The organization operates without VAT, interacting with the organization that is the payer of this tax. The situation is not uncommon. Let's consider the basic rules for documenting transactions between such companies and the features of accepting goods (works, services) for accounting, as well as VAT for each party.
The seller does not pay VAT
When an organization operates without VAT, it draws up a contract, an invoice for payment and shipping documents addressed to the buyer (invoice or act) without indicating the amount of VAT. In the appropriate places, either a dash or the entry “Excluding tax (VAT)” is placed. In the text of the contract, invoice or in a free-form letter, it is recommended to indicate the reason why the seller does not pay VAT.
Organizations using exemption from VAT payer obligations under Articles 145 (based on revenue volume) and 145.1 (participant of the Skolkovo project) of the Tax Code of the Russian Federation must, upon shipment, draw up a sales invoice using the entry “Without tax (VAT)” in the corresponding column document (clause 5 of article 168 of the Tax Code of the Russian Federation).
For those who plan to apply VAT exemption, We recommend that you read the material .
Organizations that apply special tax regimes (Unified Agricultural Tax, simplified tax system or UTII) are not VAT payers and are not required to issue an invoice (clause 3 of article 169 of the Tax Code of the Russian Federation). Also, organizations that carry out transactions that are not subject to VAT in accordance with Art. 149 of the Tax Code of the Russian Federation (subparagraph 1, clause 3, Article 169 of the Tax Code of the Russian Federation). If these organizations decide to issue such a document, then it is recommended to draw it up similarly to the requirements given in paragraph 5 of Art. 168 Tax Code of the Russian Federation.
The buyer, who is a VAT payer, upon receipt of documents from an organization operating without VAT, takes into account goods (work, services) at their cost indicated in the documents. The VAT that is missing from the seller’s documents is not taken into account by the buyer and is not calculated additionally.
In documents for payment to a seller working without VAT, the “Base of payment” field must contain the entry “Without tax (VAT).”
The buyer does not pay VAT
When the supplier of an organization that operates without VAT is an organization that pays VAT, the contract, invoice for payment and shipping documents addressed to the buyer (invoice or act) are drawn up with VAT. In the corresponding columns and places in the text of the documents, the tax rates and amounts that form the total total amount of the document are indicated.
The VAT payer, obliged in accordance with clause 3 of Art. 169 of the Tax Code of the Russian Federation, upon sale, draw up an invoice; with the written consent of the parties to the transaction, this document may not be drawn up for taxpayers working without VAT (subclause 1, clause 3, article 169 of the Tax Code of the Russian Federation).
Will help you obtain consent for non-drawing of invoices our material .
In this case, the VAT payer must reflect in the sales book either the details of the primary documents or the details of the invoice issued for himself in a single copy. Failure to perform these actions will result in an understatement of the amount of VAT on sales.
If the organization purchasing goods (works, services) operates without VAT, then it takes into account the tax highlighted in the documents of the supplier working with VAT in one of the following ways:
- In full, when accepted for accounting, it is included in the cost of these goods (works, services) at a time, according to subparagraph. 3 p. 2 art. 170 Tax Code of the Russian Federation. This method is used by organizations that use the exemption from VAT payer obligations under Art. 145 and 145.1 of the Tax Code of the Russian Federation, as well as organizations located on UTII (taking into account the provisions of clause 7 of Article 346.26, Chapter 26.3 of the Tax Code of the Russian Federation).
- In a certain order (depending on the type of expenses to which the tax relates and the fact of their payment) it is included in expenses that reduce income. This method is used when using the simplified tax system with the object of taxation “income minus expenses” and the unified agricultural tax (subclause 8, clause 2, article 346.5, chapter 26.1 and subclause 8, clause 1, article 346.16, chapter 26.2 of the Tax Code of the Russian Federation).
In documents for payment to a supplier working with VAT, in the “Base of payment” field, the buyer who does not pay VAT must highlight the amount of VAT that is part of this payment.
