The procedure for calculating VAT during construction and installation works
To calculate VAT when performing construction and installation work for the taxpayer’s own consumption, the following steps are performed sequentially:
- The tax base for completed construction and installation works is calculated.
- The tax period in which VAT must be calculated and the tax amount must be calculated is determined.
- An invoice is drawn up for the cost of construction and installation work performed.
- The amount of VAT on purchased materials, works, services necessary to carry out construction and installation work, and the amount of VAT accrued on the volume of construction and installation work performed are subject to deduction.
- A completed VAT return is submitted to the tax authority.
- Tax is paid to the budget if the declaration reflects the amount of VAT payable.
VAT on transfer of goods for own needs
What is the transfer of goods for one’s own needs for VAT purposes?
The transfer of goods for one’s own needs for VAT purposes refers to situations where the following conditions are simultaneously met:
- you transferred goods between your structural divisions. If the goods are received and registered immediately by the division, then transfer for its own needs does not occur;
- You formalized the transfer of goods with primary documents (for example, an invoice for internal movement between departments (Form N TORG-13), a demand invoice (Form N M-11));
- the goods are transferred to the division for final consumption, which is not associated with the further production and sale of goods (work, services).
The transferred goods can be received either from third parties or produced by you yourself.
This conclusion can be drawn from the analysis of paragraphs. 2 p. 1 art. 146 of the Tax Code of the Russian Federation, Letters of the Ministry of Finance of Russia dated June 16, 2005 N 03-04-11/132, Resolutions of the FAS Volga District dated May 22, 2018 N F06-33390/2018, FAS Moscow District dated July 21, 2014 N F05-9599/2011, dated 05/22/2013 N A40-84838/12-108-102.
An example of the transfer of goods for the organization’s own needs
On the balance sheet of the Alpha organization there is a recreation center (a separate division). Employees of the organization rest there for free. The recreation center is maintained at the expense of the organization.
The Alpha organization is engaged in the production and sale of food products. The organization transfers part of the produced products to the recreation center for free meals for vacationing workers.
The organization also regularly purchases household equipment and household goods from the Beta organization. These goods are transferred to the recreation center to support its activities.
Thus, the transfer of food, household equipment and household goods to the recreation center is a transfer of goods for the own needs of the Alpha organization.
When the transfer of goods for own needs is subject to VAT
The transfer of goods for one’s own needs is subject to VAT if the following conditions are simultaneously met (clause 2, clause 1, article 146 of the Tax Code of the Russian Federation):
- you transferred the goods on the territory of the Russian Federation, that is, when the transmitting and receiving structural units are located in the Russian Federation;
- costs of transferred goods cannot be taken into account as income tax expenses.
There is no need to impose VAT on the transfer of goods for your own needs if you could have included the costs of them in income tax expenses, but did not do so (Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated June 19, 2012 N 75/12);
- the transfer of such goods is not exempt from VAT under clause 2 or clause 3 of Art. 149 of the Tax Code of the Russian Federation.
How to calculate VAT when transferring goods for your own needs
Calculate the amount of VAT on the transfer of goods for your own needs as the product of the tax base and the tax rate (clause 1 of Article 166 of the Tax Code of the Russian Federation).
The tax base in this case is the cost of the transferred goods, which is equal to (clause 1 of Article 159 of the Tax Code of the Russian Federation):
- the price at which you sold identical or similar goods in the previous quarter (if there were no sales of identical ones);
- market price, if in the last quarter you did not sell identical and similar goods to third parties.
As the market price, you can take the price at which you sold similar goods to other non-interdependent persons (clause 3 of Article 105.7 of the Tax Code of the Russian Federation).
If you have not had such transactions, use prices for similar property from any open sources.
In both cases, include excise taxes in the price (for excisable goods) and do not take into account VAT (clause 1 of Article 154, clause 1 of Article 159 of the Tax Code of the Russian Federation).
