What are direct and indirect costs
Every company incurs costs in the course of its activities.
According to Art. 318 of the Tax Code of the Russian Federation, for tax purposes, the taxpayer must indicate in the accounting policy the algorithm for dividing expenses into direct and indirect. Direct costs are included directly in cost, but are recognized only as the product, good or service is sold. And indirect expenses can be taken into account immediately in full in the company’s expenses during the period of their implementation (clause 2 of Article 318 of the Tax Code of the Russian Federation).
All companies must allocate expenses by type, but there are 2 exceptions:
- organizations that are allowed to use the cash method in accounting do not separate out direct and indirect expenses, since they recognize all expenses as they are paid (clause 1 of Article 318, Article 273 of the Tax Code of the Russian Federation);
- firms operating in the service sector have the right to take into account all costs during the period of their implementation (clause 2 of Article 318 of the Tax Code of the Russian Federation, letter of the Ministry of Finance of Russia dated June 15, 2011 No. 03-03-06/1/348).
Read more about the difference between the cash method and the accrual method in the article “Accrual method and cash method: main differences” .
Art. 318 of the Tax Code of the Russian Federation contains a list of direct expenses of the company:
- material costs;
- labor costs and accrued payments to extra-budgetary funds;
- fixed assets depreciation costs.
This list is not closed and is advisory in nature. This means that the taxpayer can consider the above direct costs as indirect or include in direct costs those that are not directly named in Art. 318 Tax Code of the Russian Federation. However, tax authorities require proof of the validity of this approach (Articles 252, 319 of the Tax Code of the Russian Federation, letter of the Federal Tax Service of Russia dated February 24, 2011 No. KE-4-3 / [email protected] ). It is possible to take into account production costs as indirect only if the company proves in its accounting policy the impossibility of classifying them as direct, and also presents an algorithm for distributing such expenses taking into account economically justified indicators.
The calculation of income tax depends on the correct classification of costs as direct and indirect. If a company writes off a lot of indirect costs at once, and the tax authorities do not agree with it, additional taxes and a fine will most likely follow. An example where a company included depreciation as part of indirect expenses and defended its position in court is the resolution of the Federal Antimonopoly Service of the Volga-Vyatka District dated 02/04/2014 No. A82-12003/2012. However, there is also the opposite example: the Arbitration Court of the Moscow District, in its resolution dated 06/05/2017 No. F05-7067/2017 in case No. A40-136716/2016, agreed with the tax authority, which considered it unlawful to include general construction costs associated with the maintenance of construction as indirect expenses. sites for the construction of low-rise individual housing and village infrastructure (by decision of the Supreme Court of the Russian Federation dated September 27, 2017 No. 305-KG17-13063, the transfer of case No. A40-136716/2016 to the judicial panel for economic disputes of the Supreme Court of the Russian Federation for review in cassation proceedings was refused) .
For more information on how to correctly determine both types of expenses, read the article “How to divide income tax expenses into direct and indirect?” .
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We found out what direct and indirect costs are. Now let’s determine what transportation costs exist and in which cases they are direct costs of the company, and in which cases they are indirect.
What are indirect costs?
Expenses for the use and operation of equipment, non-production costs, cost of some goods.
Many industrial companies include indirect costs: heating, electricity, depreciation, administrative and management apparatus, wages of individual employees, lighting.
Indirect costs depend on the country where the organization operates.
The turnover of the enterprise - the higher the income, the more space is allocated for indirect costs. From the field of activity: service sector or production sector.
When managing the accounting of an enterprise, much attention is paid to the distribution of expenses into direct and indirect. With the right approach, you will avoid problems with the Tax Service and significantly reduce tax payments
The main thing is compliance with the Tax Code of the Russian Federation and justification of accounting policies.
Costs for delivery of purchased property
If a trading company purchases goods from another company and exports them on its own or pays for delivery to a transport company or counterparty, such costs will be direct (paragraph 3 of Article 320 of the Tax Code of the Russian Federation). They are not written off to the cost of goods in full, but are distributed between sold and unsold goods according to the following formulas:
TRNP = OSTtov × average percentage of TR,
Average percentage of TP = (TROst + TPtek) / (Stack + OSTtov) × 100%,
TR to be written off in the current period = TRost + TRtek – TRNP,
where: TR - transportation costs;
TRNP - transportation costs for unsold goods;
TRost - transportation costs for the balance of goods at the beginning of the month;
TRtek - transportation costs for the current month;
Stack - the cost of goods sold in the current month;
OST - the balance of unsold goods at the end of the month.
NOTE! Unlike manufacturing companies, trade organizations do not have the right to establish their own list of direct and indirect costs (paragraph 3, article 320 of the Tax Code of the Russian Federation).
When purchasing an OS, the company must include the costs of its delivery as part of the actual costs of acquiring the OS (clause 8 of PBU 6/01). For tax purposes, transportation costs will be taken into account in the same way as in accounting, that is, they will be included in the cost of fixed assets and then written off as expenses through depreciation.