A supplier working with VAT, upon receiving an advance payment from a buyer who does not pay VAT for upcoming deliveries, in the usual manner for a VAT payer, issues an invoice for the received advance in one copy. A buyer who does not pay VAT does not need an advance invoice issued by the supplier.
Results
A seller who does not pay VAT or is exempt from paying tax is not required to issue invoices. A buyer who is a defaulter or exempt from paying VAT takes into account input tax depending on the tax system he has adopted.
When forming the terms of a payment agreement, everything depends on the taxation system used by the parties to the agreement (STS, OSN, other special regime), the correctness of accounting records and the parties’ awareness of the rules and procedure for paying tax, as well as on a clear indication in the contract of the obligations of the parties in terms of payment of VAT. Based on this, the following contract options are found.
Option 1. VAT in the contract is calculated separately and is indicated in the text along with the cost of goods, work, services, property rights. VAT is highlighted in the contract. In this case, both parties apply a common taxation system. Accordingly, the buyer and seller agree in advance on all the conditions for payment, execution of the agreement and their obligations regarding taxation. In such a situation, the buyer knows the amount of VAT and will pay the tax based on the invoice presented to him.
Option 2. A situation where one of the parties to the agreement applies a special taxation regime, for example, the simplified tax system. Then the contract makes reference to this fact. In most cases, in such transactions there are no conflict or controversial issues, since initially everything is obvious: there is no obligation to calculate VAT, tax legislation does not provide for the requirement to allocate VAT as part of the contract price (see, for example, the letter of the Ministry of Finance of the Russian Federation dated June 1, 2016 No. 03-11-11/38624).
Option 3. The presence of one of the parties to the agreement has the right to receive a tax benefit (Article 145 of the Tax Code of the Russian Federation - exemption from fulfilling the duties of a taxpayer; Article 149 of the Tax Code of the Russian Federation - carrying out transactions not subject to taxation) also implies the legal consequences set out in option 2 The contracts also make reference to preferential circumstances, but indicate the price of the contract as a whole. Additionally, it is recommended to request from the party that has a preferential tax regime, documentary evidence (certificate of state registration of a legal entity, charter with the types of activities of the organization, other documents confirming the right to receive a tax benefit, tax exemption). However, it is not uncommon for contracts to lack a separate line indicating the calculation of VAT and its amount.
Contract without VAT
It happens that VAT is not indicated in the contract at all. In this case, the seller is still obliged to present VAT to the buyer and pay it (clause 1 of Article 168, clause 1 of Article 173 of the Tax Code of the Russian Federation). However, here you need to correctly calculate the tax and find out whether the VAT amount is included in the contract or not. Depending on what the parties agree on, the tax calculation formula will be different.
If companies decide that tax is included in the contract price, then the formula will be:
Contract amount × 20/120 (or 10/110 - depending on the tax rate - Article 164 of the Tax Code of the Russian Federation) = VAT.
If the tax is calculated in excess of the cost of the agreement, then a different formula must be used to calculate it:
Contract amount × 20% (or 10% - depending on the tax rate - Article 164 of the Tax Code of the Russian Federation) = VAT.
Thus, when calculating and presenting VAT for payment, it is necessary to analyze the terms of a specific agreement. In order to avoid ambiguity in the interpretation of the contract, it is additionally recommended to clearly formulate the conditions for the inclusion or non-inclusion of VAT in the contract at the stage of preparing its draft. Initially, companies must clearly decide whether to include VAT in the contract price or to pay tax on top of the price, and also spell out these conditions in detail in the contract. Upon payment of VAT, the seller may issue an additional invoice to the buyer for the amount of VAT in excess of the contract price. Sometimes companies enter into an additional agreement, with the help of which it is possible to resolve controversial situations regarding the inclusion of VAT in the contract and its payment by the buyer.
note
In order to avoid ambiguity in the interpretation of the contract, it is additionally recommended to clearly formulate the conditions regarding the inclusion or non-inclusion of VAT in the price of the contract at the stage of preparing its draft.
