Enterprises can rent assets of individuals to use for production and business activities and should note that there are sufficient records to include in deductible expenses when determining CIT.
Legal grounds:
- Circular No. 78/2014/TT-BTC;
- Circular No. 96/2015/TT-BTC.
Enterprises have the right to rent assets of individuals to use in production and business such as houses, offices, factories, land, cars, etc.
When dealing with individuals, businesses need to pay attention to prepare all necessary papers and documents so that property rentals are included in deductible expenses when determining CIT.
Specifically, based on Clause 2, Article 6 Circular No. 78/2014/TT-BTC, as amended and supplemented by Circular No. 96/2015/TT-BTC:
As a general rule, records to determine deductible expenses are:
- Property lease agreement and
- Proof of rental payment.
If the property lease contract contains an agreement that the enterprise shall pay tax on behalf of the individual, the dossier to determine the deductible expenses must include:
- Proof of tax payment on behalf of the individual.
If the property lease contract has an agreement that the rent does not include tax (VAT, PIT) and the enterprise pays tax on behalf of the individual, then:
- Enterprises are included in the deductible expenses of the total rent including the tax paid on behalf of the individual.
