Among the taxes paid to the state budget, value added tax occupies a special position. What is VAT, speaking in simple words?
The state pays serious attention to reporting and collection of value added tax. The total amount of revenue from this type of tax alone is about a quarter of the annual budget of the Russian Federation, since taxpayers are large enterprises and organizations, as well as some representatives of small businesses operating under the main taxation system. So that you, as an entrepreneur, do not have problems with the Tax Inspectorate, you should have an idea: what VAT is, how to calculate the amount of tax on your products, goods or services.
Essentially, VAT is part of the cost of goods or services provided, withdrawn to the state budget. This deduction is included in the sales price for the final buyer or user of the service. Thus, by paying for goods or certain amenities of life, buyers (they can be legal entities, entrepreneurs or just ordinary consumers) replenish the state treasury. But the seller is responsible for the correctness of tax calculations and deductions to the budget.
In an accessible and interesting way, what value added tax (VAT) is is explained in simple words in the video.
The responsibilities of VAT payers include:
- quarterly reporting - filing a declaration with the tax office,
- quarterly payment of the calculated amount of tax to the budget according to the submitted declaration.
When calculating the amount payable, the taxpayer has the right to reduce the amount of tax calculated from the sale of his own products or services by the amount of tax paid by him in turn in the cost of materials, goods, equipment, tools purchased for the production process from his suppliers.
You can only exercise this right if you have a correctly completed invoice from the supplier.
Certain commodity-money transactions take place without taxation.
In accordance with the Tax Code of the Russian Federation, these include religious paraphernalia, products manufactured public organizations disabled people, handicrafts, housing, sale of ore containing precious metals.
In addition, legal entities operating under special tax regimes: simplified taxation system, single tax on imputed income, single agricultural tax are not VAT payers.
Tax is not included in the cost of manufactured products and services sold by such entrepreneurs. Due to this, they cannot deduct input VAT based on invoices from their suppliers.
They are also exempt from VAT reporting.
Taxation rules for this type of tax differ significantly for entities operating within the state and those associated with the import of goods. This applies to both the rate and the reporting procedure.
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Existing VAT rates
Currently the Tax Code Russian Federation determines the deduction of this type of tax at three interest rates: 0, 10 and 18 percent.
IN European countries rates are higher, about 25%.
In our country, since 1992, with the introduction of VAT, the tax rate was reduced from 28% to 20%, then from January 1, 2004 it was set at 18 percent and is still in effect.
It should be understood that the zero interest rate assigned to individual species goods and exemption from paying this tax are different things, since exemption allows you not to report to the tax office. A complete list of entities that do not pay VAT is provided by the Tax Code, Art. 149.
How to calculate VAT (18%) on the sales amount
In manufacturing activities, it is often necessary to separate out VAT from the total purchase price. For example, when manufacturing your own products you have to buy certain materials at a cost that already includes VAT. In this case, the subject is both a buyer and a seller, to whom it is necessary to transfer tax on the cost of the final product.
The calculation formula itself is simple.
Based on the fact that the price of a product (C) consists of the cost (A) and
tax amount (B), we get C = A + B.
The tax amount with a known value is calculated even easier.
The cost (A) is multiplied by the interest rate (K) and divided by 100:
B = AxK/100.
For example, the declared cost of a product is 700 rubles, the rate is 18%,
then B = 700×18/100, and VAT will be 126 rubles.
Sometimes it is necessary to allocate the amount of VAT based on the total cost of a product or service.
So, with a selling price of 300 rubles. and a rate of 18%
B = 300/(100+18)x18,
and the manufacturer will have to pay 45.76 rubles to the budget.
For those who do not want to fool themselves with calculations, special online calculators. They are also convenient because large quantities operations, for each of which calculations are made separately, a person gets tired of mechanical work and may unwittingly make a mistake.
Value added tax reporting
When filling out a quarterly report, that is, when determining the amount of VAT that an enterprise must transfer to the budget, you need to determine the following values:
- accrued VAT amount (calculated for each transaction);
- the amount of deduction (the so-called input VAT);
- amount of tax to be refunded.
Tax base for VAT- what is it?
These are all funds received by the enterprise, all flows associated with received payment for goods, services or work sold. When the contract specifies amounts in foreign currency, it is necessary to convert them into domestic currency (ruble) at the Bank of Russia exchange rate in effect on the date of sale (shipment).
Tax deduction for VAT- what is it?
This is the amount of tax paid by a business to its suppliers on the total cost of goods and services purchased. A tax deduction allows you to reduce the amount of tax payable determined in the declaration.
A tax deduction may also apply to the purchase of fixed assets (equipment), but only after it is taken into account in this capacity, there is an invoice for this equipment and evidence that this equipment will be used in the production of those goods that are subject to VAT.
The tax under consideration is the most costly for the manufacturer, both in percentage and total terms. Therefore, it is important to take into account all the little things. For example, purchasing goods without confirmation by an invoice does not give the right to deduct VAT.
Amount of VAT to be refunded- what is it?
If, based on the results of calculations for the quarter, the amount of tax deduction turns out to be greater than the amount of calculated VAT, which indicates an actual overpayment of tax, the enterprise has the right to reimburse this difference from the budget. To do this, a declaration is submitted, the tax office conducts a thorough check of calculations, the availability and correctness of all documents (contracts, invoices, payment documents, etc.) and makes a decision on VAT refund or refusal.
