Conditions for the benefit
Amounts paid by employers for the provision of medical services to their employees are not subject to personal income tax if they are transferred from funds remaining with the organization after paying income tax.
The source of payment is the first condition for exempting such income from personal income tax. In addition, to be exempt from personal income tax, it is necessary to comply with the conditions for paying expenses.
Let's return to the norm of the Tax Code of the Russian Federation. Although it may not be obvious, the deciding factor for the exemption is that the medical services must be paid for by the employer. The medical institution must receive company funds allocated specifically for medical services. The financiers also spoke about this in the letter dated December 3, 2018 No. 03-04-05/87037, which is referenced in the commented letter.
Decor
The procedure for completing documents for reimbursement of treatment costs depends on the order in which it was decided to compensate for such costs. For example, the company has a social package. This condition must be fixed (Articles 41, 57 of the Labor Code of the Russian Federation):
- in a collective agreement, if such compensation is due to all employees of the enterprise;
- in the employment contract, if compensation is provided only for some employees.
For one-time actions to pay for treatment, it is enough to issue an appropriate order from the general director or individual entrepreneur. Such an order is issued in response to an employee’s application . Documents confirming expenses must be attached to the application (letter of the Ministry of Finance dated April 13, 2007 No. 03-04-06-01/118). The legislation does not establish a specific list of documents. In practice, these can be contracts with medical organizations, certificates of treatment, checks confirming payment (letter of the Ministry of Finance dated July 26, 2008 No. 03-04-06-01/182).
Compensation is a violation
The Tax Code of the Russian Federation does not provide for such a form of payment for medical services as compensation to an employee for expenses incurred for medical purposes. That is, the company must either transfer money to the medical institution in a non-cash manner, or give it to the employee from the cash register or transfer it to a card. And the employee must pay the medical institution with the money received. If this procedure is followed, there is no need to pay personal income tax. That is, if the listed conditions are met, amounts of payment for medical services for employees are exempt from personal income tax. Otherwise, such income is subject to personal income tax in accordance with the general procedure.
Insurance premiums
If the employer pays for the trip for the employee himself, then insurance premiums for sanatorium treatment will have to be calculated. Tariffs for calculation are general, that is, those that the organization applies to employee salaries. In relation to vouchers purchased for close relatives of subordinates, insurance coverage is not required.
The opinions of the courts on this matter differ from the position of the tax authorities. Judges recognize such company expenses as not subject to insurance premiums (Resolution of the Arbitration Court of the North-Western District dated June 20, 2017 No. F07-5516/2017, Determination of the Supreme Court of the Russian Federation dated November 3, 2017 No. 309-KG17-15716). Representatives of the judicial system justified their position with the provisions of the ineffective law No. 212-FZ. Tax officials, citing the fact that Law No. 212-FZ has lost force, consider the position to be unlawful (Letter No. BS-4-11 dated September 14, 2017 / [email protected] ). Therefore, you will have to pay insurance premiums. Or prove your position in court.
How to replace compensation
The Tax Code of the Russian Federation also provides for the exemption from personal income tax for income not exceeding 4,000 rubles per tax period in the form of amounts of material assistance to employees (clause 28 of Article 217 of the Tax Code of the Russian Federation). Financial assistance can be provided if the employee pays for his own treatment.
Financial assistance is exempt from taxation, regardless of the basis and sources of its payment.
But an amount exceeding 4,000 rubles is subject to personal income tax. And this is still better than withholding tax on the entire compensation amount. Insurance premiums will also have to be charged on the excess amount. Example.
Calculation of compensation for the cost of treatment in the form of financial assistance A company employee, having been discharged from the hospital, wrote an application to the accounting department with a request to reimburse him for the cost of treatment.
He paid 7,000 rubles from his own funds on the clinic’s account. The company decided to reimburse the employee for this amount, but only in the form of financial assistance. To do this, the employee was asked to rewrite the application for reimbursement of medical expenses with a request for financial assistance. The company pays contributions for insurance against industrial accidents and occupational diseases at a rate of 3.1%, and mandatory insurance contributions at a general rate of 30%. The accountant will make entries: Debit 91-2 Credit 70
- 7000 rub.
– financial assistance has been accrued to the employee; Debit 91-2 Credit 69-1-2
– 93 rub.