Elena Orlova, a specialist in the legal department of Sigma LLC, says: “Before the creation of our department in the company, sales managers were in charge of drawing up contracts. In this regard, contracts with buyers were all inconsistent. If the commercial terms were read and corrected, then no one paid attention to the accounting nuances. As a result, after some time the chief accountant received the signed original contract, in which the clients wrote whatever they wanted. This led to problems in accounting, updated declarations and disputes with the accounting departments of counterparties. Now, before signing contracts, we make sure to submit them for approval to the accounting department so that accountants have the opportunity to make changes to tax conditions.”
Price circumstances
I would especially like to note that the letter of the Ministry of Finance and the Federal Tax Service dated October 5, 2016 No. SD-4-3/18862@ provided clarification on the issue of calculating VAT if the contract price was formed without the allocation of tax. According to the position of officials, “the circumstances of the formation of the contract price must be established in each specific case based on the evidence in its totality and connection.” In other words, government agencies in their position confirm the need for clear regulation of the procedure for calculating and paying VAT when drawing up agreements. As follows from paragraph 17 of the resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated May 30, 2014 No. 33, when calculating the amount of VAT payable, it should be taken into account that, within the meaning of the provisions of subparagraphs 1 and 4 of Article 168 of the Tax Code of the Russian Federation, the amount of tax charged to the buyer when selling goods (works, services), transfer of property rights, must be taken into account when determining the final amount of the price specified in the contract and highlighted in settlement and primary accounting documents, invoices as a separate line. At the same time, the burden of ensuring compliance with these requirements lies with the seller as a taxpayer, who is obliged to take into account such a sales operation when forming the tax base and calculating the tax payable to the budget based on the results of the corresponding period.
In this regard, if the contract does not directly indicate that the price established therein does not include the amount of tax, and otherwise does not follow from the circumstances preceding the conclusion of the agreement or other terms of the contract, the courts should proceed from the fact that the presented the seller allocates the tax amount to the buyer last of the price specified in the contract, for which it is determined by the calculation method
(clause 4 of article 164 of the Tax Code of the Russian Federation). Thus, according to the conclusions of the court, if, based on the terms of the contract and other circumstances related to the conclusion of the contract, it follows that the price indicated in it is formed without taking into account tax, the application of the estimated tax rate provided for in paragraph 4 of Article 164 of the Tax Code is unfounded.
Legal risks
The existing judicial practice is represented by complex and ambiguous examples. This is due, first of all, to the fact that the parties inattentively and frivolously approach the issue of drawing up contracts and the correct allocation and calculation of the amount of VAT. I will give an example of the most interesting and popular conclusions of the arbitrators.
Buyers do not always transfer VAT to sellers if, according to the terms of the contract, the price does not include the amount of tax. However, this does not affect the seller’s obligation to pay VAT to the budget. In such cases, the seller will have to transfer the tax from his own funds with subsequent recovery of the paid amount from the buyer in court (for example, the resolution of the FAS Moscow District dated July 23, 2012 in case No. A40-68414/11-60-424, FAS Volgo-Vyatka district dated March 11, 2012 in case No. A43-7468/2011, FAS Far Eastern District dated December 12, 2011 No. F03-6075/2011).
Incorrect indication by the parties of the VAT tax rate in the agreement cannot be the basis for exemption from the obligation to reimburse the seller for the tax, regardless of the agreement of this condition by the parties to the agreement.
Payment in addition to the cost of the contract of the corresponding amount of VAT is provided for by the Tax Code and is obligatory for the parties to the contract by virtue of paragraph 1 of Article 422 of the Civil Code (in confirmation of this, see, for example, the decision of the Third Arbitration Court of Appeal dated November 26, 2009 in case No. A33-10186/ 2009, resolution of the FAS North-Western District dated August 10, 2011 in case No. A05-5565/2010, resolution of the FAS North-Western District dated September 27, 2010 in case No. A05-1517/2010).
