New in VAT in 2021: everything an accountant needs to know

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Published: 04/08/2019

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Value added tax is an indirect duty that is paid by the seller of goods, works, services or property rights upon their sale. Its use is regulated by the Tax Code of the Russian Federation (Articles 143-178).

• Legislative changes in 2021
• Who is affected by the VAT rate change?
• New VAT rate
• What tariffs remain unchanged in 2021

Who will be affected by the new law?

The innovations will affect entrepreneurs who charge their clients and counterparties VAT . Obviously, these are companies subject to the general tax regime - OSN. Payers of UTII, PSN and simplified taxes will not be affected in any way by the innovation. They will not have to change accounting, reconfigure online cash registers or update software.

Also, nothing changes for those who work at a reduced VAT rate - 10% or 0%. These are sellers of medical and children's goods, books (10% rate) and those who issue licenses and collect duties (0% rate).

However, if you do not work with VAT, do not rush to rejoice. Even if technically everything remains in place, there are some things you should prepare for. This is the next point.

What all entrepreneurs need to do, regardless of tax regime

What is a VAT increase on the fingers? This is a price increase. From January 1, 2021, everything you buy and order from contractors who charge value added tax will become 2% more expensive . This is on average. Some of the suppliers will quietly raise prices higher, others will sacrifice their profits and raise prices, say, by a percentage. But it is a fact that purchasing prices will generally increase.

Therefore , the first thing you need to do is prepare for additional expenses . It will be the hardest for those who conduct business at the limit, penny to penny. In any case, reserves need to be found. Then this money will come back - after all, you yourself will most likely raise retail prices for your goods or services. But at first you will have to spend a little more.

New in explanations for VAT returns

The Federal Tax Service will add five more possible error codes to the VAT requirements.

From January 25, 2021, new error codes will appear in the requirements for providing explanations for VAT returns.

Taxpayers began receiving messages about this via TCS.

These are the codes.

The seminar program, in addition to filling out the declaration and new VAT rules in 2019, will talk about errors in invoices.

How to prepare for a VAT increase

Update software. This applies to the 1C Accounting program and similar ones. From January 1, 2021, the system should begin to charge value added tax at a rate of 20%. If you have a licensed version of the program, this will not be difficult - just download and install the appropriate updates. If you encounter any difficulties, please contact technical support.

If you don’t have time and don’t want to upgrade programs, you can turn to specialists. This is especially true for non-standard 1C configurations. There are plenty of offers for this service on the market. An experienced programmer or system administrator will easily solve this problem.

Transition to 20 percent VAT: accounting features

From January 1, 2021, an increased value added tax rate will come into effect. Most companies have questions about the transition to 20 percent VAT.

Some features of accounting during the transition period are described in the order drawn up by the Federal Tax Service.

• Products were delivered in 2021 and paid for next year. Taxation of the transaction is carried out at the time of transfer of ownership of the goods to the buyer, that is, before 01/01/2019 (upon shipment). An 18 percent collection rate was applied. When the money is received, the tax remains the same - 18%.
• Advance payments took place in 2021, and shipments took place in 2019. Primary documents for shipped products are drawn up taking into account the new tax amount. The previously declared VAT amount determined by calculation method (18/118) is recorded. If the buyer pays an additional 2%, then the seller issues an adjustment invoice. Both parties record the paid fee. If the buyer refuses to incur additional costs, then the supplier in the primary documents can reduce the tax base in proportion to the increased tax or indicate a new price and charge the buyer a debt. The seller will write off the debt in accounting after 3 years - after the statute of limitations has expired.
• Products shipped before the beginning of 2021, but their prices have changed. A prerequisite for a legal price adjustment is the presence of primary documents that confirm the fact that such changes to the transaction have been agreed upon with the recipient of the products (contract, additional agreement, etc.). When filling out new acts, invoices and other required forms, the supplier applies the fee that was in effect at the time of shipment - 18%.

Read about other transitional issues in the letter from the Federal Tax Service.

