Overpayment of personal income tax. New clarifications from the Federal Tax Service on the refund procedure.

New rules for crediting and returning overpayments

From October 1, 2021, the provisions of Federal Law No. 325 of September 29, 2019 will come into force, which simplify the procedure for offset or refund of overpayments of taxes. Until October 1, tax authorities can redistribute overpaid taxes only within the budget of one type. Federal tax goes to the federal budget, regional tax goes to the regional budget, local tax goes to the local budget. For example, by overpaying VAT, a federal tax, you cannot pay off a debt on property tax, a local tax.

Starting from October, it will be possible to offset overpayments against future tax payments or pay off debts for another tax without reference to the budget level. For example, due to the income tax overpaid to the federal budget, it is possible to pay off arrears or a fine to the regional budget for transport tax or to the local budget for land tax.

If there is a tax debt to any budget - federal, regional or local - it is impossible to return the overpayment of taxes in money. The debtor, due to the overpayment, is obliged to first pay off his obligations for taxes, fines and penalties (Clause 6 of Article 78 of the Tax Code of the Russian Federation).

The rules for offset and refund of overpaid insurance premiums remain the same. For example, overpayment of pension insurance contributions cannot be “spread” onto social or health insurance contributions (clause 1.1 of Article 78 of the Tax Code).

How does overpayment of taxes occur?

Overpayment occurs due to errors either by the organization itself or by the tax authority.

Taxpayers themselves are wrong:

when calculating tax. Accounting may make a mistake when calculating the tax base, applying the wrong tax rate, or not applying tax benefits and deductions;
when filling out payment orders for the payment of taxes, penalties, and fines. Any error in the BCC or tax amount results in an overpayment for one tax and an underpayment for another.

Overpayment may occur due to advance payments. For example, a company transferred advances for income tax during the year, but at the end of the year the tax turned out to be less than the amount of the transferred advances. So the company overpaid income taxes.

Tax inspectors may mistakenly collect taxes twice. This occurs when a tax, fine or penalty is unilaterally written off from a current account. For example, the taxpayer has already transferred taxes, but the money has not yet reached the tax office. And the Federal Tax Service writes off the amounts without acceptance. Then there may be an overpayment.

Note! Overpayment of taxes must be recorded on the organization’s front card with the Federal Tax Service. If, for example, a company transferred taxes through a problem bank, but they did not go to the budget, it will not be possible to offset or return them.

The courts believe that recognition of the obligation to pay a tax as fulfilled does not give rise to the taxpayer’s automatic right to return or offset the amount of such tax.

They confirmed that the taxpayer does not have the right to compensate for his losses at the expense of the budget (Determination of the Supreme Court of the Russian Federation No. 307-KG18-10845 of August 8, 2021).

How to find out about an overpayment

Both the taxpayer himself and tax inspectors can find overpayments of taxes. You can order a reconciliation report from the tax office or check your transfers in your personal account on the Federal Tax Service website. Within five working days after submitting the documents, tax officials must issue a reconciliation report and send it to the taxpayer.

If the tax authorities were the first to discover the overpayment, they are obliged to notify the organization - within 10 working days they must send a written message and indicate the date the overpayment was discovered (clause 3 of Article 78 of the Tax Code of the Russian Federation). The date of discovery of the overpayment is the day when the inspector discovered the excess for a particular tax. Regardless of whether the tax inspectorate informed the taxpayer about the fact of an overpayment or not, the overpayment can be disposed of within three years from the date of occurrence.

Taxes to the budget for the taxpayer can be transferred by any other person - an organization, an entrepreneur or a citizen without the status of an individual entrepreneur (paragraph 4, paragraph 1, article 45 of the Tax Code). But only the taxpayer himself has the right to return the excess or offset the payment. Third parties cannot do this (paragraph 5, paragraph 1, article 45 of the Tax Code).

Sample application for refund of overpaid tax

First, in the upper right part of the document, information about the addressee of the application and its author is indicated. Here is the name and number of the specific tax service, as well as information about the taxpayer:

If we are talking about an individual entrepreneur or any other citizen of the Russian Federation, then it is enough to indicate his personal data:
TIN,
residence address (according to passport)
and a contact phone number (in case the tax officer needs any clarification).
If the application is made on behalf of an organization, then you need to write:
its full name,
TIN,
Checkpoint (in accordance with the constituent documents),
legal address
and also a telephone number for communication.

The main part of the document concerns overpaid tax.

First, there is a link to the article of the law that allows the return of overpaid amounts.
Then you should note the nature of the overpayment: was the money paid voluntarily or collected, as well as the name of the tax levy.
After this, the tax period for which the overpayment occurred is entered and the tax code according to the KBK (budget classification code) is indicated - it has periodically changing individual indicators for each tax and the OKTMO code (depending on the territory in which the tax payment was made).
Next, in numbers and in words, the amount that the taxpayer considers overpaid and the account details for the refund are entered into the form:
his correspondent check,
BIC, INN, KPP,
taxpayer's current account number.
After this, in the line “Recipient” the last name, first name and patronymic name of the individual entrepreneur or citizen or the name of the organization submitting the application are indicated.
Finally, the form must be dated and signed.

How can you manage your overpayment?

If an organization or individual entrepreneur has identified an overpayment of taxes, then the excess can be offset against the debt, left in a personal account with the Federal Tax Service for future payments, or the money returned to the current account. Let's consider each point separately.

Credit for arrears

If there is arrears on other taxes, fees, fines, penalties, inspectors will first pay off the arrears to the budget through overpayments. The inspectorate independently decides which tax debt can be closed and informs the organization. But they can only dispose of overpayments that are no more than three years old.