Determine the tax base and charge VAT on the day of transfer of goods with which the primary documents were drawn up (clause 11 of Article 167 of the Tax Code of the Russian Federation).
the rate depending on the type of goods transferred: 10% or 18% (clauses 2, 3, Article 164 of the Tax Code of the Russian Federation).
Invoice for transfer of goods for own needs
When transferring goods for your own needs, you need to draw up an invoice in one copy, taking into account the following features (clause 1, clause 3, article 169 of the Tax Code of the Russian Federation).
In lines 2, 2a and 2b (name, address, TIN and KPP of the seller) and lines 6, 6a and 6b (name, address, TIN and KPP of the buyer) indicate information about the same person - your organization (p.p. “c” - “e”, “i” - “l” of the Rules for filling out an invoice).
In practice, it is sometimes suggested to put dashes in lines 6, 6a and 6b instead of the data of your organization.
We do not recommend adding dashes, since the Rules for filling out an invoice do not provide for their inclusion in these lines.
Register the invoice in the sales book in the period in which the day of transfer of goods falls (clause 11, article 167 of the Tax Code of the Russian Federation, clause 3 of the Rules for maintaining the sales book).
VAT deduction when transferring goods for your own needs
“Input” VAT on goods that you transferred for your own needs can be deducted if the following conditions are met (clause 2, clause 1, article 146, clause 1, clause 2, article 171, clause 1, article 172 of the Tax Code RF, Letter of the Ministry of Finance of Russia dated 09/04/2015 N 03-03-06/51162):
- transfer of goods for own needs is subject to VAT;
- the goods have been accepted by you for accounting;
- you have a properly executed invoice.
Determination of the tax base for VAT during construction and installation works
The tax base for VAT when performing construction and installation work is determined as the cost of this work. The indicated cost includes all expenses of the taxpayer actually incurred by him during the construction of fixed assets.
If third-party organizations are partially involved in carrying out construction and installation work, then the cost of construction work performed by contractors should not be included in the tax base (see decision of the Supreme Arbitration Court of the Russian Federation dated March 6, 2007 No. 15182/06 and resolution of the Federal Antimonopoly Service of the Ural District dated January 14, 2008 No. Ф09-11071/07-С2). Tax officials also adhere to this position (letter of the Federal Tax Service of Russia dated July 4, 2007 No. ШТ-6-03/527).
The tax base
The tax base for calculating VAT is the cost of work performed, taking into account all the actual expenses of the organization for their implementation (clause 2 of Article 159 of the Tax Code of the Russian Federation).
Situation: when calculating the tax base for VAT, is it necessary to include the rental fee for a plot of land that is in federal (municipal) ownership in the cost of work performed on a self-employed basis?
Yes need.
The tax base when performing construction and installation work for one’s own consumption is defined as the cost of the work performed, calculated on the basis of all the actual expenses of the organization for their implementation (clause 2 of Article 159 of the Tax Code of the Russian Federation). At the same time, construction and installation include work related to capital construction.
In accounting, capital construction costs are reflected in account 08 “Investments in non-current assets”. Therefore, in practice, tax inspectorates require that VAT on construction and installation work performed on a self-employed basis be charged on the entire amount of expenses collected on account 08, with the exception of the cost of work by contractors.
Although this position is ambiguous, in the current situation it is more expedient to include the amount of rent (accounted for in account 08) in the cost of construction and installation work for own consumption, charge VAT on this amount and deduct the tax in the same quarter (clause 6 of Art. 171, paragraph 5 of Article 172 and paragraph 10 of Article 167 of the Tax Code of the Russian Federation).
Situation: when determining the tax base for VAT, is it necessary to include the costs of developing design and estimate documentation in the cost of construction and installation work performed independently? The organization is building non-residential premises.
Yes, it is necessary if the design and estimate documentation is developed by the organization itself.
