Some illiterate taxpayers are wondering how to apply for a VAT refund for individuals, and how much they are entitled to. To answer this question, we have prepared special material explaining what error lies here and how to get the money you are entitled to.
VAT refund for individuals
How to return VAT to an individual
It is necessary to understand what VAT is. So, the required abbreviation stands for value added tax. This fee is deducted from the added value of any product sold by the seller. In other words, the seller produces or purchases any product for further sale. To obtain a benefit, he adds a certain monetary value to the initial cost of a unit of production, and then takes this difference for himself.
From the definition it is clear that value added tax cannot be directly related to the ordinary citizen and layman. There is, however, an indirect relationship. Despite the fact that payments of value added tax are borne by sellers, that is, various organizations, the burden of the tax burden is actually borne by buyers, since they are forced to pay for a product, the price of which includes the price of its manufacture, delivery, the seller’s income and the amount of tax deductions.
It turns out that a VAT refund to an individual is not possible. However, you can return personal income tax - a tax on the income of an individual, deducted to the state treasury from all income received by taxpayers. This category includes not only wages, but also:
- funds received from the sale of housing;
- money for selling a car;
- inheritance received;
- winning the lottery;
- material assistance and other funds received by the citizen.
Let's take a closer look at the characteristics of personal income tax and talk about how to get a partial refund.
Reviews of people who “received” a VAT refund on their card!
You can only see positive reviews on scam sites, but in fact, no one has received even one ruble on their card, not to mention the amounts that the scammers promise!
People write that they were deceived out of money, losses ranging from 270 to 30,000 rubles. As a result, no one received the promised VAT compensation.
What is personal income tax
If a citizen receives money that acts as income, he is obliged to give part of it to the state, which then uses the funds received to improve the level of well-being of the country. The current tax rate today is 13% of the amount received. This deduction is a tax on the income of an individual.
What is personal income tax?
According to the letter of the law, the tax period for personal income tax is the calendar year. The amount due to the homeland is calculated based on the following two indicators:
- the amount of taxable money;
- rates of 13%.
When it comes to withdrawing part of the funds from an employee’s salary, bonuses received by him and other income at the place of employment, tax agents, that is, employing organizations, are responsible for transferring and calculating the amounts. The procedure is carried out with the help of specialists from the company’s accounting department, and the following is recorded:
- all money received in favor of the employee;
- tax deductions provided;
- funds calculated for sending;
- funds actually sent.
VAT refund procedure: stages
VAT refund occurs as follows:
- documents are submitted to the Federal Tax Service;
- the fiscal authority checks the papers;
- a decision is made;
- money is returned.
Stage No. 1. If the amount of tax deductions is greater than the VAT payable, a tax refund application is submitted. The following documents will be required:
- Handwritten statement.
- Declaration indicating the amount of return.
Stage No. 2. After submitting the application, tax specialists conduct an audit. At this time, additional documents may be needed: acts, invoices, contracts. If there are no violations, the tax service makes a decision within a week.
Stage No. 3. After receiving the notification, the Federal Tax Service confirms the right to receive a full or partial VAT refund.
Stage No. 4. If a positive decision is made, funds are credited to the company's account. This happens within 24 hours after the decision to return is made.
On video: Calculation of VAT in Kazakhstan
What are the rates?
We mentioned above that there is a set rate for the required tax collection - 13% of the amount received. However, it is really only for so-called residents of the Russian Federation - citizens who stay in the country for at least 183 days per year.
Let's give an example. You are a resident of Russia because you live on its territory for the prescribed period of time. Your place of employment is in the Lastochka candy manufacturing company; you are the company’s advertising manager. The promised salary for the desired position is 40 thousand Russian rubles. However, you will not be able to receive the full specified amount every month, since you are required to give the state 13% of it, that is, 5 thousand 200 rubles. As a result, the salary ceases to please so much and approaches the value familiar to the common man, amounting to 34 thousand 800 units of Russian currency.
What amount of deductions are due to other citizens who are not residents of the country? Seriously exceeding the previously stated rate. Non-residents of Russia give the state 30% of their income, an amount that is simply unbearable for many.
This applies not only to wages, but also to more serious amounts. Let's imagine that you are not a resident of the Russian Federation, but own an apartment on its territory. After selling housing from the funds received, if the deadline for exemption from the required payment was not waited, you will have to pay not 13%, but the entire 30%, to the country’s treasury. Such a payment will seriously hit your pocket. You have only one option - to postpone the implementation and acquire resident status, and then resume the process again.
There is also a separate category of payments, implying profit distributed among the members of a joint-stock company or other entity, issued to persons in the composition in proportion to the securities they have. This profit also has an official name - dividends. According to the letter of the law, residents of the country pay deductions from them in the amount of 13% of the amount.
For cash prizes coming from any source and exceeding 4 thousand Russian rubles, the current royalty rate will be 35%.
