VAT exemption: who can get it and how?

A little about the essence of VAT and deductions

Value added tax is included in the price of goods, works or services sold by the VAT payer. It is paid from the buyer’s pocket, but is part of the proceeds, so the seller must transfer it to the budget.

There is also VAT as part of the cost of goods that an individual entrepreneur purchases for his activities. At the same time, the law gives him the right to deduct this tax, that is, to reduce the amount of VAT payable to the budget by its amount. The deduction is provided only to those entities who pay VAT themselves - it is a mechanism for getting rid of double taxation.

To implement the deduction, an individual entrepreneur must keep tax records . All transactions must be accompanied by the preparation of invoices , and must also be reflected in the books of purchases and sales, the journal of issued and received invoices.

If the individual entrepreneur does not have an invoice issued by the seller, then he will not be able to deduct the tax presented as part of the price of the goods.

Basic information about VAT and its deduction:

What to do with the VAT return?

For the period during which the VAT exemption was applied, declarations are not provided.

If the exemption is applied from the first month of the quarter, then the restored VAT is included in the declaration for the last quarter preceding the application of the exemption.

If the exemption applies from the second or third month of the quarter, then the declaration for this quarter must be submitted according to the general rules. In this case, the declaration reflects only transactions for the period of the first quarter before the start of application of the exemption. Such a declaration also includes the restored VAT.

Calculation of VAT amount

Individual entrepreneurs calculate tax at the same rates as organizations. By default it is 18% , although for some product groups a rate of 10% . If the activity is related to the export of goods and services, it is subject to VAT at a rate of 0% .

It is important to understand the difference between a 0% rate and no VAT on transactions. In the first case, the entrepreneur must confirm the preferential rate with a certain set of documents. If this is not done, you will have to pay VAT at a rate of 18%.

To calculate the tax payable, the entrepreneur determines the tax base - this is the cost of all transactions, including advances, subject to VAT. The corresponding rate is applied to it - 10 or 18%. Also, an individual entrepreneur has the right to claim a tax deduction and reduce the calculated tax by its amount. What you end up with will be the amount of VAT that must be paid to the budget in the reporting period.

How to exercise the right to release?

You can start applying the exemption from the first day of any month. To do this, no later than the 20th day of the month from which the exemption applies, you must submit to the Federal Tax Service:

• Notice “On the use of the right to exemption from the taxpayer’s obligations related to the calculation and payment of VAT”;
• An extract from the balance sheet and/or profit and loss statement (of the organization) or an extract from the book of income and expenses (IP);
• Extract from the sales book.

It is also necessary to restore VAT on the residual value of fixed assets (intangible assets) and on the value of inventories that, before the application of the exemption, were not used in transactions subject to VAT.

VAT on advance payments

A special procedure exists for paying VAT on advances received . This obligation is imposed on tax payers in accordance with paragraph 1 of Article 167 of the Tax Code of the Russian Federation. The difference is that in this case you need to apply the estimated VAT rate :

• 10/110 - in relation to goods and services taxed at a rate of 10%;
• 18/110 - in relation to goods and services with a rate of 18%.

The tax base in this case is the amount of the advance received against future supplies.

When receiving an advance, as with a regular sale, the entrepreneur who pays the simplified tax system must issue an invoice . This must be done within 5 days after receiving the money in your bank account.

When the delivery takes place, VAT on the advance payment is deducted, and tax is charged on the entire sales amount. If the advance is returned, that is, the transaction does not take place, the amount of VAT will be deducted.

In connection with advances, one more situation needs to be mentioned. It happens that at the end of the year an entrepreneur received advances from buyers against future deliveries, and from the beginning of the next year he switched to the simplified tax system . The prepayment was received while the individual entrepreneur was a VAT payer; accordingly, he charged tax on it. After that, he switched to a regime that does not involve paying VAT and completed the transaction (sold the goods for which an advance was received). In this case, he will no longer be able to deduct the VAT paid on the advance payment. But he also should not charge sales tax.

Nevertheless, it is recommended to avoid such situations, that is, if you want to switch to a tax regime without VAT from next year, return advances received from them to buyers in advance.

