For Tenant - How to update utilities Bills if Landlord is Individual (Self-Billed)

Overview: 

If your landlord is an individual and the utility bills (e.g. TNB, water) are under their name, but your company (as the tenant) pays the bills directly to the utility provider, you are required to issue a self-billed e-Invoice when claiming these expenses, according to LHDN’s e-Invoice guidelines.

 Scenario: 

• You rent an office from Mr. Lee, an individual landlord.
• The tenancy agreement states you must pay for utilities.
• The TNB and water bills are under Mr. Lee’s name
• Every month, your company pays TNB and the water supplier directly.
  
   

Solution:

1. Since the landlord is individual, this is under Self-Billed Type category "Individual taxpayer providing goods or services"
 

2. In Payment Voucher, select the rental account - Note that the Classification is 036 (Self-Billed Others)

4. Create another row and select the TNB Contra account, update the TNB amount. 
 Note that the Classification is 006 (Disbursement) 

 For ‘Contra–TNB’ account setup details, see the Remark section below
For How to create e-Invoice in Payment Voucher can click here 

    5. Create a Journal Entry for to debit actual electricity expenses account; credit the contra account 

Practical Recommendations:

• Clearly define in the tenancy agreement the responsibility for rental and electricity charges.
• Retain copies of electricity bills and payment proof for audit or verification purposes.
• If the landlord actually collects and pays the electricity charges on behalf of the tenant, the amount can still be classified as a Disbursement, but the payment flow must be clearly documented.

Remark: - How to create Contra Account 

  A - Create contra account in Chart of Account under Expenses
 

B - Stocks > Account Preset > Create CONTRA -TNB code, the Sales & Purchase Account select as the expenses account created just now 

C – Stock Items, create the Stock code for ‘CONTRA-TNB’

• Unticked Stock Control
• Preset Code select as ‘CONTRA-TNB’
• Classification (Sales) select as 006  

Refer attachment for PDF File