Article 346.11. General provisions of the simplified tax system - simplified
1. The simplified taxation system for organizations and individual entrepreneurs is applied along with other taxation regimes provided for by the legislation of the Russian Federation on taxes and fees.
The transition to a simplified taxation system or a return to other taxation regimes is carried out voluntarily by organizations and individual entrepreneurs in the manner prescribed by this chapter.
2. The application of a simplified system of taxation by organizations provides for their exemption from the obligation to pay corporate income tax (with the exception of tax paid on income taxed at the tax rates provided for in paragraphs 1.6, 3 and 4 of Article 284 of this Code), property tax of organizations ( with the exception of the tax paid in respect of real estate objects, the tax base for which is determined as their cadastral value in accordance with this Code). Organizations applying the simplified taxation system are not recognized as taxpayers of value added tax, with the exception of value added tax payable in accordance with this Code when importing goods into the territory of the Russian Federation and other territories under its jurisdiction (including tax amounts subject to payment upon completion of the customs procedure of the free customs zone on the territory of the Special Economic Zone in the Kaliningrad Region), as well as value added tax paid in accordance with Articles 161 and 174.1 of this Code.
The paragraph is no longer valid.
Other taxes, fees and insurance premiums are paid by organizations applying the simplified taxation system in accordance with the legislation on taxes and fees.
3. The application of a simplified taxation system by individual entrepreneurs provides for their exemption from the obligation to pay personal income tax (in relation to income received from business activities, with the exception of tax paid on income in the form of dividends, as well as on income taxed at tax rates , provided for in paragraphs 2 and 5 of Article 224 of this Code), property tax for individuals (in relation to property used for business activities, with the exception of objects of taxation with property tax for individuals included in the list determined in accordance with paragraph 7 of Article 378.2 of this Code, taking into account the features provided for in paragraph two of paragraph 10 of Article 378.2 of this Code). Individual entrepreneurs applying the simplified taxation system are not recognized as taxpayers of value added tax, with the exception of value added tax payable in accordance with this Code when importing goods into the territory of the Russian Federation and other territories under its jurisdiction (including tax amounts, payable upon completion of the customs procedure of the free customs zone on the territory of the Special Economic Zone in the Kaliningrad Region), as well as value added tax paid in accordance with Articles 161 and 174.1 of this Code.
The paragraph is no longer valid.
Other taxes, fees and insurance premiums are paid by individual entrepreneurs using the simplified taxation system in accordance with the legislation on taxes and fees.
4. For organizations and individual entrepreneurs using the simplified taxation system, the current procedure for conducting cash transactions and the procedure for submitting statistical reporting are preserved.
5. Organizations and individual entrepreneurs applying the simplified taxation system are not exempt from performing the duties of tax agents, as well as the duties of controlling persons of controlled foreign companies provided for by this Code.
It would seem that VAT and the simplified tax system are incompatible! However, there are several ambiguous situations when “simplified” people must pay VAT to the country’s budget.
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If the tax authorities “notice” this, the “simplified” person will have to pay VAT, hand it over and, most likely, pay a fine and penalties.
“Uproshchenets” pays VAT in other cases:
- if he performs the duties of a VAT payer;
- if he is a VAT tax agent.
The question arises: do “simplified people” pay VAT or not?
The simplifier performs the duties of a VAT payer
A “Simpler” pays VAT when he fulfills the duties of a VAT payer. This is done in the following cases:
| Situation | Procedure |
| At the request of its counterparty, the “simplifier” issues him an invoice with allocated VAT |
|
| An enterprise using the simplified tax system is responsible for maintaining tax records when carrying out transactions on or |
This needs to be done only for those operations that relate to a simple or investment partnership agreement. For its main types of activity, this is not necessary, therefore, the “simplified” must keep separate records |
| An enterprise on the simplified tax system is a trustee or concessionaire in or on the territory of our country |
|
Important! The “simplified” company must issue an invoice no later than 5 calendar days from the date of shipment of the goods. This is stated in.
