Article 264. Other expenses associated with production and (or) sales

Article 264. Other expenses associated with production and (or) sales

. Other expenses associated with production and sales include the following taxpayer expenses:

• 1) the amount of taxes and fees, customs duties and fees, insurance contributions for compulsory pension insurance, compulsory social insurance in case of temporary disability and in connection with maternity, compulsory medical insurance, accrued in the manner established by this Code, with the exception of those listed in Article 270 of this Code;
• 2) costs for certification of products and services, as well as for declaration of conformity with the participation of a third party;
• 2.1) costs of standardization, taking into account the provisions of paragraph 5 of this article;
• 3) the amount of commission fees and other similar expenses for work performed by third parties (services provided);
• 4) the amount of port and airfield dues, costs for pilot services and other similar expenses;
• 5) the amount of paid allowances within the limits established in accordance with the legislation of the Russian Federation;
• 6) expenses for ensuring fire safety of the taxpayer in accordance with the legislation of the Russian Federation, expenses for maintaining a gas rescue service, expenses for property security services, maintenance of fire alarm systems, expenses for the purchase of fire protection services and other security services, including services provided by private security in accordance with the legislation of the Russian Federation, as well as the costs of maintaining its own security service to perform the functions of economic protection of banking and business transactions and the safety of material assets (with the exception of costs of equipment, the purchase of weapons and other special means of protection);
• 7) expenses for ensuring normal working conditions and safety measures provided for by the legislation of the Russian Federation, expenses for civil defense in accordance with the legislation of the Russian Federation, as well as expenses for the treatment of occupational diseases of workers employed in work with harmful or difficult working conditions, expenses related to the maintenance of premises and equipment of health centers located directly on the territory of the organization;
• expenses for recruiting employees, including expenses for the services of specialized personnel selection organizations;
• 9) expenses for the provision of warranty repair and maintenance services, including contributions to the reserve for future expenses for warranty repairs and warranty service (taking into account the provisions of Article 267 of this Code);
• 10) rental (leasing) payments for rented (leasing) property (including land plots), as well as expenses for the acquisition of property leased. If the property received under a leasing agreement is taken into account by the lessee, the following expenses are recognized in accordance with this subclause:
• for the lessee - rental (leasing) payments minus the amount of depreciation on this property accrued in accordance with Articles 259 - 259.2 of this Code;
• for the lessor - expenses for the acquisition of property leased;

• travel of the employee to the place of business trip and back to the place of permanent work;
• rental of residential premises. This item of expenses also covers the employee's expenses for additional services provided in hotels (with the exception of expenses for service in bars and restaurants, expenses for room service, expenses for the use of recreational and health facilities);
• daily allowance or field allowance;
• registration and issuance of visas, passports, vouchers, invitations and other similar documents;
• consular, airfield fees, fees for the right of entry, passage, transit of automobile and other transport, for the use of sea canals, other similar structures and other similar payments and fees;

The goals of social protection of disabled people in accordance with the legislation of the Russian Federation on social protection of disabled people are recognized as follows:

• improving the working conditions and safety of disabled people;
• creation and preservation of jobs for people with disabilities (purchase and installation of equipment, including organizing the work of homeworkers);
• training (including new professions and work methods) and employment of people with disabilities;
• production and repair of prosthetic products;
• acquisition and maintenance of technical rehabilitation equipment (including the acquisition of guide dogs);
• sanatorium and resort services for disabled people, as well as persons accompanying group I disabled people and disabled children;
• protection of the rights and legitimate interests of people with disabilities;
• activities for the integration of disabled people into society (including cultural, sports and other similar events);
• providing disabled people with equal opportunities as other citizens (including transport services for persons accompanying group I disabled people and disabled children);
• acquisition and distribution of printed publications of public organizations of disabled people among disabled people;
• acquisition and distribution of video materials with subtitles or sign language translation among disabled people;
• contributions sent by these organizations to public organizations of disabled people for their maintenance.

