proof of electricity and water payment to the lessor of the production and business location in accordance with the actual amount of electricity and water consumed and the lease contract for the production and business location.
According to the above regulations, electricity and water costs incurred at the rented house as a business location will not be accepted if:
- Enterprises pay directly to electricity and water supply units but do not have electricity and water bills and house rental contracts;
- The enterprise pays the landlord but does not have a payment document in accordance with the actual amount of electricity and water consumed and the house rental contract.
