Art. 171, 172 of the Tax Code are devoted to VAT deductions. They recognize the reduction in the amount of tax calculated on taxable operations by the amount of the obligatory payment made by suppliers or deducted by an economic entity for other reasons. The norms contain not only the definition of deductions, but also the rules for their application. In Art. 171, 172 of the Tax Code of the Russian Federation (with comments), the conditions are established under which the economic entity can count on a reduction in tax amounts. In the article we consider the main provisions of the norms, the procedure for exercising the right to deduction, as well as the innovations in force since 2015
General information
In paragraph 1 of Art. 172 of the Tax Code of the Russian Federation, the grounds for the deduction are determined. Tax reduction is carried out on the basis of information received from invoices issued by sellers / suppliers when the payer purchased services, products, property rights, works. It is also carried out in accordance with documents certifying the fact of VAT deduction when importing goods into Russia or into other territories under its jurisdiction, payment of the amounts withheld by agents. Deductions may also be made in accordance with other securities in the cases established by clauses 6–8 and 3 of Article 171.
Terms
In accordance with paragraph 1 of Art. 172 of the Tax Code of the Russian Federation, deductions apply exclusively to the amounts presented to the payer when acquiring works, products, property rights, services in Russia or actually deducted by him when importing goods into the territory of the country or other areas within its jurisdiction after the acceptance of these objects for accounting and in the presence of primary documentation. The tax reduction when purchasing OS, intangible assets or equipment for installation is carried out in full. This refers to the facilities referred to in paragraphs two and four of Article 171. Deductions are made after they are accepted for accounting. In the case of the acquisition of services, products, property rights or work for foreign currency, the amount is recalculated in accordance with the Central Bank exchange rate effective on the date of capitalization. Differences in the tax amount that are formed by the acquirer upon further payment are taken into account in non-operating income according to the rules provided for in Art. 250, or income under Art. 265 of the Code.
The timing
They are established by paragraph 1.1 of Art. 172 of the Tax Code. In accordance with the provisions of the norm, deductions can be declared in reporting periods within three years from the date of capitalization of the objects acquired by the payer in Russia or imported into its territory, as well as to other areas that are under its jurisdiction. In paragraph 1.1 of Art. 172 of the Tax Code also established a special rule. The buyer can receive invoices after the end of the time period in which property rights, products, services or work were registered, but before the deadline for the presentation of the declaration provided for in article 174. In this case, according to paragraph 1.1 of Art. 172 of the Tax Code of the Russian Federation, a subject can take a deductible amount from the period in which the objects were capitalized.
Deductions of sales operations
The rules for their application are established by paragraph 3 of Art. 172 of the Tax Code. In this case, we are talking about operations specified in Article 164 (paragraph one) of the Code. Deductions in respect of them are carried out at the time of calculation of the tax base, provided for by Art. 167. Reductions in the amounts referred to in paragraph 10 of Article 171 are made on the date that corresponds to the day of the subsequent tax calculation at a rate of 0%. A prerequisite in this case is the availability at the specified time of documents, the list of which is determined by 165 articles.
Additional Rules
The deductions indicated in clause 5 171 of the article are carried out in full after reflection of the corresponding corrective operations in accounting when returning the goods or refusing work, products, services. Tax reduction should be carried out no later than 1 year from the date of termination of the contract. The deductions provided for in para. Clauses 1 and 2 of clause six 171 of the article are made according to the rules defined by clause 1 of the considered norm, and those indicated in the third paragraph - at the time of calculation of the base, provided for by Art. 167 (p. 10). In the latter case, if during the reorganization the enterprise did not manage to accept a decrease in the amount, the successor organization does this as the tax is deducted to the budget calculated by the enterprise during construction and installation activities for its own needs under article 173.
P. 6, Art. 172 of the Tax Code
Reduction of amounts is allowed to be made from the date of shipment of products, works or services, rights. The deduction of tax is permitted in the cases established by clause 8 171 of the article. The deduction is carried out in the amount of deductions calculated from the cost of certain services provided, work performed, rights transferred or goods shipped. According to paragraph 6 of Art. 172 of the Tax Code of the Russian Federation, advances received earlier must be counted in their payment if such conditions are established in the contract.
Deduction of difference amount
It is carried out in accordance with corrective invoices that are issued by sellers in the manner provided for in clauses 5.2 and 6 of article 169. In this case, an agreement or other document is required that certifies the fact of notification or the consent of the purchaser to change the price of shipped products, work performed, provided services or rights transferred. The reduction of amounts can be carried out no later than three years from the date of issuance of the adjustment invoice.