Carrying out construction and installation work for one’s own consumption is subject to VAT (subclause 3, clause 1, article 146 of the Tax Code of the Russian Federation). The tax base for such operations is defined as the cost of work performed, which includes all actual expenses for their implementation (clause 2 of Article 159 of the Tax Code of the Russian Federation). Construction of non-residential premises without appropriate design and estimate documentation is not permitted. This follows from the provisions of paragraph 3 of Article 48, paragraphs 1 and 7 of Article 51 of the Town Planning Code of the Russian Federation. Thus, the preparation of design estimates is inextricably linked with the start of construction work, and the costs of preparing documentation should be included in the cost of the construction project. Consequently, the costs of developing design and estimate documentation, carried out by the organization itself, increase the VAT tax base when performing construction and installation work on a self-employed basis. Similar clarifications are contained in the letter of the Ministry of Finance of Russia dated March 22, 2011 No. 03-07-10/07.
VAT accrual on construction work
VAT when performing construction work for own consumption must be calculated at the end of each tax period (clause 10 of article 167 of the Tax Code of the Russian Federation). Thus, the taxpayer calculates the amount of VAT on a quarterly basis based on the volume of work that was performed during the quarter.
On the last day of the quarter, an invoice is issued in accordance with Art. 163 of the Tax Code of the Russian Federation and clause 21 of the rules for maintaining a sales book, approved by Decree of the Government of the Russian Federation of December 26, 2011 No. 1137. The document can be drawn up in one copy, since the buyer to whom the second copy should be transferred does not exist as such (clause 6 of the rules for filling out an invoice - invoices approved by Decree of the Government of the Russian Federation dated December 26, 2011 No. 1137). Based on this, in the lines “Seller”, “Consignee and his address”, “Consignor and his address”, “Buyer” it is necessary to enter the details of the taxpayer who carried out the construction work on his own.
An invoice issued in this way is simultaneously registered in the purchase book and the sales book (clauses 3 and 21 of the rules for maintaining a sales book, approved by Decree of the Government of the Russian Federation of December 26, 2011 No. 1137 and paragraph 2 of clause 20 of the rules for maintaining a purchase book, approved by a Government Decree RF dated December 26, 2011 No. 1137).
Transfer from one production unit to another
In this case, as a rule, there are no grounds for charging VAT in accordance with subparagraph 2 of paragraph 1 of Article 146 of the Tax Code of the Russian Federation (when transferring for one’s own needs). Of course, provided that the company’s expenses for the acquisition (production) of transferred goods (works, services) reduce its taxable profit.
Example 3
The woodworking plant sells its own products - furniture and interior doors. By decision of the production director, in the first quarter of 2008, three furniture sets manufactured by the plant were transferred to the company’s trading division for the design of a sample room. Subsequently, after conducting an inventory, it was decided to write off these products because they had lost their consumer qualities.
Expenses for participation in exhibitions, fairs, expositions, for the design of shop windows, sales exhibitions, sample rooms and showrooms are classified as advertising expenses and are included in other expenses associated with production and sales (clause 4 of Article 264 of the Tax Code of the Russian Federation) .
Thus, if the finished product is transferred to decorate the sample room, its cost is taken into account when taxing profits. This means that there is no need to charge VAT when transferring such products.
Let’s assume that the cost of one furniture set is 50,000 rubles. The working Chart of Accounts of the plant (approved as an annex to the accounting policy) stipulates that, in particular, the following sub-accounts are opened for account 43 “Finished Products”:
– “Finished products in warehouse”;
– “Finished products in the sample room.”
Then the plant’s accounting department should reflect the corresponding transactions as follows:
DEBIT 43 subaccount “Finished products in the sample room” CREDIT 43 subaccount “Finished products in the warehouse”
– 150,000 rub. (RUB 50,000 x 3 pcs.) – finished products are transferred to the sample room;
DEBIT 44 CREDIT 43 subaccount “Finished products in the sample room”
– 150,000 rub. – the cost of finished products is written off as advertising expenses of the plant.