When determining the total number of disabled people, the average number of employees does not include disabled people working part-time, contracting and other civil contracts;

39) expenses of taxpayers - public organizations of disabled people, as well as taxpayers-institutions, the sole owners of whose property are public organizations of disabled people, in the form of funds aimed at carrying out the activities of these public organizations of disabled people and for the purposes specified in subparagraph 38 of this paragraph.

Recipients of funds intended for the implementation of the activities of a public organization of disabled people and for the purpose of social protection of disabled people, at the end of the tax period, submit a report on the intended use of the funds received to the relevant tax authorities at the place of their registration.

In case of misuse of such funds from the moment when their recipient actually used such funds for other purposes (violated the terms of provision of these funds), such funds are recognized as income by the taxpayer who received these funds.

The expenses specified in subclause 38 of this clause and this subclause cannot be included in the costs associated with the production and (or) sale of excisable goods, mineral raw materials, other minerals and other goods according to the list determined by the Government of the Russian Federation in agreement with all-Russian organizations of disabled people, as well as the provision of intermediary services related to the sale of such goods, mineral raw materials and minerals;

39.1) expenses of taxpayers-organizations, the authorized (share) capital of which consists entirely of the contribution of religious organizations, in the form of amounts of profit received from the sale of religious literature and religious items, subject to the transfer of these amounts for the implementation of the statutory activities of these religious organizations;

39.2) expenses for the formation, in the manner established by Article 267.1 of this Code, of reserves for future expenses for the purpose of social protection of disabled people, provided for in subclause 38 of this clause, which are carried out by a taxpayer - a public organization of disabled people, as well as by a taxpayer - an organization employing the labor of disabled people, if from the total of the number of employees of such a taxpayer, disabled people make up at least 50 percent and the share of expenses for remuneration of disabled people in labor costs is at least 25 percent;

39.3) expenses for the formation, in the manner established by Article 267.2 of this Code, of reserves for upcoming expenses for scientific research and (or) development;

40) payments for registration of rights to real estate and land, transactions with these objects, payments for providing information about registered rights, payment for services of authorized bodies and specialized organizations for property assessment, production of cadastral and technical registration (inventory) documents of real estate;

41) expenses under civil law contracts (including work contracts) concluded with individual entrepreneurs who are not on the staff of the organization;

42) expenses of taxpayers - agricultural organizations for food for workers engaged in agricultural work;

43) costs for replacing defective, lost marketable during transportation and (or) sale and missing copies of periodicals in packages, but not more than 7 percent of the cost of circulation of the corresponding issue of the periodical;

44) losses in the form of the cost of defective, out-of-marketable, and also not sold within the time limits specified in this subparagraph (obsolete) media and book products, written off by taxpayers engaged in the production and release of media and book products , within no more than 10 percent of the cost of circulation of the corresponding issue of a periodical printed publication or the corresponding circulation of book products, as well as the costs of write-off and disposal of defective, out-of-marketable and unsold media products and book products.

An expense is the cost of mass media products and book products not sold within the following periods:

• for periodicals - within the period before the publication of the next issue of the relevant periodical;
• for books and other non-periodical printed publications - within 24 months after their publication;
• for calendars (regardless of their type) - until April 1 of the year to which they relate;
• 45) contributions for compulsory social insurance against industrial accidents and occupational diseases, made in accordance with the legislation of the Russian Federation;
• 46) contributions from taxpayers made to support the supervisory activities of specialized institutions provided for by the legislation of the Russian Federation in order to monitor compliance by such taxpayers with relevant requirements and conditions, as well as contributions from taxpayers to reserves created in accordance with the legislation of the Russian Federation regulating activities in the field of communications;
• 47) losses from marriage;
• 48) expenses associated with the maintenance of premises of public catering facilities serving labor collectives (including amounts of accrued depreciation, expenses for repairs of premises, expenses for lighting, heating, water supply, electricity, as well as fuel for cooking), if such expenses are not are taken into account in accordance with Article 275.1 of this Code;
• 48.1) the employer’s expenses for payment in accordance with the legislation of the Russian Federation of temporary disability benefits (except for industrial accidents and occupational diseases) for days of temporary disability of the employee, which are paid at the expense of the employer and the number of which is established by the Federal Law of December 29, 2006 N 255-FZ “On compulsory social insurance in case of temporary disability and in connection with maternity”, in the part not covered by insurance payments made to employees by insurance organizations that have licenses issued in accordance with the legislation of the Russian Federation to carry out the relevant type of activity, according to agreements with employers in favor of employees in the event of their temporary disability (with the exception of industrial accidents and occupational diseases) for days of temporary disability, which are paid at the expense of the employer and the number of which is established by Federal Law of December 29, 2006 N 255-FZ “On compulsory social insurance in case of temporary disability and in connection with maternity”;
• 48.2) payments (contributions) of employers under voluntary personal insurance contracts concluded with insurance organizations that have licenses issued in accordance with the legislation of the Russian Federation to carry out the relevant type of activity, in favor of employees in the event of their temporary disability (except for industrial accidents and occupational diseases) for days of temporary disability, which are paid at the expense of the employer and the number of which is established by Federal Law of December 29, 2006 N 255-FZ “On compulsory social insurance in case of temporary disability and in connection with maternity.” The specified payments (contributions) are included in expenses if the amount of insurance payment under such contracts does not exceed the amount of temporary disability benefits determined in accordance with the legislation of the Russian Federation (except for industrial accidents and occupational diseases) for days of temporary disability of the employee that are paid at the expense of the employer and the number of which is established by Federal Law of December 29, 2006 N 255-FZ “On compulsory social insurance in case of temporary disability and in connection with maternity.” In this case, the total amount of these payments (contributions) of employers and contributions specified in paragraph ten of paragraph 16 of part two of Article 255 of this Code is included in expenses in an amount not exceeding 3 percent of the amount of labor costs;
• 48.3) expenses of taxpayers associated with the gratuitous provision of air time and (or) print space in accordance with the legislation of the Russian Federation on elections and referendums;
• 48.4) expenses of taxpayers associated with the gratuitous provision of services for the production and (or) distribution of social advertising in accordance with the legislation of the Russian Federation on advertising. The expenses specified in this subparagraph are recognized for tax purposes, subject to compliance with the requirements for social advertising established by subparagraph 32 of paragraph 3 of Article 149 of this Code;
• 48.5) expenses of the taxpayer, in whose favor the right to use a subsoil plot is transferred in accordance with the procedure established by the legislation of the Russian Federation, in the form of compensation for expenses for the development of natural resources previously incurred by the previous owner of the license to use this subsoil plot for the purpose of its acquisition, in the amount of the actual costs of the taxpayer;
• 48.6) the amount of entrance and guarantee contributions of non-state pension funds, guarantee contributions of the Pension Fund of the Russian Federation paid to the fund for guaranteeing pension savings in accordance with Federal Law of December 28, 2013 N 422-FZ “On guaranteeing the rights of insured persons in the compulsory pension insurance system of the Russian Federation” Federation in the formation and investment of pension savings, establishing and making payments from pension savings”;
• 48.7) expenses associated with the provision of property (work, services) free of charge to state authorities or local governments, state and municipal institutions, state and municipal unitary enterprises in cases where this obligation of the taxpayer is established by the legislation of the Russian Federation;
• 48.8) expenses for payment of services of clearing organizations related to the issuance, servicing of circulation and redemption of clearing participation certificates;
• 48.9) funds transferred to the budget of a constituent entity of the Russian Federation on the basis of agreements (contracts) on gratuitous targeted contributions concluded in accordance with the legislation of the Russian Federation on the electric power industry;
• 48.10) expenses of a unitary non-profit organization created for the purpose of implementing the housing renovation program in the city of Moscow in accordance with Article 7.7 of the Law of the Russian Federation of April 15, 1993 N 4802-1 “On the status of the capital of the Russian Federation”, for the acquisition (creation) of real estate property as part of the implementation of the housing renovation program in the city of Moscow, with the exception of expenses incurred as part of targeted financing and targeted revenues in accordance with subparagraph 14 of paragraph 1 and paragraph 2 of Article 251 of this Code. The specified expenses are recognized for tax purposes on the date of transfer of real estate assets owned by the specified organization to the city of Moscow in connection with the implementation of the housing renovation program in the city of Moscow;
• 49) other expenses associated with production and (or) sales.