For those who use online accounting

Many online stores use online accounting provided by banks, fiscal data operators and other companies. These are the luckiest of all. Service providers are already working hard on this issue and, for the most part, are ready for the transition. Users of online accounting are beginning to receive notifications with detailed instructions for the transition.

If you use online accounting, contact your online accounting partner and request a plan of action. In most cases this will be free. All systems will automatically switch to a 20% VAT rate from January 1 next year.

What should I do if I do my accounting the old fashioned way - in an Excel spreadsheet?

The program will need to change all formulas and templates. Instead of 18 percent, we set 20 (or 120 instead of 118), after which the system itself will begin to calculate prices in a new way. You can do this yourself or contact a specialist. If you have an accountant or system administrator on staff, entrust this work to them.

The only nuance here is to catch the right moment. We explain: the program should start calculating VAT at 20% from the first of January . If in the case of 1C or online accounting this happens automatically, then with Excel everything will have to be done manually. That is, you will have to change formulas with templates on the night of December 31 to January 1. Or before the first working day after the New Year holidays.

Current information on VAT for 2019

The main innovation is an increase in the base VAT rate from 18 to 20%. Accordingly, the estimated rate, which is used in cases where VAT is already taken into account in the tax base, is determined by the formula 20/120.

Clause 4 of Article 164 of the Tax Code of the Russian Federation provides for the following situations for applying the calculated rate:

• receiving amounts for goods or services sold and work performed specified in Article 162 of the Tax Code;
• receiving advance payments for future deliveries;
• transfer of property rights , in accordance with paragraphs 2, 3, 4 of Article 155 of the Tax Code of the Russian Federation;
• VAT withholding by tax agents;
• sale of property purchased externally , which is subject to VAT accounting in accordance with current legislation;
• sales of agricultural products , in accordance with paragraph 4 of Article 154 of the Tax Code of the Russian Federation;
• sale of vehicles purchased for resale from individuals.

The following changes in legislation should also be taken into account:

1. Purchasers of electronic Internet services (specialized programs and databases) from foreign companies do not bear the responsibility of tax agents and, accordingly, do not withhold the amount of tax from proper payments. It is important to remember that if VAT was paid according to the rules in force in 2021, it is impossible to claim it for deduction.
2. Transportation services, prices for which are regulated when concluding state or municipal contracts, are exempt from VAT . In such cases, the rules established for passenger transportation within the city by public transport apply.
3. Revision of the terms of government contracts signed before the entry into force of the provision on changing the VAT rate - the execution price can be adjusted.
4. From January 2021, categories applying the single agricultural tax must pay VAT on a general basis . However, in the year of transition to this regime, as well as subject to compliance with the established income limit, the right to exemption is still valid.

The transition period that has developed in connection with changes in legislation creates difficulties for payers who entered into contracts before 2019. In accordance with Letter of the Federal Tax Service dated October 23, 2021 No. SD-4-3/ [email protected], such persons have the right to clarify the payment procedure and adjust the cost of goods sold, work performed and services performed, although, in the opinion of the authority, making changes to the contract is not required.

If the shipment of goods, works, services, property rights occurs from January 1, 2021 on account of advance payment made earlier, the selling party calculates VAT according to formula 18/118. When goods or services are directly shipped, tax is calculated at 20% and the amount calculated from the advance payment is claimed for deduction.

The buying party acts in a “mirror” manner - from the prepayment amount it claims VAT for deduction, calculated at the old calculated rate. After the fact of transfer of goods or property rights, performance of work or services, the right appears to deduct VAT in the amount of 20%, while simultaneously restoring the amount claimed for deduction from the prepayment, calculated according to the formula 18/118.

What to do with the online cash register

The cash register must punch a receipt with a VAT rate of 20% from January 1, 2021. To do this, the device needs to be updated . The change in the VAT rate is also tied to a change in the format of fiscal documents - FFD. For those who are not in the know: a cash receipt is a fiscal document. And from next year it will be different - the composition of the details indicated on the check will change.