Which document is the basis for capitalization of fixed assets and how to fill it out correctly, read the article “Unified form No. OS-1 - Certificate of acceptance and transfer of fixed assets” .
A manufacturing company includes costs for the delivery of raw materials in the cost of inventories and takes them into account as part of material costs (clause 2 of Article 254 of the Tax Code of the Russian Federation).
Therefore, in this case, TP will be a direct cost to the company. If the delivery cost is fixed as a separate amount, then, in addition to the documents for the raw materials themselves, the supplier provides the buyer with a TTN and an invoice for transport services. https://youtu.be/https://www.youtube.com/watch?v=s12lbu8yE9Y
Accounting for indirect expenses in the absence of income
Lack of income is caused by two reasons:
- The first is: the company conducts its activities correctly, but it has no buyers or sales do not generate revenue. Taxation for such industries can only be disastrous and significantly worsen financial affairs.
- The second reason: the organization is performing the work, but payment will occur after some time.
For example, construction companies. Profit from building an object and renting it out will occur only after significant costs and a long period of time.
If profit is calculated on a cash basis, then when taxes are deducted, the company goes into the red.
Sometimes tax inspectors do not collect tax because the company has no income.
Leading experts in the country argue that it is prohibited to levy taxes on a company that does not have any profit. This doesn't always happen.
Costs of delivering products or goods to the buyer
A trading company takes into account the costs of delivering goods to customers on the basis of paragraph. 3 tbsp. 320 Tax Code of the Russian Federation. Such expenses are indirect. Other transportation costs should also be considered indirect (letter of the Ministry of Finance of Russia dated November 29, 2011 No. 03-03-06/1/783).
When delivering products to customers, a manufacturing company takes into account the costs of this as material expenses (subclause 6, clause 1, article 254 of the Tax Code of the Russian Federation). Since they are not directly indicated in the list of direct expenses, the company can accept them as indirect (letter of the Ministry of Finance of Russia dated November 13, 2010 No. 03-03-05/251).
To account for TR when delivering property to the buyer, the company must issue a consignment note (TORG-12) and a consignment note (1-T) (letter of the Ministry of Finance of Russia dated February 27, 2012 No. 03-03-06/1/105).
Read about the procedure for filling out TORG-12 in the article “Unified form of TORG-12 - form and sample” .
Transport maintenance costs
In the costs of maintaining vehicles, the company includes expenses for fuels and lubricants, repairs and purchase of components for cars, the cost of insurance company services, parking and traffic police fines.
Expenses on gasoline, diesel or other fuel for a car are considered other expenses associated with production and sales (subclause 11, clause 1, article 264 of the Tax Code of the Russian Federation). However, the company can also take them into account as direct expenses, based on the letter of the Ministry of Finance of Russia dated June 10, 2011 No. 03-03-06/4/67. For example, if products are delivered to customers by car, spending on fuel and lubricants in this case can be taken into account in material costs. But if the vehicle is intended to transport top managers of the company, the cost of fuel and lubricants is other expenses and indirect expenses. These nuances should be fixed in the accounting policies.
A mandatory document, without which expenses for fuel and lubricants cannot be written off, is a waybill. For more information on how to fill it out, read the article “What is the procedure for filling out travel documents (sample, form)?” .
The purchase of spare parts and vehicle repairs should be classified as indirect expenses and completely written off in the reporting period in which these expenses were incurred (clause 1 of Article 260 of the Tax Code of the Russian Federation). Repair costs are written off based on:
- certificate of completion of work, invoice and payment documents, if the repairs were carried out by a third-party company;
- estimates for repair work, an invoice for the release of spare parts from the warehouse, an act of acceptance of work performed, an act of writing off worn-out spare parts if the repair was carried out on your own.
NOTE! Spending on repairs must be economically justifiable. If, for example, an expensive sound system is installed instead of a broken car radio, the tax authorities will consider this an excess and will remove the costs, since the sound quality does not affect the ability of the car to make a profit.
Any vehicle must be insured and have an OSAGO policy issued for it (Article 4 of the Law “On Compulsory Insurance of Civil Liability of Vehicle Owners” dated April 25, 2002 No. 40-FZ). Expenses for compulsory motor liability insurance are indirect expenses and must be taken into account as part of the company’s other expenses in equal amounts during the term of the contract (clause 1 of article 263, clause 6 of article 272 of the Tax Code of the Russian Federation).
In addition to compulsory motor liability insurance, a company can buy CASCO insurance. This is her right, not her responsibility. CASCO provides an extended insurance guarantee for the car, so it costs more. Expenses for the CASCO policy are considered other expenses of the company (clause 3 of Article 263 of the Tax Code of the Russian Federation).
NOTE! “Simplers” can only take into account the costs of compulsory motor liability insurance, but not CASCO insurance (subclause 7, clause 1, article 346.16 of the Tax Code of the Russian Federation).