Accountants often ask the following question: is it necessary to charge VAT on the cost of surplus materials identified during inventory and transferred for production purposes to another division of the company? We answer: no, it’s not necessary.
The fact is that the value of surpluses identified during inventory is taken into account when taxing profits. True, expenses do not include their entire cost, but only part of it (clause 2 of Article 254 of the Tax Code of the Russian Federation). It is calculated as follows: the amount of non-operating income that was reflected in tax accounting when capitalizing the surplus is multiplied by the income tax rate (24%). The result obtained is the amount that can be taken into account in tax expenses.
Thus, there is no need to charge VAT on the transfer of surplus. A similar point of view is reflected in the letter of the Ministry of Finance of Russia dated September 1, 2005 No. 03-04-11/218.
VAT deduction in construction
When carrying out construction and installation work in an economic way, the taxpayer can claim the following amounts of VAT for deduction:
- VAT paid to suppliers when purchasing materials, works, services used during construction work.
- VAT paid to the seller of an unfinished capital construction project, subsequently completed using economic methods.
- VAT, which was accrued when performing construction and installation work for own consumption.
In this case, the VAT amounts specified in clauses 1 and 2 can be deducted as materials, works, services are received and invoices are received from suppliers (letter of the Ministry of Finance of Russia dated September 21, 2007 No. 03-07-10/20, Federal Tax Service Russia in Moscow dated July 22, 2008 No. 19-11/069325). The data on the amount of input VAT on goods (work, services) purchased for construction and installation work, and the amount of tax presented by contractors, are necessary to calculate the indicator on line 120 of section. 3 VAT declaration forms (paragraph 6, clause 38.13 of the procedure for filling out the declaration, approved by order of the Federal Tax Service of Russia dated October 29, 2014 No. ММВ-7-3/ [email protected] ).
It is necessary to deduct VAT, which was accrued on the amount of expenses incurred during the construction of a fixed asset using one’s own resources, on the last day of the tax period at the time the tax base is determined. This procedure for accepting deductions is established in paragraph. 3 paragraph 6 art. 171 and para. 2 clause 5 art. 172 of the Tax Code of the Russian Federation. Thus, VAT on completed construction work can be deducted in the same quarter in which it was accrued for payment to the budget (letter of the Federal Tax Service of Russia dated March 23, 2009 No. ШС-22-3/ [email protected] ). The specified amount of tax must be reflected in the VAT return in lines 060 “Performing construction and installation work for own consumption” section. 3 and 140 “The amount of tax calculated when performing construction and installation work for own consumption, subject to deduction” section. 3 (clauses 38.3 and 38.10 of the Procedure for filling out a tax return for value added tax, approved by order of the Federal Tax Service of Russia dated October 29, 2014 No. ММВ-7-3/ [email protected] ).
See also “The court recognized the work as completed, but there are no invoices for it. Is it possible to deduct VAT?
Construction and installation works for own consumption with the involvement of contractors. VAT deduction
At what point is VAT accepted for credit on capital investments (construction of fixed assets) by contract method in the absence of revenue?
According to paragraphs 3 p. 1 art. 146 Tax Code of the Russian Federation
Carrying out construction and installation work
for one’s own consumption
is recognized as subject to VAT taxation.
If the construction of facilities is carried out by contractors without carrying out construction and installation work using the taxpayers’ own resources
, then this norm
of Art. 146 of the Tax Code of the Russian Federation does not apply
(letter of the Ministry of Finance of the Russian Federation dated 09.09.2010 No. 03-07-10/12).
When performing construction and installation work for one’s own consumption, the tax base is determined as the cost of the work performed, calculated on the basis of all actual expenses of the taxpayer for their implementation ( clause 2 of Article 159 of the Tax Code of the Russian Federation
).