Nowadays, most cash registers work with FFD version 1.0. To switch to work at the new rate, they need to be updated to version 1.05. After updating, the receipt will automatically indicate the new VAT rate - 20%.

How can you find out the version of the FFD your cash register uses? There are several ways to do this:

• look at the shift opening report. This is a small receipt that the cash register prints out when it starts at the beginning of the working day. The current version of the format of fiscal documents is indicated there;
• There is also an indication of the FFD in the online cash register settings. Study the menu and find the item “FFD version number”;
• go to your personal account on the website of your fiscal data operator - OFD. There, the FFD version number can be found in any cash receipt;
• in the personal account of the cash register, the version of the fiscal data format can also be indicated. Go to the “Terminals” item and see if the FFD number is there.

If the version number of your FFD is 1.0, the cash register needs to be updated to version 1.05 . You can set up the cashier’s workplace yourself or contact the company that sold you the cash register. When working independently, be careful: incorrect actions can block the cash register or lead to the replacement of the fiscal drive.

If you have FFD version 1.05, you don’t need to do anything. Everything will happen automatically and from January 1, VAT rates on cash receipts will change from 18 to 20 percent.

In addition to the format of fiscal receipts, you may have to reflash the cash register itself . Check with the supplier or manufacturer of the cash register device whether the device is ready to work under the new law and changes in the VAT amount. Also carefully monitor notifications from the fiscal data operator and the online cash register manufacturer. Important information regarding the transition may appear there. Information can be sent to your email, to your personal cash register account, or to the cash register itself.

VAT in 2021: upcoming changes and latest news

So, the taxation of socially significant product groups will not be affected:

• food;
• for children;
• medical purposes.

The 10% tax is not increased for domestic air transport. Air transportation to the Crimean Peninsula will not lose incentive benefits from the beginning of next year. The Far East and the Kaliningrad region remain in the 0% group until 2025 and indefinitely, respectively.

At the same time, the contribution to social extra-budgetary funds remains at the same level - 30%. Also, the provisions of this regulatory act do not apply to benefits and registration of deductions for representatives of the automobile industry - the added value for purchased goods and services is subject to return even in cases where such purchases were made for budget subsidies.

It is logical that the innovations also apply to prepayment transactions - the formula for such calculation, in accordance with clause 4 of Art. 164 of the Tax Code will also be replaced from “VAT amount = prepayment made x 18/118” to “prepayment made x 20/120”.

Increasing VAT to 20 percent: from what date does the taxation procedure change?

The most common question regarding VAT at 20 percent is: on what date will the updated rules come into force? So, the increase in VAT to 20 percent occurs simultaneously with the onset of the first day of 2019:

• The law does not establish a transition period for adaptation to the adjusted financial burden;
• entrepreneurs should not count on the introduction of preferences - the legislator does not provide for such a possibility;
• online cash register receipts printed from January 1, 2021 should already reflect the amount of VAT increased to 20 percent.

1. Ask our specialist a question at the end of the article. 2. Get detailed advice and a full description of the nuances! 3. Or find a ready-made answer in the comments of our readers.

The Federal Tax Service draws the attention of business owners to the fact that new information cannot be reflected on checks until January 1, 2021. All trading operations in December are carried out in accordance with the tax discipline of the current period, and with the onset of the next calendar year, the newly established +2% is entered into the check details and are displayed as 20% and 20/120 for deferred payment.

Updates to online cash registers can be installed in advance. Service centers update the cash register firmware in parallel with changing the fiscal data format if the FDF version on the equipment is earlier than 1.05 and 1.1.

Transfer of cash registers to VAT 20% and FFD 1.05 in 30 minutes from 1000 rubles!

Leave a request and get a consultation.

VAT increase: what threatens an increase in the tax rate for an entrepreneur

In addition to increasing VAT to 20%, the law logically introduces updated application standards - formal requirements for use and correct reflection in reporting and contracts.

303-FZ itself does not contain specific clarifications on accounting and drawing up additional agreements; such information is clarified by official letters from the Ministry of Finance.