((RUB 7,000 – RUB 4,000) × 3.1%) – contributions for insurance against accidents and occupational diseases are assessed for an amount of financial assistance exceeding 4,000 rubles; Debit 91-2 Credit 69-1-1
– 900 rub.
((7000 rubles – 4000 rubles) × 30%) – insurance premiums are charged for the amount of financial assistance exceeding 4000 rubles; Debit 70 Credit 68, subaccount Personal income tax payments
– 390 rubles.
((RUB 7,000 – RUB 4,000) × 13%) – personal income tax is withheld from the amount of financial assistance exceeding RUB 4,000; Debit 70 Credit 51
– 6610 rub. (7000 – 390) – financial assistance is transferred to the employee.
An organization has decided to pay an employee for expensive treatment: how to take into account the costs?
The company decided to provide assistance to several employees who require expensive treatment.
What ways are there other than paying financial assistance? How can an accountant account for incurred expenses? Payment for treatment from net profit
According to paragraph 10 of Article 217 of the Tax Code of the Russian Federation, amounts paid by employers for the provision of medical services to their employees, their spouses, parents, children (including adopted children), wards under the age of 18, as well as their former employees who resigned due to with retirement due to disability or old age, and remaining at the disposal of employers after paying corporate income tax.
Thus, if an organization transfers directly to a medical institution that provides expensive treatment an amount for the provision of medical services, then this amount will not be subject to personal income tax. However, such an amount cannot be taken into account as expenses for income tax purposes.
True, insurance premiums for compulsory insurance will have to be charged for this amount, since exemption from paying insurance premiums in this case is not provided for by Article 9 of Federal Law No. 212-FZ of July 24, 2009.
Expenses in the form of insurance contributions for compulsory pension, social and medical insurance, including those accrued on amounts paid out of net profit, are included in expenses when taxing the profits of organizations on the basis of subparagraph 1 of paragraph 1 of Article 264 of the Tax Code of the Russian Federation.
Providing an employee with an interest-free loan with subsequent forgiveness of the debt or transferring the amount necessary for treatment under a gift agreement
Income arising when a debt is forgiven under a loan agreement is not subject to insurance premiums for compulsory insurance (Article 7 of Federal Law No. 212-FZ of July 24, 2009).
But in this case, when the debt is forgiven, the employee receives economic benefit (income) in the form of the amount of the forgiven debt under the loan agreement, which is subject to personal income tax at a rate of 13%.
If income arises in the form of a gift, the personal income tax base can be reduced by 4,000 rubles. on the basis of paragraph 28 of Article 217 of the Tax Code of the Russian Federation.
The amount of the forgiven loan is not included in income tax expenses.
For more information about the loan agreement, see the Directory “Agreements: conditions, forms, taxes” in the “Legal Support” section in the 1C:ITS Information System
Material aid
If you decide to provide financial assistance to an employee to pay for expensive treatment, then an amount exceeding 4,000 rubles will be subject to personal income tax of 13% (clause 28 of article 217 of the Tax Code of the Russian Federation) and insurance premiums for compulsory insurance (part 11 of article 9 of the Federal Law of July 24, 2009 No. 212FZ).
Expenses in the form of amounts of material assistance to employees are not taken into account for profit tax purposes (Clause 23, Article 270 of the Tax Code of the Russian Federation).
Expenses in the form of insurance contributions for compulsory pension, social and medical insurance, including those accrued on amounts paid out of net profit, are included in expenses when taxing the profits of organizations on the basis of subparagraph 1 of paragraph 1 of Article 264 of the Tax Code of the Russian Federation.
For information on how to calculate financial assistance in 1C programs, read the Directory “Personnel accounting and settlements with personnel in 1C programs” in the “Personnel and remuneration” section in the 1C:ITS Information system
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Payment for medical services for a relative of an employee of the organization. Personal income tax.
Nevertheless, here the interests of the employee and the employer can still coincide. The reason for this is the issue of payment of unified social tax.
UST, insurance pension contributions and contributions for insurance against industrial accidents. Let us recall that in paragraph 1 of Art. 236 of the Tax Code of the Russian Federation establishes that the object of taxation when calculating the unified social tax for taxpayer organizations is recognized as payments and other remuneration accrued by them in favor of individuals under employment and civil law contracts, the subject of which is the performance of work or the provision of services.