Is it possible not to pay VAT?
Payment of this tax is the responsibility of legal entities - residents of the Russian Federation, including companies engaged in foreign trade activities.
Entrepreneurs and enterprises, according to tax legislation, have the right to take advantage of the opportunity to be exempt from paying value added tax when the result of their economic activities (revenue) for the previous quarter amounted to less than two million rubles.
In this case, before the 20th day of the month in which exemption is desired, you must submit a corresponding application to the tax authorities and attach a package of supporting documents to it. The grace period usually lasts 12 months and is not automatically extended.
If necessary (for an enterprise), applying to the tax office follows the same procedure as the first time. If throughout grace period if in at least one month the sales amount exceeded that which entitles the person to the benefit, the taxpayer is obliged to remit VAT to the state.
Import-export operations and turnover of excisable goods are not subject to even temporary exemption from VAT. The transfer occurs for each operation.
Calculations must be approached carefully. Mistakes are punishable by fines. Underpaid taxes can result in large financial losses.
But the amount overpaid by mistake is unlikely to be returned or credited to the taxpayer in the next reporting period. The state guards its interests. Taxes, including VAT, fill the budget. Tax rates change from time to time under the influence of many factors, but taxes themselves ensure the independence of the state and the well-being of the population, being a financial base.
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This tax is paid by all legal entities and individual entrepreneurs who apply the basic tax system.
The essence of the tax
The tax payer is the final consumer of the purchased product or service received.
It is he who pays this tax to the seller, since the latter is included in the price of the goods. And the seller, in turn, pays this tax to the state.
Story
In Russia, such a tax as VAT appeared in 1992. It was put into effect.
This law lost its force in 2000, when this tax “passed over” to Chapter 21 of the Tax Code of the Russian Federation. The introduction of this tax came to Russia from abroad, and more specifically, from the USA.
Today, the practice of applying VAT in all countries is the same, only the rates and benefits differ.
The VAT rate in Russia has changed several times:
This tax first appeared in France in 1942. It was formed from a sales tax, which did not take root in France, as it had many shortcomings.
In 1948, a French economist came up with a system for paying and refunding taxes - the prototype of today's VAT. In this form, the tax has taken root not only in France, but throughout the world.
As already mentioned, Russia adopted the experience of using VAT from the United States. It is in the form in which the VAT is now used that it was “modified” by American economists.
Since 1990, Russia has had a sales tax, which did not bring the desired effect. In 1992, when the country's economy was on the verge of collapse, it was necessary to rebuild the tax system.
Then the proposal to introduce VAT arose. This was done by the government of Yegor Gaidar, who developed the above-mentioned law.
Definition
Value added tax is an indirect tax that is payable to the budget at the time of sale of goods, or provision of services, or performance of work.
It is formed at all stages of production, and represents a payment for the formation of the final cost of a product, work or service.
Elements of taxation
Like any other tax, VAT has its own elements. This:
- subjects, that is, taxpayers. This tax is paid by legal entities and individual entrepreneurs applying the main tax regime. Special regimes also pay VAT in some cases. Subjects for this tax are listed in;
- objects of taxation. Based on . The objects of this tax are:
- Sale of goods and property rights, as well as performance of work and provision of services, confirmed.
- Import of goods into the territory of our country.
- Transfer on the territory of our country of goods that are needed for the taxpayer’s own needs, and the maintenance costs of which are not taken into account when taxing profits.
- Construction and installation work for own consumption.
- the place of implementation may or may not be the territory of our country. To determine it, you must be guided by the provisions and;
- The tax base is the basis from which the tax is calculated. It is determined in accordance with;
- tax period – for VAT this is a month;
- tax rates - they can be equal to 18%, 10% and 0% of the tax base;
- procedure for calculating VAT tax;
- tax deductions;
- tax payment and reporting;
- its compensation by .
VAT for dummies
In simple terms, VAT is a payment to the state for allowing entrepreneurs and legal entities sell goods, works or services, while “increasing” your price on them.
This is an indirect tax, that is, it is paid by the seller of the product, work or service, but it is levied by the final buyer of the product.
Example: when buying bread from IP Ivanov, the buyer pays the cost of the loaf in the amount of 36 rubles, of which VAT = 5.5 rubles. At the same time, the buyer paid it by purchasing a loaf of bread, and individual entrepreneur Ivanov will pay the tax to the budget.
Every taxpayer must register "incoming" and "outgoing" invoices using .
It is in these documents that the amount of tax is reflected. The difference between the “input” and “output” taxes is subject to payment to the budget.
Beginning entrepreneurs and accountants do not know which taxes VAT applies to - federal or regional? And what budget should it be paid for? VAT is a federal tax and must be paid to the federal budget.
