We are preparing for VAT changes on software from 2021

Benefit for IT companies

The VAT benefit provided for in paragraphs will be applied in a new way. 26 clause 2 art. 149 of the Tax Code of the Russian Federation. Starting from the new year, transactions for the sale of exclusive rights to computer programs and databases included in the unified register, as well as the transfer of rights to use these programs and databases, will not be taxed.

The exemption does not apply to the transfer of rights to use computer programs and databases if these rights consist of obtaining the ability to:

• distribute or access advertising on the Internet;
• post offers on the Internet for the purchase or sale of goods, works, services and property rights;
• search for information about potential buyers and sellers or enter into transactions.

That is, now it will not matter under what contract the computer programs were purchased: licensed or not. This means that the purchase of computer programs from foreign organizations will always be subject to VAT .

Because the benefits raised a lot of questions among industry representatives, and the Federal Tax Service had to issue official clarifications.

Read explanations of IT benefits from January 1, 2021

Only developers whose revenue from software production is more than 90% can take advantage of the benefits. Do not forget that the company must also be included in the register of domestic software.

General information

The regulations for collecting VAT are given in the Tax Code of the Russian Federation (07/26/2000). Art. 143 of the law in the second part determines that taxpayers are communities, individual enterprises and individuals involved in the import of goods into the Russian state.

The following are also subject to taxation:

1. Manufacturing of products sold within the Russian Federation;
2. Services sold;
3. Import of a product or service through customs points.

Restrictions do not apply to imports:

• goods that are imported with the assistance of philanthropic organizations or on a charitable basis as aid;
• immunomodulators and medications;
• objects that are valuable artifacts;
• items of equipment and components produced outside the Russian Federation;
• untreated precious stones (diamonds);
• metal and paper signs as monetary equivalent;
• food seafood.

The listed goods and products are not subject to taxation if the person responsible for the import is able to provide the required documentation and certificates at customs (Article 150 of the Tax Code of the Russian Federation).

According to the law, value added tax in Russia regarding imported goods is determined and calculated in accordance with their value. The importer receives a declaration, which must be paid within six months. A copy of the payment slip is sent to the tax authorities.

Latest changes regarding VAT calculation in the Russian Federation

The VAT law was last amended on July 12, 2021. Art. 164 of the new version of the Federal Law indicates that the taxation of added value is not carried out in relation to products provided for export, as well as international transit transportation.

Also read Federal Law 164 as amended. More about this here:

Art. 142 in the latest edition was supplemented with changes regarding commodity turnover and services for football organizations related to the 2021 World Cup held in Russia. VAT is not charged on the above transactions.

Art. 154

Methods for calculating value added tax imposed on goods or services sold.

What does Article 154 say?

• The procedure for exporting pre-shipped goods is not subject to VAT;
• The same applies to the cost of excise taxes;
• The purchase of agricultural products without taxation involves the determination of VAT in the form of the difference between the purchase price and the final cost;
• The price of the purchased vehicle (car) and its resale will subsequently be subject to VAT.

Art. 155 (part two)

Formulates the application of VAT in processes when the transfer of rights to real estate that has been loaned or invested takes place. The tax amount will be calculated based on the recorded costs and the value of the final product.

The amount of value added tax in Russia

In the Russian state, VAT is calculated at a value equal to ten and eighteen percent of the real price of a product or service. Also, the premium cost can be set in the form:

1. The cost of the goods, calculated as a customs payment;
2. Excise value;
3. In the form of customs duty.

Book products, children's products and medicines are subject to tax at the rate of ten percent of the actual value. Import of goods is zero percent. In other situations, the VAT rate is 18%.

Transition from UTII to OSNO

For persons who have switched from UTII to OSNO, a deduction of input VAT if goods, work, services, property rights were acquired during the period of application of UTII or imported into the territory of the Russian Federation, but were not actually used before the transition to OSNO.

OSNO is still a complex and tax-expensive system. For small businesses, it is most likely more profitable to be simplified. We have prepared two useful materials - a digest on how to deal with payments and obligations during the transition period, as well as a checklist for changing UTII to simplified tax system.

Who does not pay value added tax

Entrepreneurs and companies with an income of less than 2 million rubles for the three months following the reporting period are exempt from paying VAT. Categories of business entities operating in the following tax regimes are not considered VAT payers:

• simplified taxation system (with the exception of operations related to the import of goods into the territory of the Russian Federation);
• patent work;
• activities with a single imputed tax;
• work on the unified agricultural tax

Calculation of VAT in bankruptcy

From January 1, 2021, transactions for the sale of goods, works, services manufactured and (or) purchased (performed, provided) in the course of business activities after the debtors are declared bankrupt will not be recognized as subject to VAT.

In 2021, there was a moratorium on creditors filing bankruptcy applications. Over the first 9 months of 2021, 708 companies and 146 individual entrepreneurs took advantage of this right.

The moratorium has been extended until January 2021, analysts suggest, after which a surge in the number of applications is possible.