In paragraph 1 of Art. 237 of the Tax Code of the Russian Federation states that when determining the tax base for the unified social tax, any payments and remuneration are taken into account, regardless of the form in which these payments are made, in particular, full or partial payment for goods, work or services intended for an individual employee.
However, in paragraph 3 of Art. 236 of the Tax Code of the Russian Federation determines that the payments and remuneration specified in paragraph 1 of the same article - regardless of the form in which they are made - are not recognized as an object of taxation if for taxpayer organizations such payments are not classified as expenses that reduce the tax base for the tax on profit in the current reporting or tax period.
Meanwhile, in light of the fact that, as it turned out, the company’s expenses for the treatment of employees, if provided for in an employment or collective agreement, can be taken into account when calculating income tax, an unexpected problem arose.
The fact is that if, according to tax legislation, payments to employees can be recognized as income tax expenses, then the enterprise must charge a single social tax on these payments. This opinion was expressed in paragraph 3 of the Information Letter of the Presidium of the Supreme Arbitration Court of the Russian Federation dated March 14, 2006 No. 106.
Then it turns out that if the Russian Ministry of Finance “allowed” the recognition of treatment expenses provided for by labor or collective agreements in tax expenses, then now the unified social tax must be charged on them?
If we think logically, it turns out that this is so.
At the same time, in accordance with paragraph 2 of Art. 10 of Law N 167-FZ, the object of taxation of insurance premiums and the basis for calculating insurance premiums are the object of taxation and the tax base according to the Unified Social Tax. It follows from this that insurance pension contributions will also have to be calculated.
Let's move on to premiums for insurance against industrial accidents.
According to paragraph 1 of Art. 5 of Law N 125-FZ, persons subject to such social insurance include “individuals performing work on the basis of an employment agreement (contract) concluded with the insured.” This means that funds paid to the employee's family members cannot be subject to these contributions.
The object of taxation of these insurance premiums is stated in Resolution No. 184. It says that insurance premiums are calculated on the accrued wages (income) of employees on all grounds. Resolution No. 765 exempts you from paying these contributions. Resolution No. 184 proposes to be guided by it. It says nothing about paying for treatment of employees at the expense of the employer. This means that these funds are subject to insurance premiums against accidents at work.
It turns out that it is more profitable for the organization not to stipulate the possibility of paying for the treatment of its employees in the texts of the employment or collective agreement (since such expenses can be considered as labor costs), but to make these expenses, formalizing them as payments from the profits remaining at the disposal of the enterprise .
In this case, there is no need to withhold personal income tax, no need to accrue unified social tax and insurance pension contributions, and no need to even accrue contributions for insurance against industrial accidents. Only corporate income tax will be sacrificed.
In addition, in this case the level of social protection of the workers themselves is sharply reduced. After all, if the obligation to pay for treatment is documented, then the employee can in some way be sure that he will not be left without financial support. And if there is no such documentary agreement, then everything remains at the discretion of the employer himself.
Accounting
If we recognize the costs of treatment of employees as an integral part of the costs of paying them, then such expenses of the organization, according to paragraph 5 of PBU 10/99, will be classified as expenses for ordinary activities. That is, we must use account 70, cost accounts, etc.
If an organization pays for such treatment using the profits remaining at the organization’s disposal after taxation, the picture will change.
If an organization issues money to an employee from the cash register or transfers it to his current account, the accounting will look like this.
In accordance with the Chart of Accounts, account 73 is intended to summarize information on all types of settlements with employees, except for settlements with wages and settlements with accountable persons. The issuance of money to an employee intended to pay for upcoming treatment is reflected in the debit of account 73 and the credit of account 50 ( or 51).
To issue money from the cash register, the employee will need an order from the head of the organization and an expense cash order. And in order for this debt to be written off from the employee, he must present documents confirming the treatment.
Until the employee submits documents confirming treatment by a medical institution, this amount must be recorded as a debt owed to the employee. After receiving supporting documents, the costs of paying for the operation must be written off at the expense of the appropriate sources of their financing, that is, in this case, at the expense of retained earnings.
The allocation of funds from retained earnings to pay for employee treatment expenses is reflected in the debit of account 84 and the credit of account 73.