. Representation expenses include the taxpayer's expenses for the official reception and (or) servicing of representatives of other organizations participating in negotiations in order to establish and (or) maintain mutual cooperation, as well as participants who arrived at meetings of the board of directors (board) or other governing body of the taxpayer, regardless of the location of these events. Entertainment expenses include expenses for an official reception (breakfast, lunch or other similar event) for these persons, as well as officials of the taxpayer organization participating in the negotiations, transportation support for the delivery of these persons to the place of the entertainment event and (or) meeting of the management authority and back, buffet service during negotiations, payment for the services of translators who are not on the taxpayer’s staff to provide translation during entertainment events.

Entertainment expenses do not include expenses for organizing entertainment, recreation, prevention or treatment of diseases.

Representation expenses during the reporting (tax) period are included in other expenses in an amount not exceeding 4 percent of the taxpayer's expenses for wages for this reporting (tax) period.

. The taxpayer's expenses for training in basic professional educational programs, basic vocational training programs and additional professional programs, passing an independent assessment of qualifications for compliance with the qualification requirements of the taxpayer's employees are included in other expenses if:

• 1) training in basic professional educational programs, basic vocational training programs and additional professional programs is carried out on the basis of an agreement with a Russian educational organization, scientific organization or foreign educational organization that has the right to conduct educational activities, undergo an independent assessment of qualifications for compliance with the requirements for the qualifications of an employee the taxpayer is carried out on the basis of a contract for the provision of services for conducting an independent assessment of qualifications for compliance with qualification requirements in accordance with the legislation of the Russian Federation;
• 2) training in basic professional educational programs, basic vocational training programs and additional professional programs is carried out by employees of the taxpayer who have entered into employment contracts with the taxpayer, or by individuals who have entered into agreements with the taxpayer providing for the obligation of the individual no later than three months after the completion of the specified training, paid taxpayer, enter into an employment contract with him and work for the taxpayer for at least one year; employees of the taxpayer who have concluded an employment contract with him undergo an independent assessment of their qualifications for compliance with qualification requirements in accordance with the legislation of the Russian Federation.

If the employment contract between the specified individual and the taxpayer was terminated before the expiration of one year from the date of its commencement, with the exception of cases of termination of the employment contract due to circumstances beyond the control of the parties (Article 83 of the Labor Code of the Russian Federation), the taxpayer is obliged to include in non-operating income of the reporting (tax) period in which this employment contract terminated, the amount of payment for the specified training of the relevant individual, previously taken into account when calculating the tax base. If the employment contract of an individual with the taxpayer was not concluded three months after the end of the training paid for by the taxpayer, these expenses are also included in non-operating income of the reporting (tax) period in which this period for concluding the employment contract expired.

The taxpayer is obliged to keep documents confirming training expenses for the entire duration of the relevant training contract and one year of work of the individual whose training was paid for by the taxpayer in accordance with the employment contract concluded with the taxpayer, but not less than four years.

The taxpayer is required to keep documents confirming the costs of an employee undergoing an independent qualification assessment for compliance with qualification requirements, for the entire duration of the contract for the provision of services for conducting an independent qualification assessment for compliance with qualification requirements and one year of work of an individual, undergoing an independent qualification assessment for compliance the qualification requirements of which were paid by the taxpayer in accordance with the employment contract concluded with the taxpayer, but for at least four years.

Training expenses also include taxpayer expenses incurred on the basis of agreements on the network form of implementation of educational programs, concluded in accordance with Federal Law of December 29, 2012 N 273-FZ “On Education in the Russian Federation” with educational organizations, in particular expenses for maintenance of the premises and equipment of the taxpayer used for training, wages, the cost of property transferred to ensure the training process, and other expenses within the framework of these agreements. Such expenses are recognized in the tax period in which they were incurred, provided that in a given tax period at least one of the students who graduated from the specified educational organizations entered into an employment contract with the taxpayer for a period of at least one year.