Tax characteristics
The characteristics of VAT are:
- taxpayers – who pays this tax. This element is described in detail in Article 143 of the Tax Code of the Russian Federation. According to this article, tax is paid by organizations and individual entrepreneurs that apply common system taxation;
- the object of taxation is what is subject to this tax. These objects are listed in Article 146 of the Tax Code of the Russian Federation. These include proceeds from the sale of works, goods or services, as well as property rights on the territory of our country, as well as proceeds from the sale of imported goods;
- interest rate. There are 3 VAT rates in Russia – 18%, 10% and 0%. Interest rates are shown in ;
- place of sale is the place where goods, services and work are sold, and where tax should be paid;
- The tax base is the basis for calculating tax. In simple terms, this is sales revenue. How to correctly calculate the tax base is specified in Article 153 of the Tax Code of the Russian Federation. The formula for calculating VAT is as follows:
- tax period is the period for which VAT must be calculated and paid. According to , tax period for VAT is a month. That is, the amount of tax that the taxpayer calculated for the quarter is subject to payment to the budget;
- tax deductions. Every taxpayer has the right to apply tax deductions. You can deduct from the amount of VAT calculated for the quarter the amount of tax that was generated when purchasing goods, providing services or performing work by third-party organizations. Such VAT can be deducted if the counterparty also uses OSN and has issued an invoice with the specified amount. It is worth remembering that only the presence of an invoice gives the right to apply a deduction according to.
- tax payment procedure and deadlines. Tax reporting must be done by the 25th of the next month following the quarter. That is:
You must report using . Tax must be paid by the 20th day of each subsequent month following the reporting quarter.
Tax period
As already mentioned, the tax period for VAT is a month. This is stated in Article 163 of the Tax Code of the Russian Federation.
For taxpayers whose sales revenue for the previous quarter, excluding VAT, amounted to less than 2 million rubles, then for such organizations and individual entrepreneurs the tax period will be a quarter.
However, for all organizations billing period is a quarter. The tax amount due must be calculated every month. And pay based on the results of the quarter.
Scheme: calculation of the amount of VAT payable to the budget
The tax is paid every month, during the quarter following the billing quarter, in equal installments. For example, the amount of tax calculated for the 2nd quarter is 210 thousand rubles.
Consequently, the taxpayer must pay 70 thousand rubles by the 20th of each next month - 70 thousand by July 20, 70 thousand by August 20 and 71 thousand by September 20.
If the amount of tax to be paid is not divided into equal parts, then the first 2 times you need to pay the tax, rounding it up to zero, and the third time - rounding it down.
For example, the amount of tax payable for the 2nd quarter is 167 thousand rubles. In this case, the taxpayer must pay 55,667 thousand rubles each by July 20 and August 20, and 55,666 rubles by September 20.
They say that it will not be a violation of tax legislation to pay VAT in the entire amount for the quarter, that is, the taxpayer will not “split” the amount of tax payable, but will pay it all at once in a one-time payment.
What is it for?
Why is VAT needed? Why did he change the sales tax in “his post” in 1992? Indirect taxes actively play a leading role in the formation of the federal budget.
And VAT is no exception. This tax consists of most revenue part of our country's budget. VAT alone accounts for 40% of budget revenue.
From year to year, VAT revenues are only increasing. This suggests that many large taxpayers have appeared in Russia who do not have the tax right to apply preferential regimes.
As VAT revenues increase, the number of evaders does not decrease. Over the past 5 years, their number has decreased by only 2% - this is a “drop in the ocean” compared to their total number.
The annual damage from the activities of such companies and individual entrepreneurs annually amounts to 30 billion rubles.
Is it profitable to work with VAT?
When opening your own business, you should think about choosing a tax system - the main regime or one of the preferential ones. Of course, there are types of activities for which preferential treatment cannot be applied.
But, for the most part, aspiring entrepreneurs wonder – what are the benefits of working on VAT and is it worth using this regime?
Of course, the point is to reimburse the tax; by working with the same partners, the taxpayer “compensates” for the tax.
Video: VAT from 2015 - shocking news for accountants and businessmen
It is worth recalling that the difference between the “issued” and “received” invoices is subject to payment. In practice, this is not such a large amount.
That is why enterprises using SST do not want to work with beneficiaries. The latter do not pay VAT and, therefore, cannot reimburse it.
Work without value added tax
However, there are more and more VAT beneficiaries every year. Some large enterprises open small companies to carry out only one type of activity, which is preferential.
It's more profitable to work this way. Why is a corporate tax needed and what are the pros and cons of using it?
Pros
The main advantage of working without VAT is that the amount of reporting is reduced significantly. VAT is the most controversial tax in Russia, and sometimes even experienced accountants get confused with the calculation.
What can we say about young entrepreneurs who are just learning the basics of business and accounting. VAT calculations and reporting on this tax take up the lion's share of an accountant's working time during the reporting period.
In some large companies There is an accountant who deals only with the calculation of VAT payable and the preparation of reports on it.
Cons
However, there are also disadvantages to working on preferential terms. The main one is the inability to work with large buyers and customers.
The fact is that if an organization operates without VAT, then it does not reimburse it. Large customers and buyers “lose” those amounts of tax that are not reimbursed by the benefit recipient.
For example, Beta LLC applies OSN, and Alpha LLC is a beneficiary. Beta LLC also bought Alpha LLC goods in the amount of 1,180 rubles (VAT - 180 rubles).
Since Alpha LLC is a benefit recipient and does not pay VAT, they cannot issue an invoice with the tax amount. Consequently, Beta LLC “lost” 180 rubles - they will have to pay it themselves.