If acting as a tax agent
If a “simplifier” acts as a tax agent, he is also obliged to pay VAT to the budget of our country.
He must do this in the following cases:
| Situation | Procedure |
| An enterprise under the simplified tax system is a lessee of state or municipal property. In the contract, the rental amount is indicated including VAT. |
|
| The situation is similar to the previous one, but VAT is not indicated in the contract |
|
| An enterprise uses the simplified tax system to purchase goods and services from a counterparty that is not registered with the Russian tax office. There is a condition - the place of sale of these goods is Russia |
|
If a simplifier pays VAT as a tax agent, then he issues an invoice to himself. But this must also be done within 5 days after settlement with the counterparty.
Other situations where an enterprise acts as a tax agent on the simplified tax system are listed in.
Payment of VAT without providing an invoice
An enterprise using the simplified tax system can pay VAT, but not issue an invoice to the counterparty.
This is done in the following cases:
In this case, you do not need to submit a tax return. However, if goods are imported from Belarus or Kazakhstan, then a declaration on indirect taxes must be submitted.
This must be done no later than the 20th day of the next month, which follows the month in which the goods were imported into our country.
Issuing an invoice without paying tax
There are also opposite situations when a “simplified” person must issue an invoice, but is not required to pay tax. This:
| Situation | Procedure |
| An enterprise using the simplified tax system sells on its own behalf the goods of a counterparty who is a payer of this tax. |
|
| “Uproshchenets” purchases goods on its own behalf for a counterparty who is a VAT payer |
|
In these cases, there is no need to file a VAT return. Invoices are issued according to the general rule - no later than 5 calendar days after payment for the goods.
Video: VAT under simplified tax system
Reflection of input VAT
An enterprise that applies the simplified tax system, but for some reason must calculate VAT, must reflect “input” VAT according to all the rules.
This should be done as follows:
From the procurement side
When purchasing goods or materials from a counterparty that applies the general tax regime, the “simplified” must reflect the “input” VAT. The counterparty to the OSN does not have the right to deduct this VAT.
By purchased goods
If a “simpler” buys goods from an enterprise in the main mode, the latter provides him with an invoice with the amount of VAT.
According to this law, he can supply goods and materials if he wins the tender.
Based on purchased materials
Emerging nuances
VAT is a rather controversial tax. There are many nuances in its calculation, calculation and payment, ignorance of which can lead to problems with the tax authorities.
VAT compensation in the estimate
Since an enterprise using the simplified tax system is exempt from paying VAT, they do not have the right to include this tax in the estimate for their work. Often partners have problems with mutual settlements because of this.
You cannot simply exclude VAT from . It is not right! Then there will be a difference in the amount of VAT for the buyer.
And an indefinite amount will “hang” on him. Where should I put the VAT amount? For this purpose, there is a special line in the estimate “VAT compensation under the simplified tax system.”
It exists in order to avoid such incidents as a “hanging” amount of tax, which the “simplified” does not compensate for, and its counterparty under the general regime cannot accept for deduction.
This line contains the VAT amount for the entire transaction. Each estimate includes limited costs. VAT is included in these costs.
Do I need an invoice?
As already mentioned, a “simplifier” does not have the right to issue a VAT invoice for its transactions, with the exception of some cases that were mentioned above.
If he does this, he will have to pay to the budget the amount of VAT specified in this document. Therefore, he can write out this document, but instead of the VAT amount, put a dash.
Then the tax authorities will not have any complaints against him. The simplifiers must take from their counterparties who apply the general regime.
They take this document into account. They present this book to the tax authorities during an audit.
Based on this data from this book, they calculate the amount of single tax payable.