If construction work is carried out entirely by a contractor, then the cost of work performed by the contractor is not included in the VAT tax base
.
If the customer organization transfers materials to contractors on a toll basis
when carrying out capital construction by contract, then, as noted by the Ministry of Finance of the Russian Federation in letter dated March 17, 2011 No. 03-07-10/05, such transfer
is not recognized as an object of VAT taxation
on the basis of
paragraphs
1 clause 1 art. 146 Tax Code of the Russian Federation .
Based on clauses 2 p. 1 art. 146 Tax Code of the Russian Federation
The transfer of goods on the territory of the Russian Federation (performance of work, provision of services) for one’s own needs, the costs of which are accepted for deduction (including through depreciation deductions) when calculating corporate income tax, is not recognized as an object of VAT taxation.
In this regard, the Ministry of Finance of the Russian Federation indicated that if an organization is an investor and a customer-developer during the construction of a facility by contractors without carrying out construction and installation work on its own, then the expenses of this organization for monitoring the progress of construction and technical supervision are included in the initial cost of the object is not recognized as an object of VAT taxation and is not subject to VAT
(letter of the Ministry of Finance of the Russian Federation dated 09.09.2010 No. 03-07-10/12).
In a letter dated June 21, 2007 No. 03-07-10/10, the Ministry of Finance of the Russian Federation reported that if an organization is an investor, customer and developer when constructing an object by contractors without carrying out construction and installation work on its own, the amount of tax
for goods (works, services) purchased by an organization for the maintenance of a unit that provides services for its own needs for monitoring the progress of construction and technical supervision, which are not recognized as an object of VAT taxation and, accordingly, are not subject to taxation, are
not subject to deductions and are taken into account in the cost of such goods
(works, services).
However, the Presidium of the Supreme Arbitration Court of the Russian Federation
in the resolution of June 14, 2011 No. 18476/10 indicated that the application of the provisions
of clauses
2 p. 1 art. 146 of the Tax Code of the Russian Federation is erroneous.
Recognition by this item of transactions involving the transfer of goods (performance of work, provision of services) for one’s own needs as an object of taxation (provided that the corresponding costs are not included in income tax expenses) does not entail a refusal to apply tax deductions
, if the taxpayer incurred expenses provided for by Chapter 25 of the Tax Code of the Russian Federation for transactions subject to VAT.
In this case, operations for the implementation of construction work are recognized as subject to VAT taxation from the contractor and the VAT amount is presented to your organization by the contractor.
Clause 6 Art. 171 Tax Code of the Russian Federation
It has been established that
tax amounts presented to the taxpayer by contractors
(customers-developers) during capital construction (liquidation of fixed assets), assembly (disassembly), installation (dismantling) of fixed assets, tax amounts presented to the taxpayer for goods (works, services) purchased by him to perform construction and installation work, and the amount of tax presented to the taxpayer when he acquired objects of unfinished capital construction.
These deductions are made on the basis of invoices
, exhibited by sellers when the taxpayer purchases goods (work, services), property rights,
the said goods (work, services), property rights are
registered clause 1 of Article 172 of the Tax Code of the Russian Federation
).
In accordance with clause 12 of the Rules for maintaining logs of received and issued invoices, purchase books and sales books when calculating value added tax
, approved by Decree of the Government of the Russian Federation dated December 2, 2000 No. 914, invoices received by the buyer from sellers for goods purchased (work performed, services provided)
for the performance of construction and installation work for their own consumption from January 1, 2001, are registered in purchase book in order to determine the amount of VAT to be deducted
in the manner established by
clause 5 of Art.
172 Tax Code of the Russian Federation .
Invoices presented to the buyer by contractors
when construction work is carried out from January 1, 2001, assembly (installation) of equipment included in fixed assets
are registered in the purchase book in order to determine the amount of VAT to be deducted
in the manner established by
clause 5 of Art.