You can voluntarily “leave” the preferential regime, having calculated all the pros and cons of working on it. People think about this when “a lucrative contract looms on the horizon.”
Large amounts of income “cover” all the disadvantages of working on VAT – quarterly reporting and keeping journals for recording invoices.
Current issues
The main problem of VAT is the correct calculation of its tax base for calculation. There are such “ambiguous” operations for which the tax base can be calculated in several ways.
For example, a company was presented with a claim in the amount of 100 thousand rubles for low-quality goods. Is the claim subject to VAT? The Tax Code of the Russian Federation does not say anything about this in detail.
However, there is one that says that there is no need to calculate VAT on the claim amount.
Incorrect calculation of the tax base will lead to incorrect calculation of the tax amount, and, as a result, to incorrect payment. Paying an incomplete amount of tax is tax offense and bears responsibility.
In 2015 they planned to return the sales tax. This has not yet been done, but legislators have not “abandoned” this idea. Sales tax is the main “competitor” of VAT.
In essence, this results in double taxation on sales – both VAT and sales tax. The burden of paying these taxes falls on the end consumer.
Since 2015, the VAT declaration has become significantly fatter. Now it includes logs of “incoming” and “outgoing” invoices.
This did not cause much joy among accountants. But it added more work to the tax authorities. This was done in order to track VAT evaders.
And although VAT has been in effect for many years, there are some shortcomings in calculating the tax base and the tax itself.
Video: important topic. VAT on reimbursement of transportation costs
VAT is the most complex and controversial indirect tax in Russia. Tax authorities monitor its calculation and payment more than other taxes.
This indirect tax is the basis for the formation of the revenue side of the budget of our country.
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When anyone, even an experienced accountant, hears the word “VAT,” there is a certain trepidation. And there are objective reasons for this, because this is one of the most complex taxes, the calculation and payment of which is regulated by multiple regulatory documents. Let's try to understand the basics of VAT today.
Value added tax is indirect, for the reason that its actual payer is the final consumer. To put it very simply, the end result is that VAT is imposed on ordinary consumers who purchase goods in a store or order any services or work. Let's figure out how this happens?
VAT represents “added” value or, even more simply, a markup in the percentage established by law on goods produced, services provided and work performed. Moreover, the “added” value increases at each stage.
A good example
To understand the “intricacies” of this insidious tax, you need to understand for yourself its mechanism and its meaning.
In order to imagine the whole chain, let’s look at this point using a specific example. To do this, we will trace all stages of production and subsequent sale, for example, of shampoo.
The first stage is the enterprise that supplies raw materials for the production plant cosmetics, i.e. When selling raw materials, the first “added” value was formed, which the manufacturer included in the selling price. Next, the cosmetics factory produced the shampoo, packaged it and sold it to a retailer. Now the price of the product is made up of the cost of purchased raw materials, costs and a percentage of the planned profit of the plant and VAT, which was added by production for “its” part in the price.
Naturally, the trading company marked up the shampoo and also added VAT on it. And now the shampoo has hit the sales counter, the consumer has bought it and paid the cost, including VAT at all stages. Each of the participants in this chain paid its part of the VAT to the budget, and reimbursed it by including it in the sales price.
Now let’s present the same illustrative example, in numbers, and assume that:
- The cost of raw materials is 118 rubles (in this cost, VAT at a rate of 18% is 18 rubles);
- The selling price of shampoo at the factory for a trading enterprise is 236 rubles (in this cost, VAT at the rate of 18% is 36 rubles);
- The selling price of shampoo in a trading enterprise is 302 rubles (in this price, VAT at the rate of 18% is 46 rubles).
Being the primary source, the manufacturer of raw materials for shampoo will pay VAT to the budget in the amount of 18 rubles on the entire sales amount. A cosmetics production plant will already be able to deduct the amount of “input” VAT on raw materials of 18 rubles, which means that VAT will be payable (36 - 18) = 18 rubles. Now a trading enterprise, it will accept for deduction the amount of VAT in the amount of 36 rubles presented by the cosmetic factory in the VAT invoice, and accordingly, will pay 10 rubles (46 - 36) to the budget.
And now, according to the theory presented above, by paying VAT by each participant in the chain, we should get the amount of this tax in the final price of the product.
The amount of VAT in the final price of the product is 46 rubles = 18 rubles (supplier of raw materials) + 18 rubles (cosmetic factory) + 10 rubles (trading enterprise).
We have dealt with the essence of this tax, and now with a full understanding of the matter we can move on to the aspects of the legislation that regulate its payment.
Payers and object of taxation
VAT payers are organizations and entrepreneurs who have chosen the OSNO form of taxation. The object of accrual of this tax is the following operations in accordance with the norms of Article 146 of the Tax Code of the Russian Federation:
- Sale of works, goods and services, collateral and transfer of property rights on the territory of the Russian Federation;
- Transfer of works, goods and services for own needs on the territory of the Russian Federation;
- Construction and installation work carried out for one’s own needs;
- Import of goods into the territory of the Russian Federation.
In case of import of goods, VAT payers become entrepreneurs and organizations that apply other forms of taxation, except for OSNO.