Who can avoid paying VAT on the basis of Art. 145 Tax Code of the Russian Federation

The main condition for obtaining the exemption is that revenue for the last 3 consecutive calendar months must be less than 2 million rubles (excluding VAT).
Those. Revenue is not considered for a quarter, but rather for 3 consecutive months. For example, to receive exemption from April 1, revenue for January-March is taken, from May 1 - February-April, etc. Organizations calculate the amount of revenue according to accounting data[1] (except for organizations that have switched from the simplified tax system to the OSNO, since they do not present an extract from the balance sheet, but an extract from the book of income and expenses). Individual entrepreneurs do not have accounting records, so revenue is always determined according to the book of income and expenses.

When calculating revenue that gives the right to exemption, only revenue from transactions subject to VAT is taken into account. Those. revenue from operations specified in Article 149 of the Tax Code of the Russian Federation is not taken into account. This opinion was expressed in the Resolution of the Presidium of the Supreme Arbitration Court of November 27, 2012 N 10252/12. The Ministry of Finance and the Federal Tax Service were forced to agree with this opinion[2]. Also, when calculating revenue, income from transactions subject to UTII and/or PSN is not included. When calculating revenue, advances received are not taken into account, because they are not revenue from the sale of goods (work, services).

If an organization or individual entrepreneur does not have revenue for the last three months, then, according to the Ministry of Finance, they cannot receive an exemption from VAT taxpayer obligations.

However, judicial practice has been on the side of taxpayers for many years (Resolutions of the Federal Antimonopoly Service of the Ural District dated May 2, 2007 No. Ф09-3020/07-С2, Federal Antimonopoly Service of the Northwestern District dated September 15, 2006 No. A56-35928/2005, 17 Arbitration Court of Appeal dated May 22. 2015 N 17AP-5352/2015-AK (left unchanged by the AS of the Ural District on September 16, 2015 No. F09-6077/15). If the organization has not yet worked for three months, then it does not have the right to exemption, because the condition for revenue limit for 3 consecutive months.

If the taxpayer sells excisable goods, then the proceeds from the sale of these goods are not included in the calculation of the amount of revenue for obtaining exemption. But in order to obtain the right to use Article 145 of the Tax Code of the Russian Federation, he must keep separate records for the trade of excisable goods and his other activities. The fact is that for transactions involving the sale of excisable goods, the taxpayer does not have the right to use the VAT exemption[3].

If the individual entrepreneur is a tax agent for VAT

We mentioned above that sometimes even without being a VAT payer, an entrepreneur is obliged to pay it. In particular, when he plays the role of a tax agent. Most often this happens in the following cases:

1. When an individual entrepreneur purchases goods, work or services from a foreign person who is not registered with the Russian tax authorities.
2. When an entrepreneur carries out intermediary activities on behalf of a foreign organization and participates in settlements.
3. When the object of the transaction is state or municipal property , that is, when an entrepreneur buys or rents it.

In this case, despite the fact that the entrepreneur does not pay his own VAT, he is obliged to keep VAT records, accrue and pay taxes to the budget, and also submit reports in a timely manner.

About VAT tax agents:

How to calculate revenue?

For the purposes of calculating and controlling revenue, the following rules apply:

Rule 1. Control the amount of revenue

The right to exemption is lost from the 1st day of the month in which revenue exceeds RUB 2,000,000.

Example

applies VAT exemption from 1 May. It is necessary to control revenue for:

• May June July
• June July August
• August, September, October
• Etc.

Rule 2. Revenue is calculated according to accounting data

Rule 3. We take into account the nuances of calculation

1. Revenue is calculated without VAT;
2. Advances are not taken into account in the calculation.

Rule 4. Only revenue that is subject to VAT is included in the calculation

According to paragraphs 3 and 4 of the Resolution of the Plenum of the Supreme Arbitration Court dated May 30, 2014 No. 33, receipts from transactions not subject to VAT are not taken into account in revenue.

The following receipts are not subject to VAT:

• From activities in respect of which UTII or PSN is applied;
• From transactions that are exempt from VAT on the basis of Article 149 of the Tax Code of the Russian Federation;
• From transactions that are not recognized as subject to VAT on the basis of Article 146 of the Tax Code of the Russian Federation;
• From the sale of goods (works, services), the place of sale of which is not recognized as the territory of the Russian Federation.