172 Tax Code of the Russian Federation .
Consequently, the right to deduct VAT arises with the customer after registration
construction and installation works performed by the contractor.
The Ministry of Finance of the Russian Federation believes that if the construction contract does not provide for the phased acceptance of work by the customer
, then
acts in form No. KS-2
“Act of acceptance of completed work”, signed by the customer in relation to the work performed by the contractor for the reporting month,
are the basis for determining the cost of work performed
, at which settlements are made with the contractor, and according to the contract do not constitute acceptance the result of the work by the customer.
Therefore, VAT deduction
for work performed by contractors, is possible on the basis of invoices issued by contractors, and
subject to the taxpayer’s acceptance of the results of the specified work to the extent specified in the contract
(letter dated October 14, 2010 No. 03-07-10/13 ).
If the contract provides for phased delivery of work
, then when accepting the work for registration, the customer has the right to deduct the VAT presented by the contractor.
Next, the second problem indicated in your question arises - the lack of revenue from sales
.
According to the long-standing belief of officials, if the taxpayer does not determine the tax base during the tax period, then there is no reason to deduct the VAT amount
.
In this regard, the specified tax deductions are made in the tax period in which the tax base for VAT arises (letters of the Ministry of Finance of the Russian Federation dated December 8, 2010 No. 03-07-11/479, dated June 22, 2010 No. 03-07- 11/260, dated March 30, 2007, No. 03-06-06-06/4).
Officials talk simply.
In accordance with paragraph 1 of Art. 171 Tax Code of the Russian Federation
the taxpayer has the right to reduce the total amount of tax calculated in accordance with
Art.
166 of the Tax Code of the Russian Federation , for tax deductions established
by Art.
171 Tax Code of the Russian Federation .
Based on paragraph 1 of Art. 166 Tax Code of the Russian Federation
the VAT amount is calculated as a percentage of the tax base corresponding to the tax rate.
This means that if a taxpayer does not have an activity, transactions for which are recognized as subject to VAT taxation, then, accordingly, there is no tax base.
for this tax.
In this regard, the grounds for applying deductions
no
value added tax .
The conditions for accepting VAT for deduction are determined by Art. 171
and
172 Tax Code of the Russian Federation
.
Supreme Arbitration Court of the Russian Federation
in Resolution No. 14996/05 dated 05/03/2006, he noted that if the above conditions are met, the taxpayer
has the right to deduct
from the total amount of value added tax payable to the budget the amount of tax paid to suppliers of goods (works, services).
At the same time, the judges emphasize, the norms of Chapter 21 of the Tax Code of the Russian Federation
do not establish the dependence of VAT deductions
on purchased goods (works, services)
on the actual calculation of VAT for specific transactions
for which these goods (works, services) were purchased.
Implementation
goods (works, services) for specific transactions
in the same tax period is not,
by force of law,
a condition for the application of tax deductions
.
The object of VAT taxation is sales operations, which are activities extended over time aimed at the sale (direct transfer) of goods, results of work performed and services.
By virtue of Art. 167 of the Tax Code of the Russian Federation is associated with the moment of implementation
the emergence of the taxpayer’s obligation
to calculate the tax base and the obligation to pay tax from this base
.
And the application of VAT deduction is not related to the moment of sale
.
The Federal Antimonopoly Service of the Ural District also makes decisions in similar cases in favor of taxpayers.
The court repeats that the sale of goods (work, services) for specific transactions in the same tax period is not, by force of law, a condition for the application of tax deductions (resolution of the Federal Antimonopoly Service of the Ural District
dated 08/29/2011 No. Ф09-4715/11, dated 08/31/2011 No. Ф09-4710/11, dated 07/28/2008 No. Ф09-5325/08-С3).
Considering the above, you need to be prepared to defend your right to deduct VAT in the absence of revenue in court.
But the chance of winning a dispute with tax authorities is very high.
Results
VAT on the construction of fixed assets is calculated and deducted at the end of each tax period.