Expenses related to the organization of entertainment, recreation or treatment are not recognized as expenses for training the taxpayer's employees or individuals provided for by this paragraph.

. An organization's advertising expenses for the purposes of this chapter include:

• expenses for advertising events through the media (including advertisements in print, broadcast on radio and television), information and telecommunication networks, for film and video services;
• expenses for illuminated and other outdoor advertising, including the production of advertising stands and billboards;
• expenses for participation in exhibitions, fairs, expositions, for the design of shop windows, sales exhibitions, sample rooms and showrooms, production of advertising brochures and catalogs containing information about goods sold, work performed, services provided, trademarks and service marks, and ( or) about the organization itself, for the discounting of goods that have completely or partially lost their original qualities during exhibition.

The taxpayer's expenses for the acquisition (production) of prizes awarded to the winners of drawings of such prizes during mass advertising campaigns, as well as expenses for other types of advertising not specified in paragraphs two - four of this paragraph, carried out by him during the reporting (tax) period, for for tax purposes are recognized in an amount not exceeding 1 percent of sales proceeds, determined in accordance with Article 249 of this Code.

. Costs for standardization are the costs of carrying out work on the development of national standards included in the program for the development of national standards, approved by the national body of the Russian Federation for standardization, as well as the costs of carrying out work on the development of regional standards, subject to the approval of the standards as national standards by the national body of the Russian Federation. Federation for Standardization, registration of regional standards in the Federal Information Fund of Technical Regulations and Standards in the manner established by the legislation of the Russian Federation on technical regulation.

Expenses for standardization do not include expenses for work on the development of national and regional standards by organizations developing them as a performer (contractor or subcontractor).

What is included in hospitality expenses

From the definitions in the Tax Code of the Russian Federation and established business practice, it is possible to detail what is considered entertainment expenses. This:

• holding an official event (breakfasts, lunches and dinners or other similar receptions) for representatives and participants;
• ensuring the transportation of representatives and/or participants to the official reception, the council of the governing body and back;
• transport services for representatives and participants;
• restaurant service during a representative event;
• expenses for translators who are not employees of the taxpayer - for translation during a meeting and/or official reception.

The letter of the Federal Tax Service of Russia dated April 18, 2007 N04-1-02/306 states that the list of entertainment expenses is closed and is not subject to .

Holding a round table

The legality of accounting for the costs of holding a round table for tax purposes of an organization’s profit also needs to be assessed taking into account the specific features of the situation. For example, a presenter at a corporate event is definitely not representative. And the host of a business round table - why not?

To take into account all costs, we recommend preparing an estimate . Calculate the costs and approve their size by order of the manager. Costs may include:

• rental of premises;
• buffet service (catering);
• food and beverage expenses;
• payment for the services of the presenter;
• drawing up a program;
• expenses for transportation services for representatives and participants;
• expenses for guest accommodation, etc.

In our opinion, it is possible to recognize the costs of holding a round table as representative expenses by completing the documentation and taking into account the provisions of paragraph 1 of Art. 264 Tax Code of the Russian Federation.

Moreover, the Russian Ministry of Finance advises the taxpayer independently determine what type of expenses these or those are (letter dated October 16, 2012 No. 03-03-06/1/551).

Team building expenses

At the beginning of our publication it is said that expenses for team building are not a representative event. Let us explain why.

No matter how the taxpayer tries to justify the need for these measures (some companies even provide statistics and graphs for improving performance, which are quite reasonable), this is still not a business event. This means that these are not entertainment expenses.

For the purpose of calculating income tax, you can accept these expenses as expenses as part of other expenses, provided that they are economically justified, documented and related to production and/or sales. Although this position was not supported by some courts.

EXAMPLE

In the decisions of the Federal Antimonopoly Service of the West Siberian District dated November 19, 2013 No. A67-7663/2012, the Federal Antimonopoly Service of the Northwestern District dated December 11, 2008 No. A56-3342/2008, the judges decided that the costs of training were not aimed at generating income. That is, they do not meet the criteria of economic feasibility.