VAT for an entrepreneur using “simplified”

Taxpayers under the simplified tax system are exempt from paying VAT. But sometimes, due to ignorance or by meeting the counterparty halfway, such entities can issue invoices and allocate the amount of tax in them. In this case, the tax will be payable even though the individual entrepreneur is not the payer.

In addition, there are other cases when an individual entrepreneur using the simplified tax system is required to pay VAT:

1. If he works under a commission agreement , guarantee or other intermediary agreement.
2. If he entered into a simple partnership , entered into a trust management agreement.

Moreover, the mentioned legal relations arise only if the entrepreneur, as an object of taxation under the simplified tax system, uses income reduced by the amount of expenses.

An individual entrepreneur using the simplified tax system who pays VAT in connection with agency activities is not considered a payer of this tax. Nevertheless, he is obliged to take into account incoming and outgoing invoices, as well as submit reports to the Federal Tax Service. However, he does not receive the right to deduct input tax.

Can an individual entrepreneur enter into transactions with an LLC in which he is also the founder?

Maybe, but there are nuances. If the same person established an individual entrepreneur and an LLC, then these are interdependent persons. For the tax authorities, this means that they can enter into a sham transaction, underestimate or inflate the price in order to save on tax or withdraw money from the LLC.

Therefore, the tax office will be more attentive to such agreements: it may check the documents to make sure that the transaction really took place, or compare the price with the market average. If he proves that the terms of the transaction led to an underpayment of tax, he will charge additional taxes.

Reporting

Starting from 2015, you can submit your VAT return exclusively in electronic form . This applies to both organizations and individual entrepreneurs. You can submit a declaration through the program for interaction with the Federal Tax Service. A report for each quarter is submitted no later than the 25th of the following month.

You should not neglect this responsibility, since the Tax Code provides for fines for this. Moreover, if the declaration is not received by the tax authority within 10 days after the deadline, the entrepreneur’s account may be blocked.

About penalties for failure to submit a declaration:

Which individual entrepreneurs pay taxes on payments to employees?

If an individual entrepreneur attracts employees, then insurance premiums and personal income tax must be calculated and transferred to the budget from the remuneration paid for work.

For income tax, the individual entrepreneur performs the duties of a tax agent. He is obliged to calculate the tax payable at the appropriate rate (for resident employees it is 13%), withhold it and transfer it to the budget.

Insurance premiums for compulsory health insurance, VNiM and compulsory medical insurance are calculated in accordance with Chapter 34 of the Tax Code of the Russian Federation.

Also, the employer is obliged to transfer insurance premiums for injuries from employees' wages. They are calculated in accordance with Law 125-FZ of July 24, 1998. The contribution rate for injuries varies from 0.2 to 8.5% depending on the professional insurance class of the type of activity performed.

When attracting employees, the individual entrepreneur has an obligation to submit appropriate reports.

Individual entrepreneur, general taxation system, employee reporting:

How to prepare documents if the counterparty is in another city?

All documents, except the invoice, are signed by both parties to the transaction. Without a signature, the document is invalid - it is considered that there were no agreements between you and the counterparty.

Many work with clients and suppliers from other cities. Going there to sign an agreement or act is a pointless waste of time and money. There are other options.

By registered mail. Send two signed copies to your partner. Get one back with his signature. This way, each of you will have a document with two signatures.

Through a service for electronic document management. Buy an electronic signature and send documents online. It's cheaper and faster than sending paper letters.

Some simply exchange documents via email. We do not recommend doing this - in case of disputes, it will be difficult to prove to the court that it was you who sent the documents.

Is it necessary for an individual entrepreneur to have a current account?

No, but it's easier to do business with. Here are some reasons:

— Many companies do not work with cash and pay only by bank transfer to the account.

— Buyers are used to paying by card and do not take cash with them. To accept card payments in a store or on the website, you need an account.

— It’s also convenient to pay suppliers and the state from your account. You connect to online banking and transfer money without leaving the office.

— For cash payments there is a limit - a maximum of 100 thousand rubles per agreement. Therefore, in large transactions it is impossible to do without an account.