1. What should an entrepreneur do if the purchase was made at the old rate, but the sale is planned from the beginning of next year with a new tax rate? When to start selling goods purchased in 2021, the business owner decides on his own. Trade in products paid for last year is not limited in any way - this is an individual decision of the entrepreneur. But such transactions will already be subject to the new rules. All sales from January 1, 2021 are subject to 20% VAT, regardless of when the trade product itself was purchased (Information letter on changes in the VAT rate No. 03-07-11/64577 dated 09/10/2018).
2. What to do if the advance payment was received by the supplier in 2021, and the actual shipment will be carried out in 2019? All property rights, products, works and services transferred, shipped, performed or provided from January 1, 2021 are subject to a tax of 20%. The presence of an advance payment is not a basis for applying the old calculation procedure and cannot serve as a reason for reducing the tax burden (Letter No. 03-07-05/55290 dated 08/06/2018).
3. How to correctly fill out returns for this tax if reporting for the first quarter next year will simultaneously reflect both rates? How are the issues of VAT deduction for 2021 regulated if the demand for deduction was not satisfied in the past year, but the legal grounds for collection remain? In both cases, 18% will be used (Letter No. 03-07-05/55290 dated 08/06/2018):
   • in the declaration it is necessary to report separately on the “old” and the increased tax;

   deduction will be made at the rate of 18%.

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Letter No. 03-01-11/60358 dated August 24, 2018 additionally mentions the voluntary choice of a taxation regime, including a special one.

What happens if you don't update your cash register?

Nothing good. Firstly, if you do not change the format of fiscal documents to the current version, the cash register may generally stop sending OFD data to the tax office . In the worst case scenario, this could be classified as operating without an online cash register at all. The fines for such tricks are the highest - from 30 thousand rubles for legal entities. Individual entrepreneurs will pay a little less - from 10 thousand. If the VAT rate is not changed from 18 to 20%, the violation falls under the article on the use of cash register equipment that does not meet the established requirements. For this, an individual entrepreneur will pay from 1.5 to 3 thousand rubles, and an organization will pay from 5 to 10 thousand.

Don’t forget that the cash register is online to keep all entrepreneurs under control. The tax office will see immediately that you have not changed the VAT amount - it only needs to make a request to the fiscal data operator.

But there is also good news. According to a letter from the Federal Tax Service dated December 13, 2021, no one will be fined during the first quarter . This time is given to those who did not have time to update their cash registers to work with the new VAT rate. According to some data, there are about 40% of the total number of registered online cash registers.

In this case, the VAT rate of 18 percent will be indicated on the cash receipt, but in all reporting documents the tax must be 20%. Selling goods and providing services also requires VAT of 20%.

If the shipment was in 2021, and a return is made in 2021

If the buyer returns an item, it is the seller who issues the adjustment invoice for the return. The document must indicate the rate not 20%, but 18%. And in the adjustment lines, the seller indicates those goods that the buyer wants to return.

Example:

In December 2021, the company sold goods worth 120,000 rubles to the buyer, including 18,000 rubles of VAT. But in January 2019, the buyer decided to return part of the purchases in the amount of 60,000 rubles.

The selling company must issue an invoice for 60,000 rubles. The accountant must indicate the VAT rate of 18% there, because the goods were sold in 2021 at the old rate.

How to switch to payments to suppliers? What to do with contracts?

Everything would be fine, if not for one “but”. Mutual settlements with suppliers, contracts and balance sheets are not reset to zero at the click of a finger from December 31 to January 1. There are a million options related to deferred payments, advances and prepayments. What to do if the goods were shipped in 2021 at a tax rate of 18%, and you will only pay for it next year, when VAT of 20% will apply to everything? And vice versa, did you pay in advance for products that will only be delivered to you next year? At what rate is it calculated?

The tax office itself answered these and many other questions in its explanatory letter dated October 23. The document explains the specifics of applying tax rates during the transition from 18% to 20. We will provide several examples from this letter.