VAT rates
VAT rates are regulated by . There are three bets in total:
- 18% is the most large size and it is established for most tax objects;
- 10% - this rate applies to the bulk of food products, as well as children's products;
- 0% - this rate is applied by exporters who have documented the fact of an export transaction by submitting the necessary set of documents to the tax authorities.
Deductions
When calculating tax, the tax base is the entire amount of revenue, but we remember the principle of this tax, which is the added value generated at each stage. So, in order for the VAT payer to transfer exactly his “added” value to the budget, there is a deduction.
The deduction is the amount of “input” VAT, i.e. VAT paid by you on the purchase of services, goods and works in the course of your business activities. Dedicated to deductions.
Let's return to our example with milk. For a dairy plant, the amount of “input” VAT is the VAT on raw materials from the agricultural enterprise. Those. Taking your revenue for a sold product as a tax base and calculating VAT on it, the amount of VAT paid on the purchase of raw materials will be deducted. Thus, VAT will be payable only on that part of the revenue that was generated at the plant itself. The same thing will happen in a trading enterprise: having charged VAT on the proceeds for sold milk, it will deduct the VAT amount of the dairy plant, and, accordingly, only the VAT amount from the trade margin will have to be paid.
Payment procedure
The timing and frequency of VAT payment are established by Article 174 of the Tax Code of the Russian Federation. The reporting period is a quarter and transfers to the budget of this tax must be made no later than the 20th day of the month that immediately follows the previous quarter. For the first quarter of the year it is April 20, for the second - July 20, for the third - October 20, and for the fourth - January 20 of the next calendar year.
VAT refund
There is also a situation when the amount of calculated VAT is less than the amount of VAT to be deducted. In this case, you are entitled to compensation for the resulting difference. To do this, you need to submit a declaration to the tax authorities in the prescribed form, undergo a desk audit, and if as a result the amount to be refunded is confirmed, then you will be returned to the current account eligible for VAT refund.
The procedure for implementing VAT refunds is regulated.
I am glad to welcome you again, dear friends! Blog author Ruslan Miftakhov is in touch. I think that today almost everyone has heard, and even personally encountered, when making purchases in stores, with such an abbreviation as “VAT”.
But not everyone understands what these letters mean and where they come from. That’s why I decided to explain what VAT is in simple words. At the end of the article you will find a cool video about a mother with a computer, watch it, you won’t regret it :)
This article will be useful and interesting both to ordinary people who are interested in this tax, and to those who already have or are planning to start their own business in the future in order to understand how to work with it. Let's get started.
So, value added tax (VAT explanation) is a fee paid by organizations that create an additional, additional market price for a product or service.
It is a small portion of the added value that arises from the difference between the revenue that the selling company received after selling goods or services and the amount of costs that it incurred to purchase specific raw materials, supplies, or products.
At the same time, this organization can produce products from purchased raw materials, or simply resell the goods, naturally at a higher price.
Value added tax appeared about a hundred years ago, replacing a sales tax paid on all revenue. However, in Russia it began to operate in 1992.
Why is it needed? The answer to this question is quite simple: today VAT is the main source of formation of the state budget, and the calculation of its final value (which we will consider in more detail a little later) frees organizations from double payment of fees to the budget.
What is the value of this bet?
According to Russian legislation, VAT is calculated at three percentage rates:
- Zero means that this fee is not charged on all products produced for export (gas, oil, precious metals, space).
- 10% - refers to the so-called preferential categories of goods: essential goods, socially significant (children's goods, medications, a number of food products).
- 18% is the most common rate, applicable to most goods and services (everything not included in the first two points).
Who pays it?
I wonder who really pays this tax, for whom is this tax burden? Of course, enterprises do this directly. But the statement that this burden falls only on business is incorrect.
Who pays for the product when it goes to retail?
That's right - the buyer, that means you and me. The company submits the declaration to the tax office, and ultimately the buyer pays a higher price, increased by the amount of this fee, thereby indirectly reimbursing the costs incurred by the seller.
Let's take a closer look at the essence of value added tax by considering the logical chain of its definition:
- When one company buys materials, components, or simply finished goods, she pays them to the supplier, taking into account VAT included in their price.
- Then, when the future price of the product is determined, the cost includes the cost of previously purchased products (materials), reduced by the amount of tax (paid in the first point). This deductible amount of the fee is recorded as a tax credit, or, in other words, it is input VAT, an amount to be deducted in the future.
- When determining the final selling price of a product (taking into account the cost, desired profit, excise taxes) to the final buyer, VAT is added to the final price (this is what we pay as buyers).
- Then, 18% is calculated from the revenue received for the product (the rates were discussed above), and a value called the tax liability is obtained.
- As a result, the company must pay the state an amount equal to the difference between the obligation (point 4) and the tax credit (point 2).
To make it even clearer, let's look at the calculation of this tax using a simple example:
The company bought doors from the manufacturer for the amount of 10,000 rubles. The amount of input VAT paid to the manufacturer will be equal to: 10,000 * 18% = 1,800 rubles.
Then this company sold the doors to customers in the store at a new price, taking into account its profit, and received revenue equal to 20,000 rubles. The amount of the obligation will be: 20,000 * 18% = 3,600 rubles.
Thus, this organization must pay the state: 3,600 – 1,800 = 1,800 rubles. Agree, it is not as difficult to understand as it seems.
