In the daily accounting processing, I believe that the financial personnel of many enterprises have encountered the problem of invoices for the purchase of bottled water. Although the amount of this expenditure is small, it is worth paying attention to how to correctly classify it into the corresponding accounting accounts for accounting, and whether it can be properly deducted from the input tax of obtaining special invoices. So, will the difference in accounting accounts have a greater impact on the tax revenue of enterprises?
Subject analysis
Typically, businesses buy bottled water to meet the daily needs of their employees. Since this relates to employee benefits, some finance personnel may include it in the "Employee Benefits Expense" account. However, according to the relevant tax laws, if the welfare expenses incurred by the enterprise in the current year exceed 14% of the total wages and salaries, the excess part is not allowed to be deducted before tax. If the cost of bottled water is included in the employee welfare expenses, this limit may be involved in the final income tax settlement at the end of the year. Therefore, it is more reasonable to include the cost of buying bottled water in the "Office Expenses" account under "Administrative Expenses", so that its amount can be deducted in full before tax. In addition, according to the relevant tax laws, the bottled water used by the enterprise for office use is not regarded as employee welfare expenses, so if a special VAT invoice is obtained that meets the requirements, the input tax can be deducted normally. However, it should be noted that if the purchased bottled water is used for collective welfare, such as a canteen operated externally, then it belongs to the category of welfare expenses and cannot be deducted from the input tax.
Actual processing
When a business receives a general invoice, for the purchase of bottled water:
Debit: Administrative Expenses - Office Expenses.
Credit: Cash in hand Bank Deposits - xx bank.
2.When a business receives a special invoice for the purchase of bottled water:
Debit: Administrative Expenses - Office Expenses.
Tax Payable - VAT payable (input tax).
Credit: Cash in hand Bank Deposits - xx bank.