Art. 172 of the Tax Code of the Russian Federation (with comments)
In accordance with the rule under review, tax deductions from the acquirer appear in two cases. The first is the transfer of the advance. According to paragraph 12 of Article 171, the amounts claimed by the seller are subject to reduction. According to the norm of 168, he draws up invoices within 5 days (calendar) from the date of receipt of the advance payment. The bets used are 18/118 or 10/110. To qualify for a deduction in accordance with Art. 172 of the Tax Code, the subject must have a certain list of documents. These include:
- Properly issued invoices.
- Money orders. These documents confirm the fact of payment.
- An agreement in which conditions are stipulated that payments will be made in advance.
If at least one condition is not met, the payer cannot count on deductions.
Amount Recovery
After the transfer of goods to the buyer and posting in accordance with Art. 170, reimbursed prior deductions should be paid to the budget. Recovery of tax amounts from advance payment is carried out by the acquirer in the period in which they are deductible. It is also made in the time period in which the termination or amendment of the terms of the agreement took place and the payment received for subsequent deliveries was returned. Recovery is carried out in the amount previously accepted for deduction on the date of advance payment.
Posting
Use tax deduction under Art. 172 of the Tax Code of the Russian Federation is possible for those services, products, rights or works that were acquired for resale or for transactions subject to VAT. However, the fulfillment of the latter condition is not enough in practice. In accordance with paragraph one and having lost clause 2 of Art. 172 of the Tax Code, to obtain a deduction, it is necessary to comply with a number of requirements. Let's consider them in detail.
Proof of VAT
Supporting documents may be a contract or other acts, in accordance with which the amount of tax is subject to deduction. Depending on the specifics of delivery, different conditions for using the deduction are distinguished. If the objects were purchased in Russia for cash, the tax amount is reduced if they are presented to the payer. This option is considered the most common. Confirmation of the fact of presenting VAT is carried out by many documents. These include invoices, acts of reconciliation / acceptance, and so on. If the products were imported into Russia in the customs regime, then confirmation can be provided only when VAT has been paid when moving the goods. In this case, the fact of deduction for the reimbursement of tax amounts does not matter. This rule is valid for customs regimes of temporary import, domestic consumption, processing outside the control zones.
Invoice
Its presence is a prerequisite for deduction under Art. 172 of the Tax Code, unless otherwise provided by law. For example, no invoice is required when agents withhold tax. It should be noted here that in accordance with the letter of the Federal Tax Service dated 10.21.2013, a universal transfer document was issued. Its form can be used by economic entities to formalize the most common operations of economic life. These include, but not limited to, the acceptance of services. The use of UPD is recommended, but not required. Failure to use this form cannot constitute a ground for refusing tax accounting of transactions for tax purposes.
The implementation of certain activities
To exercise the right under Art. 172 of the Tax Code of the Russian Federation, an enterprise must carry out operations on:
- The manufacture of products, the provision of services or the performance of work, upon the implementation of which the entity has an obligation to charge VAT. This, in particular, is about both gratuitous operations and those performed for a fee.
- The transfer of goods in Russia, the performance of work, the provision of services for their needs, the costs of which are not deductible when calculating income taxes, including through depreciation amounts.
- Resale of purchased products subject to taxation.
Mandatory Acceptance
Acquired products, services, works must be capitalized with the execution of primary documents. According to Art. 172 of the Tax Code, therefore, the deduction is made from the amounts of VAT that are presented or actually paid when importing goods into the territory of Russia, after its posting in the presence of the relevant securities. At the same time, tax reductions set by sellers to an economic entity when acquiring fixed assets, equipment for installation including as well as intangible assets or deducted when moving objects across the border are carried out in full after they are taken into account. The right to take advantage of the deductions arises subject to all the above four requirements.
Innovation
Art. 172 was supplemented by paragraph 1.1. It entered into force on 01.01.2015. In accordance with the new regulation, the tax deductions established in paragraph 2 of Art. 171 may be filed with the control authorities within three years after the work, products, services, property rights acquired by the payer in Russia or imported into its territory or into areas under the jurisdiction of the state are registered. Attention should be paid to the additional feature introduced by law. In particular, if the buyer received an invoice from the seller after the end of the tax period in which the objects were capitalized, but before the deadline for the declaration established by art. 174, the acquirer is entitled to deduct tax amounts from the time period in which products, services, property rights or work were taken into account.
Conclusion
Quite often, economic entities enjoy the right to a tax deduction. However, to prevent problems that may arise during its implementation, it is necessary to carefully study the legislation. In this case, it is necessary to take into account the innovations that have come into force since 2015. Business entities, among other things, must comply with the conditions and requirements set forth by the norms. This also applies to the preparation of primary documentation, and the provision of supporting documents. It is also important to comply with the deadlines for the application of deductible amounts. All these nuances must be taken into account by accountants of both sellers and buyers. The main explanations on the application of the established rules are given in the letters of the Federal Tax Service.