About accounting and tax accounting of transport costs under the simplified tax system, read the article “Transportation costs under the simplified tax system “income minus expenses.”
The cost of paid parking can be taken into account for tax purposes as indirect expenses (subclause 11, clause 1, article 264 of the Tax Code of the Russian Federation). The basis for writing off costs will be a parking receipt, cash receipt and sales receipt, as well as an act of provision of services if a long-term rental agreement for a parking space is concluded.
But if the car ends up in an impound lot or the driver violates traffic rules, then the payment of fines cannot be taken into account in expenses in any case, like any other administrative fines (Clause 2 of Article 270 of the Tax Code of the Russian Federation).
Who shares the costs?
The division of expenses is regulated by the Code of the Russian Federation, namely Article 318.
The procedure for distributing and sorting received and spent funds is a very important task, since the amount of tax money paid will depend on this, and if the law is neglected, criminal liability may arise for tax evasion or non-payment. Not everyone divides income into categories
For organizations that keep track of earnings through a cash register, the need for accounting disappears
Not everyone divides income into categories. For organizations that keep track of earnings through a cash register, the need for accounting disappears.
This same category of taxpayers includes organizations that provide services to the population; all income is automatically considered indirect. All others must maintain separation in their accounting policies.
The division of income in strict compliance with all provisions of article number 318 is not necessary, since some of its provisions are advisory in nature, therefore the accountant himself has the right to decide which income is classified as indirect and which as direct.
Transport rental costs
A company may not have vehicles, but rent them from another company, individual, or pay compensation to employees for using their own cars for business purposes.
For tax purposes, the lessee's payment under a vehicle lease agreement is included in other expenses associated with production and sales (subclause 10, clause 1, article 264 of the Tax Code of the Russian Federation). If the car was rented for the main activities of the company (trade or production), rental costs can be taken into account as direct expenses. If the car is used for other purposes (for example, to serve administrative personnel), it is better to take such expenses into account in indirect costs. The company must justify the chosen procedure in its accounting policies.
The lessee, in accordance with the lease agreement, bears the costs of car maintenance (fuels, insurance, repairs, etc.). Such expenses are taken into account in the same way as when a car is owned by a company.
The tenant will write off expenses on the basis of supporting documents: contracts, payment documents, vehicle acceptance certificates, waybills, etc.
If the car is rented with a crew, then the costs of its maintenance are borne by the lessor, and the company can write off the costs of driving the car as part of labor costs (clause 21 of Article 255 of the Tax Code of the Russian Federation) in accordance with the service acceptance certificate. Whether such costs are direct or indirect depends on the scope of use of the car.
If a company pays an employee compensation for using their own car at work, such expenses can be written off only within the limits established in subparagraph. 11 clause 1 art. 264 Tax Code of the Russian Federation:
- for cars with engine capacity up to 2,000 cc. cm - 1,200 rub. per month;
- cars with an engine over 2,000 cc. cm - 1,500 rub. per month (Resolution of the Government of the Russian Federation dated 02/08/2002 No. 92).
In excess of these amounts, according to officials, the company cannot take into account any expenses on transport owned by an employee (letter of the Ministry of Finance of Russia dated March 23, 2018 No. 03-03-06/1/18366, dated December 4, 2015 No. 03-03-06/ 70852, dated May 16, 2005 No. 03-03-01-02/140).
For arguments from the opposite point of view, see the material “Is it possible to take into account the costs of operating an employee’s vehicles if he is paid compensation for a car?”
Are there any restrictions on recognizing compensation expenses for an employee for using his own truck, see the material “[LIFEHACK] We compensate an employee for expenses for a personal vehicle.”
Compensation to an employee for the use of transport is an indirect expense of the company, since Art. 318 of the Tax Code of the Russian Federation there are no compensations among the amounts that can be attributed to direct expenses.
Features of accounting for wages and salaries
Manufacturing products in accounting has several main expenses:
- Salary.
- Social payments.
- Material costs.
- Depreciation.
- Other expenses.
Remuneration is the main column. To correctly calculate allowances, additional bonuses and basic labor income, special calculation sheets are used.
An individual approach is applied to each employee, taking into account:
- opening hours;
- volume of products produced;
- product quality;
- labor intensity of the process;
- skills, incentives;
- allowances, pensions.
Ultimately, a final score is generated.
In addition to the calculation system, which depends on the hours of production, there are calculations based on sales volume, according to the contract, and others.
The payment received is considered a direct expense and is taken into account by the tax service. There are categories of workers that can be classified as indirect. These are those who are not in the company on a permanent basis, are not documented and perform work as needed.
It is beneficial for an enterprise to have an informal workforce whose salary is placed in a “white envelope”, since there is no need to pay tax.
Such a salary is of no benefit to the employee, since there is no work experience, there are no pension accruals, and he risks losing his job at any time without a good reason.
Some large companies include wages of their employees as direct expenses.