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Personal income tax
In accordance with paragraph 10 of Art. 217 of the Tax Code of the Russian Federation exempts from taxation the amounts paid by employers, remaining at their disposal after paying income tax, for treatment and medical care of their employees, their spouses, their parents and their children, provided that medical institutions have the appropriate licenses, as well as the availability of documents, confirming the actual costs of treatment and medical care.
The specified income is exempt from taxation both in the case of non-cash payment by employers to medical institutions of expenses for treatment and medical care of taxpayers, and in the case of issuing cash intended for these purposes directly to the taxpayer (members of his family, parents) or crediting funds intended for these purposes are transferred to taxpayers' accounts in banking institutions.
We emphasize that this procedure applies only when compensation is made from funds remaining in the company after paying income tax.
The Ministry of Finance of Russia in Letters dated December 1, 2010 N 03-04-06/6-285, dated October 21, 2008 N 03-04-06-01/311 explained that the possibility of full or partial payment by the employer for treatment without taxation of personal income tax amounts is not associated with a decrease in the tax base for income tax, and with the availability of funds from the organization after paying income tax, from which payment is made. Therefore, in order to exempt from personal income tax the amount of payment for the treatment of employees, the organization must have a profit as such, and the funds necessary to pay the above amounts must be generated after paying income tax. This can be either a specially created fund or simply the company’s retained earnings.
The Tax Code of the Russian Federation does not contain a definition of what “funds remaining at the disposal of the employer after paying income tax” are, so we will use the norm of paragraph 1 of Art. 11 of the Tax Code of the Russian Federation: institutions, concepts and terms of civil, family and other branches of legislation of the Russian Federation, used in the Tax Code of the Russian Federation, are applied in the meaning in which they are used in these branches of legislation.
In fact, these funds are profit remaining at the disposal of the organization, which, in accordance with clause 83 of the Regulations on accounting and financial reporting in the Russian Federation (approved by Order of the Ministry of Finance of Russia dated July 29, 1998 N 34n) is defined as the financial result identified for the reporting period period, minus established taxes and other similar payments due from profits.
The amount of profit remaining at the disposal of the organization (retained earnings) is reflected in line 1370 “Retained earnings (uncovered loss)” of the balance sheet presented at the end of the first quarter, half a year, 9 months and calendar year.
Thus, if an organization compensates for treatment costs precisely from such amounts (i.e., in previous periods there was undistributed profit), personal income tax should not be withheld from the income of an employee for whom the organization paid for treatment. If the company does not have retained earnings for previous periods, then compensation for treatment expenses in amounts exceeding 4,000 rubles. for the tax period, will be subject to personal income tax as financial assistance.
Taxation Income tax
To labor costs for the purposes of Sec. 25 of the Tax Code of the Russian Federation includes, in particular, accruals of an incentive nature, including bonuses for production results, bonuses to tariff rates and salaries for professional excellence, high achievements in work and other similar indicators (clause 2 of Article 255 of the Tax Code of the Russian Federation). Expenses associated with the payment of compensation to workers for the cost of paid medical services are not included in this list.
The Ministry of Finance of Russia in Letter dated 02/05/2008 N 03-03-06/1/81 explained that, according to Art. 270 of the Tax Code of the Russian Federation when determining the tax base are not taken into account:
- any types of remuneration provided to management or employees, with the exception of remuneration paid on the basis of employment agreements (contracts);
- bonuses paid to employees from special purpose funds or targeted revenues;
- amounts of financial assistance;
- amounts of payment for additionally provided vacations (in excess of those provided for by current legislation);
- payment for vouchers for treatment and recreation, excursions, classes in sports sections, visits to cultural, entertainment and sporting events; subscriptions (except for subscriptions to literature used for production purposes); goods for personal consumption of workers; other similar expenses for the benefit of employees.
The listed expenses are not taken into account for tax purposes, even if they are provided for by labor and (or) collective agreements (Letters of the Ministry of Finance of Russia dated March 12, 2008 N 03-03-06/1/169, dated February 20, 2008 N 03-03-06/1 /120).
Expenses associated with payments to employees compensation for the cost of paid medical services are not recognized for profit tax purposes as “other similar expenses in favor of employees” (Letter of the Ministry of Finance of Russia dated March 12, 2008 N 03-03-06/1/169).