How to calculate VAT 20 percent

Value added tax is a mandatory indicator that is calculated and paid by commercial structures under the general taxation regime. There are two methods for calculating VAT 20 percent:

1. Direct - used if there are primary documents confirming the completion of taxable business transactions.
2. Estimated - used to determine the amount of the fee in cases prescribed in paragraph 4 of Article 164 of the Tax Code (upon receipt of an advance payment, sale of agricultural goods, etc.). This method is allowed to be used by inspectors of responsible authorities when conducting desk inspections (Article 31 of the Tax Code).

The direct method is the priority. It is used to “increase” the tax on the sales price or to separate it from the amount.

How to calculate 20% VAT on the amount? The formula is:

• VAT = NB x 20 / 100 or VAT = NB x 0.20

Where NB is the tax base.

How to calculate VAT 20 percent if there is a cost with tax included in it? There are 2 options:

• NB = C / 1.20; VAT = C - NB;
• VAT = C x 0.2 / 1.2;

Where NB is the tax base, C is the cost including VAT.

You may be interested in: VAT increase from January 1, 2021

New invoice details

As of July 1, 2021, amendments will come into effect regulating the traceability system for imported goods . This system is being created to confirm the legality of the circulation of goods in the EAEU, prevent the import of counterfeit products into the territory of the Russian Federation, increase the competitiveness of domestic goods, and reduce gray imports.

The Government of the Russian Federation will establish a list of goods, the sale of which will fall under the tracking system. A procedure for providing information to the tax office will also be developed.

When selling traceable goods, it will be necessary to issue invoices, including adjustment ones, in electronic form.

Exceptions are provided:

• sale of goods to self-employed citizens, as well as individuals for personal, family, household and other needs not related to business activities;
• re-export;
• sale and movement of goods from the Russian Federation to the territory of another EAEU state.

To do this, new details will be added to the invoice form:

• registration number of the batch of goods subject to traceability;
• a quantitative unit of measurement of a product that is used for traceability purposes;
• quantity of traceable goods.

At the same time, the absence (failure to indicate) of these details in the invoice will not entail a refusal to deduct VAT from the buyer.

Received a subsidy - restore VAT

If an enterprise has received a subsidy from the federal budget to reimburse the costs of paying for goods (works, services), it is obliged to restore the “input” VAT in accordance with subparagraph 6 of paragraph 3 of Article 170 of the Tax Code of the Russian Federation. It is important that from July 1, 2021, this norm will apply to subsidies received from regional and local budgets. Changes were made by Federal Law dated November 30, 2016 No. 401-FZ.

Read also “Tax deductions for VAT in 2021”

New form of VAT declaration

It will already need to be completed in the 4th quarter of 2021. The following changes have been made to the VAT return:

• barcodes have been replaced
• the line in which information about the OKVED code was previously displayed was removed from the title page,
• lines have been added to section 1 for information about the protection and promotion of investment,
• new codes have been added for the free transfer of property to fight COVID-19 or participate in the research of Antarctica,
• codes have been introduced for operations for the sale of services at international airports and services for the management of municipal solid waste,
• new codes for the IT industry.

Who is the VAT payer?

• all companies and private entrepreneurs using a common tax system;
• business entities engaged in importing and individuals transporting goods abroad

According to the provisions of the Tax Code of the Russian Federation, VAT must be paid when carrying out the following actions:

• sale of goods and services;
• redistribution of goods within the enterprise;
• transfer of products for their own needs by private entrepreneurs;
• construction, installation and commissioning works for own needs;
• export operations

Value added tax must be paid by the 25th of each month with the quarterly submission of a declaration, an updated sample of which was approved by the Federal Tax Service in 2014. Responsibility for late filing of a declaration, non-payment or erroneous calculation of value added tax can be both administrative and criminal in nature.

New forms of registers of customs declarations

Registers of customs declarations are provided to the tax authorities to confirm the right to apply a 0% VAT rate when making export shipments.

From 01/01/2021, it will be necessary to apply new forms of the register of declarations for goods for express cargo and the register of customs declarations, approved by Order of the Federal Tax Service of Russia dated 08/20/2020 No. ED-7-15 / [email protected]

Details about changes to VAT next year can be heard at the Kontur School seminar “VAT - 2021. Current issues. Changes."

VAT in 2021 - you need to know this!

According to the latest provisions, the VAT rate will not change in 2021, amounting to 10% for a narrow list of socially significant goods and 18% for all other products and exported products. Important nuances of current legislation can be listed as follows:

• clarifications on incorrect completion of the declaration and errors in calculations are submitted only in electronic form;
• the period of the bank guarantee for VAT refund has been extended to two months;
• This taxation system includes any Internet service provided by foreign companies

Calculating VAT in each individual case is a rather complex operation that must be handled by professional accountants. Effective assistance in calculating value added tax are numerous letters from the Federal Tax Service and the Ministry of Finance, which can be studied on the official websites of these government agencies.