Main VAT changes in 2021

VAT for medical products during COVID-19

In accordance with the Decree of the Government of the Russian Federation of April 3, 2020 No. 430, until January 1, 2021, the sale of disposable medical products that are not registered in the Russian Federation, as well as other medical products, the sale of which is subject to VAT at a rate of 10%, is allowed. 3

Letter No. SD-4-3/6930 of the Federal Tax Service of Russia dated April 23, 2021 allows the application of a VAT rate of 10% in relation to medical products that do not have a registration certificate; it will be enough that the product is officially registered in the country of the manufacturer.

What is VAT

As mentioned above, VAT is an indirect tax.

The essence of this tax is that the seller charges VAT at a certain rate on the amount of goods sold to the buyer (works, services and property rights).

The amount of VAT received from the buyer is paid by the seller to the budget and is determined by him as the difference between the amount of tax calculated by him when selling goods (work, services, property rights) to buyers, and the amount of tax presented to this taxpayer when he purchased goods (work, services) , property rights) used for VAT-taxable transactions.

VAT is a federal tax, that is, mandatory for payment throughout Russia. It was installed in the Russian Federation on January 1, 1992.

VAT on providing employees with personal protective equipment

Against the backdrop of the current epidemiological situation, employers were required to provide sanitary services to employees and clients: the availability of antiseptics and disinfectants in crowded areas, the provision of personal protective equipment and other similar products.

Such provision is provided for by the Labor Code of the Russian Federation, recommendations of the Ministry of Health of the Russian Federation and Rospotrebnadzor and is not considered as a gratuitous transfer, therefore, it is not necessary to tax it with value added tax .

What are you risking if you don’t amend the contracts?

If you do not redo the contracts and demand an additional payment from the buyer starting in 2021, he may not agree. It is unknown whether it will be possible to recover the missing money through the courts. There is no judicial practice yet on the price of goods in connection with an increase in VAT, and in controversial situations, judges can shift the risks to the supplier - there are such precedents.

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VAT rate for book products

Decree of the Government of the Russian Federation of October 9, 2021 No. 1643 expands the list of transactions to which a VAT rate of 10% may be applied:

book products of an educational, scientific or cultural nature, published in electronic format and distributed via the Internet and satellite communication channels
books on disks and other media
e-books

This relaxation does not apply to advertising publications. Advertising information cannot exceed 45% in book products.

Objects of VAT taxation

Article 146 of the Tax Code of the Russian Federation provides a list of commercial transactions in respect of which there is no doubt whether it is necessary to pay VAT. The following are subject to tax:

sale of goods and services on the territory of the Russian Federation, sale of property as collateral;
transfer of goods and services for own consumption on the territory of the Russian Federation, if such transactions are not subject to deduction;
carrying out any construction work for one’s own needs;
import of products into the territory of the Russian Federation.

On the other hand, there are transactions that are not recognized as objects of taxation. Carrying them out allows the entrepreneur not to even think about how to determine the amount of VAT in the budget:

transfer of company property to a legal successor during reorganization;
transfer of LLC property upon its liquidation or exit of the founder;
privatization of housing by citizens in state houses;
privatization of state-owned enterprises;
sale of land plots or parts thereof;
transfer of property during confiscation, inheritance or bankruptcy;
conducting transactions with any banknotes, excluding numismatics;
transfer of property to an NPO if its work is not related to entrepreneurship;
transfer of property as part of an investment or concession;
organization of vehicle travel on toll roads;
improving the situation on the labor market, combating unemployment;
the work of NGOs protecting the interests of depositors in banks in Crimea and Sevastopol;
transfer of property to an NPO conducting Formula 1 racing championships;
transfer of real estate to the state for the development of speed skating.

VAT for IT companies

From January 1, 2021, VAT exemption will be provided only for software that will be included in the Unified Register of Russian Computer Programs and Databases.

This norm is provided for by Federal Law No. 265-FZ of July 31, 2020.

There is no VAT exemption for the implementation of rights to use programs if they allow the distribution of any advertising information about the programs. There is still a VAT exemption for exclusive rights to inventions, know-how, etc.

If, starting next year, programs are purchased from a foreign seller, then VAT taxation will not be avoided. To obtain the right to deduction, the company must make sure that the potential foreign counterparty is registered in the Russian Federation and is a tax payer. At the same time, the documents, agreement or payments must contain information about the Taxpayer Identification Number (TIN), KPP and the VAT amount must be highlighted . In this case, invoices are not provided; information must be reflected in the Purchase Book.

If a foreign partner is not registered in the Russian Federation, then the company cannot act as a tax agent, i.e. should not charge tax on this transaction and claim it as a deduction.

The formation of the Unified Register for Russian IT companies is carried out on the basis of Decree of the Government of the Russian Federation of November 16, 2015 No. 1236.