An organization can independently submit an application for credit indicating a specific tax. It is advisable to reconcile the calculations with the budget before doing this. If the amount indicated in the application does not coincide with the data of the tax office, the tax authorities will return the application.

The tax office makes a decision on offset or refusal to offset overpaid amounts against arrears within 10 working days:

from the moment the overpayment was discovered, if the organization did not apply to the inspectorate with an application for credit against a specific tax;
from the date of receipt of an organization’s application for credit against a specific tax, if the organization has submitted such an application;
from the date of signing the act of reconciliation of calculations with the budget, if the inspection and the organization carried out a reconciliation;
from the moment the court decision comes into force, if the organization has achieved offset through the court;
from the day following the day of completion of the desk tax audit, which took place without additional assessments;
if a desk audit revealed violations - from the day following the day the decision entered into force.

Credit towards future payments

If there is no arrears, you need to send an application to the inspectorate for crediting money using the approved KND form 1150057. Applications for crediting taxes overpaid to regional budgets at the location of separate divisions of the organization can be submitted both to the tax inspectorate at the location of the organization and to the tax inspectorates at location of separate units.

The application deadline is within three years from the date of payment of the excess tax or contribution. The application must be accompanied by documents confirming the overpayment - a payment order or an updated declaration. The tax office must make a decision on the offset within 10 working days from the date of receipt of the application from the organization.

Overpayments cannot be counted against future payments of taxes, fees, penalties and fines by other taxpayers. Such offset of Tax Code is not provided (letter of the Ministry of Finance dated March 6, 2017 No. 03-02-08/12572).

What can you do about overpayment of personal income tax?

It is, of course, possible to refund the amount of overpaid personal income tax in 2021. However, you need to pay attention to why an organization or individual entrepreneur has overpaid income tax and what you want to do with this overpayment. Let's explain with examples:

an organization or individual entrepreneur mistakenly paid an excess amount of personal income tax to the budget and wants to offset it against arrears of personal income tax or future tax payments;
An organization or individual entrepreneur mistakenly contributed an extra amount of personal income tax to the budget. Now there is a desire to return it to the bank account;
The Federal Tax Service has collected an excess amount of personal income tax from an organization or individual entrepreneur, and the taxpayer wants to return it.

Let us say right away that if you transferred personal income tax before the established deadline, then it can be returned, offset against arrears for this tax, as well as against arrears and future payments for other federal taxes. But offsetting the overpayment against future personal income tax payments is undesirable. Let us explain why.

To return the overpayment for personal income tax, no later than three years from the date of payment of the tax, submit to the Federal Tax Service an application, an extract from the personal income tax register and a payment order for tax payment (Letter of the Federal Tax Service dated 02/06/2017 No. GD-4-8/2085).

Why offset against future personal income tax payments is undesirable

Personal income tax is an income tax that employers pay for their employees as a tax agent. Therefore, this tax must be preliminarily (before payment) withheld from income. This can only be done on the day when the organization issued money from the cash register or transferred it to employees’ bank accounts. Tax agents cannot pay tax at their own expense due to paragraph 9 of Article 226 of the Tax Code of the Russian Federation. This is confirmed by Letter of the Federal Tax Service dated February 6, 2017 No. GD-4-8/2085. Therefore, some tax inspectors regard personal income tax received ahead of schedule as an “erroneous” payment. And they don’t even consider it a tax. And therefore it cannot be counted against future personal income tax accruals.

Overpayment can be applied to future payments for other taxes

An extra (erroneous) personal income tax payment can be offset against future payments for other taxes. For example, for VAT or income tax. This is due to the fact that such taxes are paid from one’s own funds. And they can be paid ahead of schedule (Letter of the Federal Tax Service of Russia dated February 6, 2021 No. GD-4-8/2085).

You can also simply return the overpayment of personal income tax. How to do this in 2021? We'll talk about this later.

Refund of overpayment

To return money to the current account, the organization submits an application in the KND form 1150058 within three years from the date of the overpayment. To make a decision, inspectors have 10 working days from the moment they receive the application or sign the reconciliation report. After 5 working days, tax authorities are required to inform the organization or individual entrepreneur about the decision made (clause 9 of Article 78 of the Tax Code). After a month, return the overpayment to your bank account. If the taxpayer made a mistake and provided incorrect details, the refund will be processed after clarification.

Refund of overpaid taxes is a right, not an obligation, of the taxpayer. An organization or individual entrepreneur can waive their right, which does not contradict paragraph 6 of Art. 78 of the Tax Code of the Russian Federation (letter of the Ministry of Finance of Russia No. 03-07-11/63803 dated December 11, 2014).

Deadlines for refunding overpaid tax

There is a clearly limited period for filing an application for a refund of overpaid tax: three years.

If the fact of the overpayment was discovered later or the taxpayer for some reason was unable to apply for a refund within this period, it will hardly be possible to do anything in the future.

If the application is submitted on time and in accordance with all the rules, and the tax office did not have any questions and agreed with the taxpayer’s request, the refund must be made no later than a month after filing the application.

If the overpayment is more than three years old

An organization can offset or return an overpayment within three years from the date of payment of the excess tax amount. The payment date is calculated differently. For example, for VAT, which is paid without advance payments, the three-year period will be counted from the date of transfer of the tax. And for income tax, which provides for advance payments, the period will be calculated from the moment of filing the declaration.

If the organization missed the deadline for filing an application, you can go to court. When considering a case in court, the limitation period of 3 years will be calculated according to the norms of civil, and not tax legislation. And the countdown of the period does not start from the moment of payment of the excess amount, but from the moment when the organization learned or should have known about it (clause 1 of Article 200 of the Civil Code). But you will have to prove that you learned about the overpayment later than it occurred. And it's not that simple.