Example 1 - the supplier delivers goods, fully paid for in 2021, only at the beginning of 2021. In this case, the tax on advance payment is calculated at the old rate of 18%, and the tax on shipment is calculated at 20%. In this case, the advance tax should be reduced.

Example 2 - the goods were delivered in 2018, but in 2019 the price for the already delivered products changes. In this case, as before, the seller makes changes to the adjustment form, and the tax is calculated based on the rate of 18 percent.

Example 3 - the buyer refuses the goods paid for in 2021 at the beginning of 2021. An adjustment form is also needed here. The seller issues an invoice for the refund amount using the old VAT rate of 18%.

If the payment was in 2021, and the shipment will be in 2021

In the case of prepayment, the calculation of tax during the transition period for VAT from 18 to 20% depends on whether the price is indicated in the contract with or without tax.

If you entered into a contract in 2021 and indicated a price in it taking into account a rate of 18%, but the shipment will be in 2021, you will have to pay VAT at a rate of 20%.

If the price is given without VAT, add it on top additionally. This is more profitable for the seller, since the tax will be increased at the expense of the buyer.

What if the contract does not directly indicate that VAT is not included in the price? Check the terms of the contract and the circumstances of its conclusion, including related correspondence. If it does not follow from all this that VAT is not included in the price specified in the contract, this will mean the opposite: it is included in this price. In this case, you will have to calculate the tax using the estimated method. This is an unfavorable situation for the seller: if the rate increases, the cost of goods will decrease, and it turns out that VAT increases at the expense of the supplier.

Some tips on how to act during the transition period

Tip 1 - close all transactions as much as possible before the end of the year. Pay suppliers for shipped goods before the end of the year. If possible, do not make advance payments so as not to get confused later.

Tip 2 - ask suppliers to deliver all orders by the end of the year. From the letter from the Federal Tax Service it is clear that goods supplied in 2021 are subject to 20% VAT, even if they were paid for in 2018. To avoid these difficulties, agree with your counterparties on shipment before the end of the current year.

Tip 3 - hire an accountant for the transition period. You can easily get confused yourself. If there are many suppliers and lots of goods, there is a risk of confusion with VAT rates during the transition period. An experienced specialist will take into account all the nuances and calculate taxes correctly. A very good option is to connect online accounting. Check with your bank to see if they provide this service.

Let us remind you: if you open an online store on the InSales platform, you don’t have to worry about accounting . Your website will have hundreds of ready-made integrations, including with online accounting. If you do this before the new year, then there will be no problems with the transition to new VAT rates. You can also transfer an already operating online store to the InSales platform, and then connect online accounting.

How to take into account the increase in the VAT rate from 18 to 20% in the contract?

Obviously, you can prepare for such a situation during the remaining period of 2021, when you will enter into contracts whose obligations you intend to fulfill after January 1. A safe and profitable option that will protect you from losses is not to indicate the VAT rate. Since it is increasing on the basis of a law that will come into force only on January 1 next year, when concluding an agreement this year there is no formal reason to indicate a rate of 20%. You can specify in the contract the procedure for forming the final price, that is, the cost of goods excluding VAT + an indication that VAT will be charged additionally at the rate established by clause 3 of Art. 164 Tax Code of the Russian Federation. This will mean that until December 31 the VAT rate will be 18%, and from January 1 - 20%.

Is it possible to make changes to the contract for 2019, which has already been concluded, if the VAT rate increases? First of all, agree on the terms with your partner. Then draw up an additional agreement with changes to the VAT rate in 2021. The same principle applies here as with contracts. When concluding an additional agreement in 2021, it is better not to indicate a specific VAT rate, but simply refer to the one established by the Tax Code.

When drawing up an additional agreement to the agreement on changing VAT from 2021, you can include other conditions in it. This will help avoid losses. So, you can agree and indicate early delivery (without specifying a reason) - until the VAT rate changes in 2019. This will be beneficial for you because you will be able to apply the 18% rate. Also, to soften the transition to 20% VAT for your regular customer, you can offer him a discount on shipment.