Features of individual entrepreneurs
An individual entrepreneur, just like any other organization on the simplified tax system, is not a VAT payer. However, for individual entrepreneurs there are operations and actions in which he will be obliged to pay VAT to the budget.
Individual entrepreneurs have no special features regarding the calculation and payment of VAT. He pays this tax on a “simplified” basis in the same cases as a legal entity.
Problems with the commission agreement
Being a commission agent, a “simplified” must issue an invoice with VAT to buyers of commission goods, indicating in it the details of the principal, that is, the owner of the goods.
The “simplifier” should not take into account the money received from customers in his income - this is the principal’s revenue. The income of the “simplified” person will be a commission.
But it is not subject to VAT, since the commission agent is not its payer. Exactly the same procedure for VAT with or.
What to do when switching from simplified tax system to OSNO
The transition to VAT using the simplified tax system is carried out in 2 ways:
- voluntarily;
- forcibly.
A voluntary transition means that the enterprise made this decision on its own and no longer sees any economic sense in applying the preferential treatment.
A forced transition means that one of the conditions for using the “simplified version”, which are listed in.
In this case, the taxpayer may have problems with taxes. An enterprise, having switched to the OSN, becomes a payer of all taxes from the beginning of the tax period in which the transition took place.
Therefore, it is necessary to pay all taxes, including VAT, as quickly as possible.
He must pay VAT and submit a return by the 20th day of the month following the tax period in which the forced transition occurred.
Video: VAT during intermediary activities on the simplified tax system: features, changes It turns out that the use of such a preferential regime as “simplified” does not completely exempt the taxpayer who applies it from paying VAT.
There are quite a lot of situations when a “simplified” person is obliged to both pay tax to the budget and file a declaration. The most common is the request of the counterparty to issue him an invoice with VAT.
What is not subject to VAT, see Article 146 of the Tax Code. First of all, these are operations that are not implementation. The code also contains a list of transactions that are not subject to VAT due to exemption. But it is dangerous to confuse them.
How to recover VAT from an advance payment -
What transactions are not subject to VAT?
There are two types of transactions on which companies and entrepreneurs have the right not to charge tax. The first type is transactions that are taxable. The second type is transactions that are exempt from VAT.
Transactions that are not subject to taxation
The Tax Code contains a list of transactions for which VAT is charged. To determine what is not subject to VAT, you need to look at paragraph 1 of Article 146 of the Tax Code of the Russian Federation. If the operation does not meet the criteria from this article, then it is not an object. This means that this is an operation not subject to VAT. For example, these are penalties and fines that the company transfers under an agreement with the counterparty.
In addition, the Tax Code has a list of transactions that are not an object. Such transactions are not subject to VAT on the basis of paragraph 2 of Article 146 of the Tax Code.
First of all, these are transactions that, according to the law, are not sales (Article 146 of the Tax Code of the Russian Federation). To understand in what cases a transaction is not subject to VAT, you need to look at paragraph 3 of Article 39 of the Tax Code. It lists operations that are not recognized as implementations. For example:
- transfer of assets to the legal successor during the reorganization of the company (subclause 2, clause 3, article 39 of the Tax Code of the Russian Federation);
- transfer of property to a participant in a business company within the limits of his initial contribution upon his withdrawal from the company, as well as upon liquidation of the company (subclause 5, clause 3, article 39 of the Tax Code of the Russian Federation);
- transactions involving the circulation of foreign currency, except for numismatics (subclause 1, clause 3, article 39 of the Tax Code of the Russian Federation);
- transfer of property, if such an operation is of an investment nature (subclause 4, clause 3, article 39 of the Tax Code of the Russian Federation).
In addition to such transactions, transactions not subject to VAT include:
- gratuitous transfer of residential buildings, kindergartens, roads, electrical networks and other facilities to state authorities and local self-government (subclause 2, clause 2, article 146 of the Tax Code of the Russian Federation);
- transfer of property of state and municipal enterprises during privatization (subclause 3, clause 2, article 146 of the Tax Code of the Russian Federation);
- sale of land plots and shares in them (subclause 6, clause 2, article 146 of the Tax Code of the Russian Federation);
- transfer of property rights to the legal successor of the organization (subclause 7, clause 2, article 146 of the Tax Code of the Russian Federation).
