VAT on the purchase of works and services from foreign entities

When does a Russian company pay VAT?

A Russian legal entity is a tax agent for VAT when services are provided by a foreign company when two conditions are met:

• the place of sale is Russian territory;
• a company from another country is not registered with the Federal Tax Service of the Russian Federation.

The obligation of a tax agent for VAT, if a foreign company provides services to a Russian company, arises regardless of the taxation system used by the legal entity - OSN, simplified tax system or UTII.

Individual entrepreneurs using any taxation system, including the patent system, purchasing services from a counterparty from another country, assume the responsibility of a VAT tax agent and submit a tax return in the prescribed manner.

As for the obligation to pay VAT for foreign organizations, such an obligation arises if:

• the foreign counterparty has been assigned a Russian TIN;
• the company has representative offices or branches in Russia.

The tax agent submits reports electronically on a quarterly basis. The deadline for filing a declaration is no later than 25 days after the end of the reporting quarter.

ConsultantPlus experts discussed how to correctly fill out a payment slip for settlements with a foreign organization. Use these samples for free.

Place of sale

The place of implementation is understood as the territory of the state where the work is actually completed. Russian territory is recognized as such a place if the provision of services is completed on the territory of the Russian Federation. An exception is the rental of movable and immovable property, agency, accounting, consulting and some other services listed in paragraph 1 of Art. 148 of the Tax Code of the Russian Federation, for which the place of sale is the location of the buyer or property.

The payer of VAT on consulting services to a foreign company is a foreign counterparty (letter of the Ministry of Finance dated March 15, 2019 No. 03-07-08/17231).

The same document contains information on the procedure for paying VAT on electronic services of a foreign company in the Russian Federation: in this case, the obligation to calculate and pay lies with the supplier.

A Russian company acts as a tax agent for VAT on transport services of a foreign company, provided that the points of departure and destination of the cargo are located on the territory of the Russian Federation (clause 4.1, clause 1, article 148 of the Tax Code of the Russian Federation).

Acceptance of VAT paid by a tax agent

VAT is accepted for deduction if the conditions are met (clause 2 of Article 171 of the Tax Code of the Russian Federation):

• the tax agent is a VAT taxpayer;
• VAT was paid by the tax agent to the budget;
• services purchased for activities subject to VAT;
• there is a correctly executed SF, issued by the NA itself;
• services are accepted for accounting.

Acceptance of VAT for deduction is formalized by the document Generating purchase ledger entries in the Operations section - Closing the period - Regular VAT operations - Create button.

To automatically fill out the Tax Agent , you must use the Fill .

Postings according to the document

Purchase Book report can be generated from the Reports – VAT – Purchase Book section. PDF

VAT declaration

The VAT return regarding the transactions of the tax agent will be completed as follows:

In Section 2 “The amount of tax payable to the budget, according to the tax agent”: PDF

• line 060 - the amount of calculated VAT according to the tax agent;
• page 070 - operation code "1011712".

A separate Section 2 must be completed for each foreign person.

In Section 3, page 180 “The amount of tax paid to the budget by the taxpayer as a buyer - tax agent, subject to deduction”: PDF

• the amount of VAT subject to deduction.

In Section 8 “Information from the purchase book”:

• invoice issued by the tax agent. Operation type code "".

In Section 9 “Information from the sales book”:

• invoice issued by the tax agent. Operation type code "".

Procedure for calculating and paying VAT

Tax at a rate of 20% is withheld from the amount due to be paid to the foreign partner and is transferred to the budget on the same date when payment under the contract occurs.

IMPORTANT!

The inclusion of tax in the price should be agreed upon with the supplier at the contract stage. If the contract does not contain a phrase stating that the price includes value added tax, the company is forced to pay the tax to the budget from its own funds.

Example. A carrier from Germany transports goods across Russian territory. In accordance with Art. 161 and art. 148 of the Tax Code, a foreign company is not a VAT payer if it does not have branches and representative offices in Russia and the services are provided on the territory of the Russian Federation. In our example, both of these conditions are met.

In September 2021, the delivery cost was 1,500 euros, which at the Central Bank exchange rate on the day of payment (September 15) is 126,495 rubles.

Value added tax in the amount of RUB 21,082.50. paid by payment order dated September 15, 2020. The supplier was transferred minus tax 105,412.50 rubles. (1250 euros).

The next question is: how to calculate VAT if a Russian organization provides services to a foreign organization on the territory of the Russian Federation. In this case, you should refer to Art. 149 of the Tax Code, containing a list of goods, works and services exempt from taxation, and compare the conditions.

If the counterparty is a foreigner...

When working with foreigners, you should always remember Art. 161 Tax Code of the Russian Federation. This article contains a list of situations in which an organization or entrepreneur is recognized as VAT tax agents required to withhold VAT from income paid to foreign persons.

T. KRUTYAKOVA, tax consultant
TAX AGENT - WHO IS HE?

Tax agents are persons who, in accordance with the Tax Code of the Russian Federation, are entrusted with the duties of calculating, withholding from the taxpayer and transferring taxes to the budget system of the Russian Federation (Article 24 of the Tax Code of the Russian Federation). Tax agents are obliged to: - correctly and timely calculate, withhold from funds paid to taxpayers, and transfer taxes to the budget system of the Russian Federation to the appropriate accounts of the Federal Treasury; - within one month, notify in writing the tax authority at the place of your registration about the impossibility of withholding tax from the taxpayer and about the amount of the taxpayer’s debt; — keep records of income paid to taxpayers, taxes withheld and transferred to the budget system of the Russian Federation, including personally for each taxpayer; - submit to the tax authority at the place of your registration the documents necessary to monitor the correctness of calculation, withholding and transfer of taxes; — for four years, ensure the safety of documents necessary for the calculation, withholding and transfer of taxes.