Features of tax deduction
All companies are required to submit reporting – a tax return – every quarter, and no later than the established deadline (before the 25th of the next month). In case of delays, you will have to pay fines and penalties.
To fill out the quarterly report and to determine the amount that needs to be paid to the budget, as mentioned above, determine:
- tax base (all company revenue);
- tax deduction (or tax credit);
- the amount of tax to be reimbursed.
Tax deductions reduce the amount paid to the budget, since they have already been paid to the supplier. But they are accepted for deduction only if the following conditions are met:
- All purchased products for sale are subject to this fee.
- The organization has all correctly completed primary documents(delivery notes for products) and invoices (they are provided by the supplier, from whom you need to fill them out correctly).
- All products have passed accounting records in this company.
We’ve cleared up the deductions, now let’s figure out what the concept of VAT for reimbursement means.
As we have already said, the amount that needs to be paid to the state is found by subtracting the deduction amount from the tax liability. So, if for a given quarter (by the way, there are 4 quarters in a year, as well as the season of the year) the amount of deduction is higher than the calculated tax, this will mean that this organization has actually overpaid the tax.
And therefore, she will have the right to reimburse this overpayment from the budget by submitting the appropriate declaration. After the inspection verifies the correctness of all calculations and documents, a decision will be made to reimburse the overpaid tax.
Funny video of a typical mom at the computer
I suggest taking a little break from such a boring topic of taxation and watching a cool video to cheer you up :) Reminds me of my mother in some way when you try to explain something to her on a computer or smartphone =))
This concludes today's article. Have you managed to deal with this, as it seems at first glance, difficult collection and burden? I hope so. I will also be waiting for your feedback, comments, and ratings. Thank you all and see you again!
Best regards, Ruslan Miftakhov
VAT (value added tax) is the most difficult tax to understand, calculate and pay, although if you do not delve deeply into its essence, it will not seem very burdensome for a businessman, because... is an indirect tax. Indirect tax, unlike direct tax, is transferred to the final consumer.
Each of us can see the total purchase amount and the VAT amount in the store receipt, and it is we, as consumers, who ultimately pay this tax. In addition to VAT, indirect taxes include excise taxes and customs duties. To understand the complexity of VAT administration for its payer, you will need to understand the main elements of this tax.
VAT elements
Objects of VAT taxation are:
- sale of goods, works, services on the territory of Russia, transfer of property rights (the right to claim debt, intellectual rights, rental rights, the right to permanent use of land, etc.), as well as gratuitous transfer of ownership of goods, results of work and provision of services. A number of transactions specified in paragraph 2 of Article 146 of the Tax Code of the Russian Federation are not recognized as objects of VAT taxation;
- carrying out construction and installation work for own consumption;
- transfer for one's own needs of goods, works, services, the costs of which are not taken into account when calculating income tax;
- importation of goods into the territory of the Russian Federation.
Goods and services listed in Article 149 of the Tax Code of the Russian Federation are not subject to VAT. Among them there are socially significant ones, such as: sales of certain medical goods and services; nursing and child care services; sale of religious items; passenger transportation services; educational services etc. In addition, these are services in the securities market; banking operations; insurer services; legal services; sale of residential buildings and premises; public utilities.
Tax rate VAT can be equal to 0%, 10% and 18%. There is also the concept of “settlement rates”, equal to 10/110 or 18/118. They are used in operations specified in paragraph 4 of Article 164 of the Tax Code of the Russian Federation, for example, when receiving advance payment for goods, work, services. All situations in which certain tax rates are applied are given in Article 164 of the Tax Code of the Russian Federation.
Please note: from 2019 the maximum VAT rate will be 20% instead of 18%. The calculated rate instead of 18/118 will be 20/120.
Export transactions are subject to a zero tax rate; pipeline transport of oil and gas; electricity transmission; transportation by rail, air and water transport. At a 10% rate - some food products; most products for children; medicines and medical products that are not included in the list of essential and vital; breeding cattle. For all other goods, works and services, the VAT rate is 18%.
Tax base for VAT in the general case, it is equal to the cost of goods, works, and services sold, taking into account excise taxes for excisable goods (Article 154 of the Tax Code of the Russian Federation). At the same time, articles 155 to 162.1 of the Tax Code of the Russian Federation provide details for determining the tax base separately for different cases:
- transfer of property rights (Article 155);
- income from mandate, commission or agency agreements (Article 156);
- when providing transportation services and international communication services (Article 157);
- sale of an enterprise as a property complex (Article 158);
- carrying out construction and installation work and transferring goods (performing work, providing services) for one’s own needs (Article 159);
- importation of goods into the territory of the Russian Federation (Article 160);
- when selling goods (work, services) on the territory of the Russian Federation by taxpayers - foreign persons (Article 161);
- taking into account the amounts associated with settlements for payment for goods, works, services (Article 162);
- during the reorganization of organizations (Article 162.1).
Tax period, that is, the period of time at the end of which the tax base is determined and the amount of tax payable under VAT is calculated, is a quarter.
VAT payers admit Russian organizations and individual entrepreneurs, as well as those who move goods across the customs border, that is, importers and exporters. Taxpayers working under special tax regimes do not pay VAT: , (except for cases when they import goods into the territory of the Russian Federation) and participants in the Skolkovo project.