VAT changes in 2021

Sergey Sakun

December 21, 2021 251
0
Taxes

In 2021, amendments to the law regarding VAT will come into force: the declaration form has been changed, the procedure for paying compensation in the event of a delay in reimbursement has been simplified, and reduced rates have been extended.

In this article we will look at the main innovations.

Changes in the declaration form

The VAT report is submitted quarterly - four times a year no later than the 25th day of the month following the reporting period. Until January 25, 2021, a declaration for the fourth quarter of 2021 is submitted, but in a new form. The law that makes improvements to it came into force on January 1.

The VAT return form from 2021 was approved in the Order of the Federal Tax Service dated August 19, 2020 No. ED-7-3 / [email protected]

In all sections, barcodes were changed, new lines 085, 090 and 095 were added to the first section, some transaction codes were renamed, others were added (Appendix No. 3). The line with the code of the type of economic activity (OKVED) was removed from the title page.

New lines

Added to section 1 of the declaration:

Line 085 - “SZPK sign”.
Line 090 - “The amount of tax payable to the budget by a taxpayer who is a party to the SZPK.”
Line 095 - “The amount of tax calculated for reimbursement from the budget by a taxpayer who is a party to the SZPK.”

Payment of interest in case of delay in VAT refund

Until January 1, 2021, if tax officials delayed payment of VAT refunds, then interest could only be received by drawing up a corresponding application and sending it to the Federal Tax Service. Moreover, this had to be done before the inspection made a decision.

Now there is no need to submit an application to the Federal Tax Service - tax inspectors will independently calculate compensation for the delay in VAT refund. Interest for late reimbursement will be accrued for each day of delay based on the current refinancing rate of the Central Bank of the Russian Federation.

This rule is enshrined in paragraph 10 of Art. 176 of the Tax Code of the Russian Federation.

National product traceability system

The national product traceability system will be introduced at the legislative level on July 1, 2021 (Federal Law of November 9, 2021 N 371-FZ). With its help, the collection, recording and storage of information about goods subject to traceability will be ensured.

The purpose of this innovation is to organize control over goods from the moment of import into the country until the moment of its sale. In this way, the state is trying to prevent the import of “gray” and counterfeit products from abroad. Also, the system will reduce cases of tax and customs evasion.

The list of goods that will be subject to the traceability procedure will be established by the Federal Executive Authority. They will also set the criteria by which the product will be included in this list.

Sellers will be required to issue invoices for traceable items electronically, subject to exceptions. This and other features regarding the issuance of invoices are also established in Federal Law N 371-FZ.

VAT exemption for IT companies

IT companies will be able to receive VAT exemption in 2021. On January 1, changes to paragraphs came into force. 26 clause 2 art. 149 of the Tax Code of the Russian Federation. The regulation clarified the procedure for obtaining benefits.

The rules regarding exclusive rights to inventions, utility models, industrial designs, topologies of integrated circuits, know-how were moved from subclause 26 to subclause 26.1

Benefits from January 1, 2021 apply to exclusive rights to programs and databases included in the relevant register. Relief is also provided for updates to these programs and databases and additional functional extensions.

The Federal Tax Service has released a document that extensively explains the procedure for providing IT benefits.

Thus, companies that use the software for:

advertising distribution;
placing offers for the sale of goods;
searching for potential clients.

The VAT benefit also does not apply to other services provided by IT companies if they do not meet the conditions described in the amended subclause.

Reduced VAT rate

The VAT rate of 10% for domestic air transportation of passengers and baggage has been extended until the end of 2021 (Clause 6, Article 3 of Federal Law No. 83-FZ dated 04/06/2015). These rules are enshrined in paragraphs. 6 paragraph 2 art. 164 Tax Code of the Russian Federation.

For flights to and from Crimea, the Kaliningrad region, the Far Eastern Federal District and back, as well as for routes that do not include departures and landings in Moscow and the Moscow region, the 0% rate will continue to apply.

The reduced rate will not be extended for all types of activities: when selling services for the transfer of breeding livestock and poultry for ownership and use under financial lease agreements with the right to buy, it will be valid until January 1, 2021. Then the rate will become 20%.

Tax Free system

On January 1, 2021, Federal Law No. 220-FZ of July 20, 2020 came into force, which introduces the “Tax Free” electronic check system (no fees). Checks for VAT compensation for foreign citizens can now be issued electronically.

Electronic receipts confirm that the goods were exported from Russia. The documents are sent to the customs service, and from there to the sellers, who reimburse the VAT.

Deduction when switching to OSNO

The special UTII regime officially became unavailable on January 1, 2021. For those taxpayers who switch from this tax regime to OSNO, a VAT deduction is provided.