I would also like to note why expenses for the services of artists are not entertainment expenses. Because this is, first of all, the entertainment part of the program. One can hardly imagine a business meeting with a singer performing. Again, if this is not a singing master class at the Philharmonic. Here then we can argue.

What cannot be considered entertainment expenses

The following cannot be disguised as entertainment events:

• expenses for holding anniversaries of a company or individual entrepreneur;
• excursions and other similar entertainment;
• organization of recreation or team building;
• carrying out medical examination or preventing the spread of diseases or viruses;
• expenses for the purchase of souvenirs and memorable gifts;
• costs for obtaining visas for foreign partners;
• expenses for decorating premises for an official reception, purchasing flowers and decorations.

However, in a specific situation - if there is confidence in the need for such costs to carry out the event - one can argue .

EXAMPLE 1

As a general rule, expenses for artists who helped carry out the presentation cannot be included as entertainment expenses. But in certain cases, the court may side with the taxpayer. How did the court of the Far Eastern District do it (FAS resolution No. F03-6135/2011 dated December 12, 2011). He overturned the rulings of the lower courts that the expenses for the artists participating in the presentation were not representative, and remanded the case for a new trial.

EXAMPLE 2

The costs of decorating premises for an official reception are also not officially classified as representative expenses. For example, the Ministry of Finance of Russia, in a letter dated March 25, 2010 No. 03-03-06/1/176, expressed the opinion that the costs of decorating the hall, clause 2 of Art. 264 of the Tax Code of the Russian Federation are not provided for. Therefore, they cannot be taken into account as entertainment expenses for tax purposes. However, if you accept such expenses when calculating tax, then the legality can be proven in court. Thus, the Moscow Court sided with the taxpayer and recognized that the costs of purchasing bouquets of fresh flowers and flower arrangements for official receptions are representative expenses (Resolution of the Federal Antimonopoly Service of the Moscow District dated September 3, 2010 No. KA-A40/10128-10).

Restrictions on accepting entertainment expenses

When classifying expenses as entertainment expenses, you should take into account the so-called limit, or restriction - 4%. The fact is that, in accordance with current legislation, entertainment expenses are included in other expenses in an amount not exceeding 4% of the annual wage fund.

The amount of expenses accepted to reduce profit should not exceed the maximum amounts according to the standards established by the Tax Code of the Russian Federation.

Thus, expenses - even if they are incurred in connection with the entertainment event, but in the amount of the above limit of 4% - do not qualify as entertainment expenses.

Next, we will analyze the answers to the most frequently asked questions on the topic of what are hospitality expenses of an organization.

Expenses for the forum

Can the expenses for organizing forums be considered representative expenses?

On the one hand, this is not an entertainment event. This means that the main condition for acceptance as a representative has been met . Thus, in the resolution of the Federal Antimonopoly Service of the North Caucasus District dated October 15, 2007 in case No. A63-2652/2007-C4, it was decided that the tax inspectorate has not proven that the forum is an entertainment or recreational event.

We recommend keeping supporting documents for the inspection authorities that contain information about the expenses themselves and confirm their direct connection with the entertainment event. As well as documents confirming the business nature of the meeting.

For example, the Ministry of Finance of Russia provides the following possible list of documents (letter dated November 1, 2010 No. 03-03-06/1/675):

• an order or instruction from the manager to pay expenses for a representative event;

• estimate of entertainment expenses;

• primary documents (invoices, online receipts, invoices, certificates of services or work rendered);

• a report on the representative event: it better reflects the purpose of the event (in this case, the forum), the results of its implementation, the amount of expenses and other necessary information.

These documents must contain information :

1. About the date and location of the event.
2. Event program.
3. Composition of representatives and participants.
4. The amount of expenses for carrying out.

At the same time, the costs of the buffet for the forum participants are economically justified and are determined by business customs. They can be accepted as entertainment expenses within the established limit.