In addition, taxpayers who meet the requirements of Article 145 of the Tax Code of the Russian Federation can receive an exemption from VAT: the amount of revenue from the sale of goods, work, and services for the three previous months, excluding VAT, did not exceed two million rubles. The exemption does not apply to individual entrepreneurs and organizations selling excisable goods.
What is a VAT deduction?
At first glance, since VAT must be charged on the sale of goods, works, and services, it is no different from sales tax (turnover). But if we return to its full name - “value added tax”, then it becomes clear that not the entire sales amount should be subject to it, but only added value. Added value is the difference between the cost of goods, works, services sold and the costs of purchasing materials, raw materials, goods, and other resources spent on them.
This makes clear the need to obtain a VAT tax deduction. The deduction reduces the amount of VAT accrued upon sale by the amount of VAT that was paid to the supplier when purchasing goods, works, and services. Let's look at an example.
Organization “A” purchased goods from organization “B” for resale at a cost of 7,000 rubles per unit. The VAT amount was 1,260 rubles (at a rate of 18%), the total purchase price was 8,260 rubles. Next, organization “A” sells the product to organization “C” for 10,000 rubles per unit. VAT on sales is equal to 1,800 rubles, which organization “A” must transfer to the budget. In the amount of 1,800 rubles, the VAT (1,260 rubles) that was paid during the purchase from organization “B” is already “hidden”.
In fact, the obligation of organization “A” to the budget for VAT is only 1,800 - 1,260 = 540 rubles, but this is provided that the tax authorities offset this input VAT, that is, provide the organization with a tax deduction. Receiving this deduction is accompanied by many conditions; below we will consider them in more detail.
In addition to deducting VAT amounts paid to suppliers when purchasing goods, works, services, VAT on sales can be reduced by the amounts specified in Article 171 of the Tax Code of the Russian Federation. This is VAT paid when importing goods into the territory of the Russian Federation; when returning goods or refusing to perform work or provide services; when the cost of shipped goods (work performed, services provided) decreases, etc.
Conditions for obtaining input VAT deduction
So, what conditions must a taxpayer fulfill in order to reduce the amount of VAT upon sale by the amount of VAT that was paid to suppliers or when importing goods into the territory of the Russian Federation?
- must have a connection with taxable objects(Article 171(2) of the Tax Code of the Russian Federation). Tax authorities often wonder whether these purchased goods will actually be used in transactions subject to VAT? Another similar question is whether there is an economic justification (orientation to making a profit) when purchasing these goods, works, services?
That is, the tax authority is trying to refuse to receive a tax deduction for VAT, based on its assessment of the feasibility of the taxpayer’s activities, although this does not apply to the mandatory conditions for deducting input VAT. As a result, VAT payers file many lawsuits for unfounded refusals to receive deductions in this regard. - Purchased goods, works, services must be registered(Article 172(1) of the Tax Code of the Russian Federation).
- Availability of a correctly executed invoice. Article 169 of the Tax Code of the Russian Federation provides requirements for the information that must be indicated in this document. When importing, instead of an invoice, the fact of VAT payment is confirmed by documents issued by the customs service.
- Until 2006, to obtain a deduction it was condition on actual payment VAT amounts. Now, Article 171 of the Tax Code of the Russian Federation provides only three situations in which the right to deduction arises in relation to the VAT paid: when importing goods; on business travel and entertainment expenses; paid by tax agent buyers. For other situations, the turnover of “tax amounts presented by sellers” applies.
- Prudence and caution when choosing a counterparty. We have already talked about ““. Refusal to receive a VAT tax deduction may also be caused by your connection with a suspicious counterparty. If you want to reduce the VAT that you must pay to the budget, we recommend that you conduct a preliminary check of your transaction partner.
- Isolation of VAT as a separate line. Article 168 (4) of the Tax Code of the Russian Federation requires that the amount of VAT in settlement and primary accounting documents, as well as in invoices, be highlighted as a separate line. Although this condition is not mandatory to receive a tax deduction, it is necessary to monitor its presence in the documents so as not to cause tax disputes.
- Timely issuance of invoices by the supplier. According to Article 168 (3) of the Tax Code of the Russian Federation, an invoice must be issued to the buyer no later than five calendar days, counting from the date of shipment of goods, performance of work, provision of services. Surprisingly, even here the tax authorities see a reason for refusing the buyer a tax deduction, although this requirement applies only to the seller (supplier). The courts on this issue take the position of the taxpayer, reasonably noting that the five-day period for issuing an invoice is not a prerequisite for deduction.
- The integrity of the taxpayer himself. Here it is already necessary to prove that the VAT payer himself, who wants to receive a deduction, is a bona fide taxpayer. The reason for this is the same resolution of the Plenum of the Supreme Arbitration Court of October 12, 2006 N 53, which defines the “defects” of the counterparty. Paragraphs 5 and 6 of this document contain a list of circumstances that may indicate that a tax benefit is unjustified (and the deduction of input VAT is also a tax benefit)
Suspicious, according to YOU, are:
- the impossibility of the taxpayer actually carrying out business transactions;
- lack of conditions for achieving the results of relevant economic activities;
- carrying out transactions with goods that were not produced or could not be produced in the specified volume;
- accounting for tax purposes only those business transactions that are associated with obtaining tax benefits.