For some transactions that are exempt from VAT, an organization may pay this tax (i.e., refuse the exemption). The list of such operations is established in paragraph 3 of Article 149 of the Tax Code of the Russian Federation. The organization independently decides whether or not to use the exemption for such transactions.
If an organization applies an exemption, then VAT presented by suppliers of goods (work, services) used in such operations cannot be deducted. Include input tax amounts in the cost of such goods (works, services). How to pay VAT on tax-exempt transactions >>>
Transactions that are exempt from tax by law
The following transactions are exempt from VAT:
- sale of medical goods specified in the closed list (approved by Decree of the Government of the Russian Federation of September 30, 2015 No. 1042, subparagraph 1, paragraph 2, article 149 of the Tax Code of the Russian Federation);
- sale to canteens of educational and medical institutions of food products produced by catering organizations (subparagraph 5, paragraph 2, article 149 of the Tax Code of the Russian Federation);
- transfer of goods and property rights to charity (subclause 12, clause 3, article 149 of the Tax Code of the Russian Federation);
- issuance of sureties and guarantees by non-banking organizations (subclause 15.3, clause 3, article 149 of the Tax Code of the Russian Federation);
- sale of residential buildings, premises and shares in them (subparagraph 22, paragraph 3, article 149 of the Tax Code of the Russian Federation);
- transfer for advertising purposes of goods, the cost of acquisition or creation of which does not exceed 100 rubles per unit (subclause 25, clause 3, article 149 of the Tax Code of the Russian Federation).
A complete list of non-taxable VAT transactions can be found in Article 149 of the Tax Code.
Are VAT benefits available in 2019?
Olga Duminskaya answers,
Advisor to the State Civil Service of the Russian Federation, 2nd class
«
Yes. Companies still have the right not to impose taxes on the sale of goods, works, and services specified in Article 149 of the Tax Code. For example, there is no need to calculate VAT when transferring promotional items worth 100 rubles. and less.
Only the benefit for waste paper was canceled (Clause 2, Article 2 of the Federal Law of June 2, 2016 No. 174-FZ). At the same time, in this case, the buyer as a tax agent must charge VAT in the same manner as when purchasing scrap metal (clause 8 of Article 161 of the Tax Code). Therefore, buyers of waste paper can use the clarifications for companies purchasing scrap metal.»
Read about other changes to VAT.
What transactions are subject to VAT in 2019
Transactions subject to VAT include:
- sale on the territory of Russia of goods, works, services and collateral, including under an agreement on compensation or novation (subclause 1, clause 1, article 146 of the Tax Code of the Russian Federation);
- transfer of ownership of goods, results of work performed and provision of services free of charge (subclause 1, clause 1, article 146 of the Tax Code of the Russian Federation);
- transfer of goods, works and services for one’s own needs (subclause 2, clause 1, article 146 of the Tax Code of the Russian Federation);
- performing construction and installation work on your own for your own needs (subclause 3, clause 1, article 146 of the Tax Code of the Russian Federation).
- import of goods into the territory of Russia (subclause 4, clause 1, article 146 of the Tax Code of the Russian Federation).
Please note that organizations and entrepreneurs have the right to receive VAT exemption. As a general rule, you can take advantage of the exemption if the revenue excluding VAT from the sale of goods (work, services) for the three previous consecutive calendar months did not exceed RUB 2,000,000. (Clause 1 of Article 145 of the Tax Code). Some features have VAT exemption conditions:
Example of calculating revenue for using VAT exemption:
LLC "Trading Company "Hermes"" sells non-excisable goods. From May 1, the organization decided to take advantage of the right to exemption from VAT.