You can use a refund if goods, works, services, property rights were acquired during the application of UTII, but were not used before the transition to the main tax regime.

However, you can receive this deduction only when switching to OSNO. In other special modes, VAT refund is not available.

Some changes extend existing provisions, others introduce new ones. Each of them is aimed at improving the tax system in the Russian Federation.

Many innovations are related to digitalization and the introduction of the ability to present certain information in electronic format. In order for this information to have legal significance, it is certified using an electronic signature issued by certification centers.

The certifier offers an electronic signature “Astral-ET” for participation in tenders, work with state portals and electronic document management. You can connect to it one of the tariff plans: “OFD”, “Portals” and “Tendering”. The choice of tariff plan depends on the area of application of the electronic signature, ensuring maximum ease of use.

Sergey Sakun

December 21, 2021 251
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Astral-ET

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Features of transportation by sea vessels for VAT purposes

In accordance with Federal Law No. 265-FZ of July 31, 2021, the list of transactions to which the zero VAT rate will be applied has been expanded. Thus, from October 1, 2021, operations involving the transportation of goods by sea vessels from the point of departure on the territory of the Russian Federation to the point of unloading or transshipment for the purpose of further export from the Russian Federation are subject to zero VAT rates.

This law was adopted in connection with the Resolution of the Constitutional Court of the Russian Federation of June 30, 2021 No. 31-P, which dealt with a difficult case when an exporter entered into an agreement with a carrier for the export of goods. During the fulfillment of contractual obligations, the vessel broke down on the territory of the Russian Federation, and therefore the exporter was forced to enter into a new contract with another transport company.

In the case under consideration, the tax inspectors considered that the first carrier company did not have the right to apply a VAT rate of 0% and added an additional amount of tax, referring to the fact that international transportation did not take place.

The judge in his decision supported the taxpayer’s side and considered the use of a zero rate in accounting justified .

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Legal documents

Federal Law of July 13, 2020 No. 195-FZ
Federal Law of July 13, 2020 No. 191-FZ
Federal Law of September 29, 2019 No. 325-FZ
Article 78 of the Tax Code of the Russian Federation
Article 79 of the Tax Code of the Russian Federation
Article 85.1 of the Tax Code of the Russian Federation
Article 164 of the Tax Code of the Russian Federation
Article 165 of the Tax Code of the Russian Federation
Article 149 of the Tax Code of the Russian Federation
Federal Law No. 189-FZ dated July 13, 2020

VAT declaration

Starting with reporting for the fourth quarter of 2021, which must be submitted to the tax office before January 25, new requirements will be imposed on the procedure for filling out a VAT return (see more details New forms of VAT and property tax returns)

In 2021, we should expect new changes when filling out the declaration; this will be related to the introduction of a mechanism for traceability of imported goods.

It is planned that the changes will affect reporting starting from the third quarter of 2021 .

VAT deduction

At first glance, VAT is paid on all revenue of the enterprise. But if we remember its name, it will become clear that the law does not mean turnover as a whole, but some added value. Accordingly, a businessman has the right to calculate VAT only on his income, that is, minus the amount of tax that he has already paid to the supplier of the product or service. According to Article 171 of the Tax Code of the Russian Federation, it can be deducted when purchasing products in Russia or importing them from abroad with payment of duties for:

goods or services used in taxable transactions;
goods or services purchased for subsequent resale;
goods or services used in transactions outside Russia. purchase from a foreign organization registered with the Federal Tax Service of electronic services according to the list given in Article 174.2 of the Tax Code of the Russian Federation;
retail sale of goods to foreign citizens for export from Russia;
return of previously delivered goods;
working with contractors in the field of capital construction and purchasing unfinished projects;
reimbursement of travel and hospitality expenses;
receipt of prepayments from tax agents on account of future supplies;
lack of documents for goods subject to VAT at a rate of 0%;
changes in the price or quantity of shipped products;
failure to submit documents before the expiration of 180 days after the import of goods.

On the other hand, Article 170 of the Tax Code of the Russian Federation lists cases when it is impossible to obtain a VAT deduction, and therefore the entrepreneur must include the tax in the cost price:

the products are needed for the manufacture or sale of goods exempt from VAT;
goods are purchased by entities that do not pay VAT;
goods are needed for operations that, according to Article 39 of the Tax Code of the Russian Federation, are not sales;
Products are purchased by banks for financial transactions or rental.

The deduction is carried out automatically when filing quarterly tax returns. But to prove the right to it, a number of conditions must be met. These are the criteria, discussed in more detail in the article on what VAT deduction is:

products are purchased for production, resale or other operations that are subject to VAT;
goods are put on accounting records, that is, they are added to the balance sheet of the enterprise;
the company has invoices and invoices proving the right to deduct;
the company imported goods subject to payment of VAT at customs.