These are conditions that are quite harmless at first glance, such as: creation of an organization shortly before a business transaction; one-time nature of the operation; use of intermediaries in transactions; carrying out the transaction at a location other than the taxpayer's location.
Based on this resolution, tax inspectors acted very simply - they refused to receive a VAT deduction, simply listing these conditions. The zeal of its employees had to be restrained by the Federal Tax Service itself, because... the number of those “unworthy” of receiving tax benefits simply went off scale. In a letter dated 05.24.11 No. SA-4-9/8250, the Federal Tax Service notes that “... in the practice of tax control there are cases when the tax authority, avoiding clarity in qualifying the circumstances of the taxpayer receiving an unjustified tax benefit, limits itself to references to paragraphs 1 , 5, 6, 10 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated October 12, 2006 No. 53 draws conclusions that the taxpayer received an unjustified tax benefit. At the same time, other circumstances that clearly indicate that a business transaction has been completed are not taken into account.”
- Additional terms To obtain a VAT tax deduction, there may be a number of other requirements tax authorities to the preparation of documents (accusations of incompleteness, unreliability, and inconsistency of the specified information are typical); to the profitability of the activities of the VAT payer; an attempt to re-qualify contracts, etc. If you are sure that you are right, in all these cases it is worth at least appealing the decisions of the tax authorities to refuse to receive a VAT tax deduction in a higher tax authority.
VAT on export
As we have already said, when exporting goods, their sale is taxed at a rate of 0%. The company must justify the right to such a rate by documenting the fact of export. To do this, along with the VAT return, you must submit a package of documents to the tax office (copies of the export contract, customs declarations, transport and shipping documents with customs marks).
The VAT payer is given 180 days from the date the goods are placed under export customs procedures to submit these documents. If during this period necessary documents will not be collected, then VAT will have to be paid at a rate of 10% or 18%.
VAT on import
When importing goods into the territory of the Russian Federation, importers pay VAT at customs, which is calculated as part of customs payments (Article 318 of the Customs Code of the Russian Federation). An exception is the import of goods from the Republic of Belarus and the Republic of Kazakhstan; in these cases, payment of VAT is formalized at the tax office in Russia.
Please note that when importing goods into Russia, all importers pay VAT, including those working under special tax regimes (USN, UTII, Unified Agricultural Tax, PSN), and those who are exempt from paying VAT under Article 145 of the Tax Code of the Russian Federation.
The VAT rate for imports is 10% or 18%, depending on the type of goods. An exception is the goods specified in Article 150 of the Tax Code of the Russian Federation, for the import of which VAT is not charged. The tax base on which VAT will be charged when importing goods is calculated as the total sum of the customs value of goods, customs duties and excise taxes (for excisable goods).
VAT under simplified tax system
Although simplifiers are not VAT payers, issues related to this tax nevertheless arise in their activities.
First of all, why do OSNO taxpayers not want to work with suppliers on the simplified tax system? The answer here is this: the supplier on the simplified tax system cannot issue an invoice to the buyer with allocated VAT, which is why the buyer on the OSNO will not be able to apply a tax deduction for the amount of input VAT. The solution here is possible in reducing the selling price, because unlike suppliers to , simplified sellers do not have to charge VAT on sales.
Sometimes simplifiers still issue the buyer an invoice with a allocated VAT, which obliges them to pay this VAT and submit a declaration. The fate of such an invoice may be controversial. Inspections often deny buyers a tax deduction, citing the fact that simplifiers are not VAT payers (even though they actually paid VAT). True, most courts in such disputes support the right of buyers to deduct VAT.
If, on the contrary, a simplifier buys goods from a supplier working on OSNO, then he pays VAT, for which he cannot receive a deduction. But, according to Article 346.16 of the Tax Code of the Russian Federation, a taxpayer using a simplified system can take into account input VAT in his expenses. This applies, however, only to payers, because... on USN Income no expenses are taken into account.
VAT return and tax payment
The VAT return must be submitted at the end of each quarter, no later than the 25th day of the next month, that is, no later than the 25th of April, July, October and January, respectively. Reporting is accepted only in electronic form; if it is presented on paper, it is not considered submitted. Starting from the report for the 1st quarter of 2017, the VAT return is submitted in an updated form (as amended by Order of the Federal Tax Service dated December 20, 2016 N ММВ-7-3/696@).
The procedure for paying VAT differs from other taxes. The tax amount calculated for the reporting quarter must be divided into three equal parts, each of which must be paid no later than the 25th day of each of the three months of the next quarter. For example, according to the results of the first quarter, the amount of VAT payable amounted to 90 thousand rubles. We divide the tax amount into three equal parts of 30 thousand rubles each, and pay it within the following deadlines: no later than April 25, May, June, respectively.
We draw the attention of all LLCs - organizations can pay taxes only by non-cash transfer. This is a requirement of Art. 45 of the Tax Code of the Russian Federation, according to which the organization’s obligation to pay tax is considered fulfilled only after presentation of a payment order to the bank. The Ministry of Finance prohibits paying LLC taxes in cash.
If you did not manage to pay taxes or contributions on time, then in addition to the tax itself, you will also have to pay a penalty in the form of a penalty, which can be calculated using our calculator.
