Office Chair IOU Accounting

Whether an IOU for office chairs can be recorded in accounts and deducted before tax depends on the situation.

Small-scale and Sporadic Business Operations

If the purchase of office chairs falls under small-scale and sporadic business operations, and the counterparty is an individual engaged in such small-scale and sporadic business activities, then under certain conditions, an IOU can be recorded in accounts and allowed for pre-tax deduction. Specifically, receipt vouchers and internal vouchers are used as evidence for pre-tax deduction. The receipt voucher should include details such as the name of the receiving unit, the individual's name and ID number, the nature of the expenditure (in this case, the purchase of office chairs), and the amount received. Additionally, the sales amount from the individual's taxable business operations must not exceed the threshold set by relevant VAT policies. For individuals paying taxes on a per-occasion basis, the VAT threshold is a daily sales amount ranging from 300 to 500 yuan (inclusive). For example, if a company purchases an office chair worth 300 yuan from an individual engaged in small-scale and sporadic business operations and obtains a compliant receipt voucher, the IOU can be recorded in accounts and deducted before tax under these circumstances.

Inability to Obtain Invoices Due to Special Circumstances

When it is impossible to obtain an invoice for the purchase of office chairs due to special circumstances, such as the counterparty being deregistered, revoked, having its business license legally revoked, or being identified as a non-normal household by tax authorities, an IOU can also be recorded in accounts and allowed for pre-tax deduction upon presentation of relevant documents proving the authenticity of the expenditure. These documents include proof of the reasons for being unable to reissue or replace the invoice or other external vouchers, such as documents proving the counterparty's deregistration; contracts or agreements related to the business activities, i.e., the contract for purchasing office chairs; and payment vouchers for non-cash transactions, such as bank transfer records. Only by providing these complete and authentic documents can the authenticity of the expenditure on purchasing office chairs be proven, thereby allowing the IOU to be recorded in accounts and deducted before tax.

However, it is important to note that if neither of the above two situations is met, the recording of an IOU for office chairs in accounts is generally not allowed for pre-tax deduction. Companies should strive to obtain legal and valid invoices as evidence for pre-tax deduction.