The basis for calculating the tax is the costs incurred during the construction campaign. VAT refundable is taken into account in the purchase book as materials and work are received, as well as the necessary documentation is received. You can find more complete information on the topic in ConsultantPlus. Free trial access to the system for 2 days.
What applies to construction and installation work
The type of construction and installation work includes all related work on the immediate preparation of the construction site, laying a pipeline, and ensuring electronic communications. In addition, construction and installation work also includes initial actions to dismantle existing structures - buildings, structures, structures, etc.
At the same time, construction and installation works will become a full-fledged object of taxation only if:
- the implementation of these construction and installation works led to a certain result - the emergence of new fixed assets, which can be expressed in new buildings, structures and other types of real estate;
- when performing certain construction and installation work, a direct change occurred in the initial cost of a particular property. This often happens when performing certain construction and installation activities for the reconstruction of objects, during its modernization, partial liquidation, etc.
In addition, construction and installation work may include not only the direct construction of certain objects, but also the laying of foundations for future buildings, road and underwater technical work, the construction of supporting structures for buildings, etc.
In the event that certain works, for some reason, cannot be recognized as construction and installation works, they will not be a legitimate object of taxation.
However, this does not mean that the taxpayer will not have obligations to pay certain taxes and fees in relation to previously carried out actions. These actions may be subject to another tax established by the tax legislation of the Russian Federation, the payment of which will also be required in accordance with current regulations.
Author of the article
According to paragraphs. 2 p. 1 art. 146 of the Tax Code of the Russian Federation, the transfer of goods on the territory of the Russian Federation (performance of work, provision of services) for one’s own needs, expenses for which are not accepted for deduction (including through depreciation charges) when calculating corporate income tax, are recognized as an object of VAT taxation.
The tax base for VAT in this case is determined as the cost of goods (work, services) transferred for one’s own needs. The value accepted for calculating the taxable base is equal to the sales price of identical (and in their absence, homogeneous) goods (similar work, services). For the calculation, prices that were in effect in the previous tax period are taken. If such prices are not available (in the previous reporting period there were no sales of similar goods (works, services)), then the base is determined based on market prices taking into account excise taxes (for excisable goods) and without including VAT (clause 1 of Article 159 of the Tax Code RF).
According to the regulatory authorities, the object of VAT taxation arises only if operations are carried out to transfer goods (work, services) to the structural divisions of the taxpayer (service industries and farms, including separate divisions). In turn, if property is acquired for one’s own needs, not related to the production and sale of goods (works, services), and is not transferred to structural divisions, then the object of VAT taxation does not arise (see letter of the Ministry of Finance of Russia dated June 16, 2005 N 03-04 -11/132).
As explained in the letter of the Ministry of Taxes of Russia dated January 21, 2003 N 03-1-08/204/26-B088, the object of taxation arises only when transferring for one’s own needs goods (works, services), the costs of acquisition (production) of which are not taken into account for taxation arrived. Despite the legally established “binding” of paragraphs. 2 p. 1 art. 146 of the Tax Code of the Russian Federation to expenses recognized for the purposes of Chapter 25 of the Tax Code of the Russian Federation, its application is not conditioned by any “intra-economic turnover” of inventory assets that are not recognized as expenses, but only when one’s own products (goods), work or service are not sold outsourced, but is consumed within the organization (see letter from the Department of Tax Administration for the Moscow Region dated October 20, 2004 N 06-21/18767). The same point of view is expressed by judges (see, for example, resolution of the Federal Antimonopoly Service of the Moscow District dated January 26, 2005 N KA-A41/13331-04). In their opinion, the classification of turnover subject to VAT on the basis of paragraphs. 2 p. 1 art. 146 of the Tax Code of the Russian Federation, depends on whether the taxpayer used goods (work, services) of his own production within the enterprise, the costs of which are not included in the costs of production and circulation.