To do this, the accountant determined the revenue from the sale of goods for the period February-April. At the same time, the accountant did not include advances received from buyers in the calculation. Revenue excluding VAT for the specified period amounted to:
- from the sale of fixed assets - 50,000 rubles;
- from the sale of non-excise goods - 1,450,000 rubles.
The total amount of revenue that is taken into account when determining the right to exemption from VAT is 1,500,000 rubles. (RUB 50,000 + RUB 1,450,000). It does not exceed 2,000,000 rubles. Therefore, from May 1, Hermes can take advantage of the exemption and not pay VAT on the sale of non-excise goods and other property not subject to excise taxes (fixed assets, materials, etc.).
An organization or individual entrepreneur using a VAT exemption is required to issue invoices. In such invoices, do not highlight the VAT amount, but make a note or stamp “Without tax (VAT).” But there are exceptions >>> In addition, there are cases when such companies and entrepreneurs must submit a declaration for this tax.
What services are not subject to VAT?
To understand whether services are subject to VAT or not, determine the place of their sale. If this is the territory of Russia, then tax will have to be charged (Article 148 of the Tax Code of the Russian Federation). How to issue an invoice for services - with or without VAT - depends on whether the services are included in the list of transactions. Services not subject to VAT in 2017 are listed in paragraphs 2 and 3 of Article 149 of the Tax Code.
We list which common services are not subject to VAT in Russia:
- medical services provided by medical organizations (subclause 2, clause 2, article 149 of the Tax Code of the Russian Federation);
- services for supervision and care of children in preschool education organizations, conducting classes in clubs and sections with minor children (subclause 4, clause 2, article 149 of the Tax Code of the Russian Federation);
- repair and maintenance services for goods under warranty without charging a fee (subclause 13, clause 2, article 149 of the Tax Code of the Russian Federation);
- funeral services (subclause 8, clause 2, article 149 of the Tax Code of the Russian Federation);
- services of sanatorium-resort and health-improving organizations (subclause 18, clause 3, article 149 of the Tax Code of the Russian Federation).
Sales without VAT on a simplified basis
It is possible to conclude that sales are not subject to VAT due to the application of the simplified tax system based on the wording from the articles of the Tax Code of the Russian Federation. The simplified tax system is not subject to VAT on the basis of paragraph 2 of Article 346.11 of the Tax Code of the Russian Federation. This means that the contract under the simplified taxation system indicates prices without VAT.
You can work without VAT based on the wording of Article 346.11 of the Tax Code of the Russian Federation:
Organizations applying the simplified taxation system are not recognized as taxpayers of value added tax, with the exception of value added tax payable in accordance with this Code when importing goods into the territory of the Russian Federation and other territories under its jurisdiction (including tax amounts subject to payment upon completion of the customs procedure of the free customs zone on the territory of the Special Economic Zone in the Kaliningrad Region), as well as value added tax paid in accordance with Articles 161 and 174.1 of this Code.
The company's primary documents are also issued without VAT due to the use of a simplified taxation system.
The company used a common system in 2018. Since 2019, the company has switched to a simplified system. In 2018, the buyer made an advance payment. The company will ship the goods against the advance payment in 2019. How to deal with value added tax? VAT calculation depends on
Chapter 26.2 of the Tax Code of the Russian Federation provides for concessions for simplified companies, therefore their operations are not subject to VAT on the basis of paragraph 2 of Article 346.11.
Such companies do not issue invoices in accordance with the same paragraph from Article 346.11 of the Tax Code of the Russian Federation, even with the mark “without VAT”. An exception is when you will have to issue an invoice and transfer VAT:
- the organization is a commission agent or agent who acquires or sells goods on its own behalf, but in the interests of the principal or principal;
- the organization is a tax agent for VAT;
- the organization is a participant in a simple partnership agreement that conducts common affairs, or a trustee, and under this agreement receives advances or ships goods.