"Cameralka" revealed violations
If the tax authority reveals violations of the legislation on taxes and fees, it will first draw up a desk tax audit report. He is given 10 working days for this, plus another five to deliver the act to the taxpayer. After receiving it, the taxpayer will have 15 working days to prepare his objections to the act and correct the shortcomings that the inspectors discovered. After another 10 working days after considering the act and objections to it, the tax authority will make a decision on refund or refusal of VAT refund. Moreover, the decision can be made both for the entire amount and for part of it.
As you can see, the time frame for making a final decision on compensation in the event of tax claims increases significantly. After the end of the desk audit, it is postponed for at least another 40 working days, i.e. for almost two months! This is where the first pitfall of the VAT refund procedure lies.
The fact is that the tax authorities were convinced that if, as a result of a desk audit of the declaration, violations were revealed in at least part of the amounts for which the payer is claiming refund (and it doesn’t matter that there are claims only for 100 rubles of the tax claimed for refund, but a million is confirmed! ), then the entire tax claimed for reimbursement is not transferred to him until the decisions specified in paragraph 3 of Art. 176 of the Tax Code of the Russian Federation. In their opinion, this rule also applies to that part of the VAT in respect of which no comments were made and, accordingly, there is no reason to say that the refund deadlines are violated and the taxpayer is owed interest for late returns.
However, the Presidium of the Supreme Arbitration Court of the Russian Federation (Resolution No. 14883/10 of April 12, 2011) considered this interpretation to be erroneous. He indicated that clause 3 of Art. 176 of the Tax Code of the Russian Federation indeed provides that in the event that violations are revealed during a desk audit, VAT is reimbursed in a special manner based on a decision of the tax authority, made in compliance with the procedure for audit materials, defined in Art. Art. 100 and 101 of the Tax Code of the Russian Federation. However, this does not give grounds to assert that the provisions provided for in paragraph 3 of Art. 176 of the Code, the procedure for reviewing inspection materials covers episodes in respect of which no violations were found. Consequently, the tax authority does not have the right, at the end of the audit, with reference to clause 3 of Art. 176 of the Tax Code of the Russian Federation to postpone the return of part of the VAT, in respect of which no violations have been identified, until an inspection report is prepared or decisions are made on reimbursement and refund of the tax. In part of this amount, clauses 2, 7 and 8 of Art. 176 of the Tax Code of the Russian Federation, and its return must be made within 12 days (seven days are allotted for making a decision on the reimbursement and return of the corresponding amount of tax and five days for the execution of the order by the treasury).
Moreover, Resolution No. 14883/10 directly stated that the interpretation of legal norms contained therein is generally binding and is subject to application when arbitration courts consider similar cases.
In 2012, for those tax authorities and judges who did not want to listen to his opinion, the Presidium of the Supreme Arbitration Court of the Russian Federation once again reminded that its position on this issue is unchanged.
Thus, his Resolution dated March 20, 2012 N 13678/11 states that the provisions of paragraph 3 of Art. 176 of the Tax Code of the Russian Federation should not apply to that part of the tax amount claimed for reimbursement in respect of which no violations of tax legislation were identified and, accordingly, there were no real obstacles to its return. Consequently, there is no reason to delay the return of this amount until an inspection report is prepared or a decision on compensation is made in accordance with paragraph 3 of this article.
Objects subject to taxation
Let's take a closer look at how the law defines the objects of personal income tax taxation. Their list includes the following names.
What objects are subject to tax deductions?
Object 1. For a resident of the country, the object subject to tax calculation is, first of all, income expressed in cash. In this case, the sources of its receipt may be:
- in the country;
- outside the country.
Object 2. For non-residents of Russia, the role of taxable income is profit received on its territory.
In addition to labor payments, you will have to part with part of the money if they are presented:
- copyright payments;
- rental payments;
- funds received as a result of the successful sale of property, vehicles, securities and similar cash receipts.
However, the following items do not apply to taxable objects.
- Money paid by government agencies as support to socially vulnerable categories of citizens.
- Funds received as pension accruals.
- Compensation upon dismissal of an employee for damage caused to his health.
- Child support payments that a person makes to a child living with the other parent or other relative.
- Scholarship payments to students of higher educational institutions.
- Funds received as remuneration by the donor.
- A sum of money in the format of a grant issued as supporting funds for programs of the following nature: educational;
- scientific.
Who is the payer of personal income tax?
The obligation to contribute, at a time specified by law, to the general budget of the state treasury amounts of the established amount is imposed on persons of the following categories:
- having Russian citizenship;
- foreigners temporarily or permanently residing in our country;
- persons who have no citizenship.
Persons paying tax also include individual entrepreneurs, since they are also listed as individuals, it turns out that they must transfer the required tax on cash receipts, which are the company’s revenue.
Tax payments are subject to payment not only for persons who have reached the age of majority, but also for younger persons. They cannot pay taxes on their own until they reach adulthood, so the function of payer is taken over by parents or organizations from which the individuals in question receive funds.
We mentioned above that basically the categories of payers are divided into two most important groups:
- residents;
- non-residents.
At the same time, certain categories of citizens who are not subject to this division are excluded from the groups; they always have the status of residents, even though they have not appeared on the territory of their homeland for years.
We are talking, first of all, about representatives of the structures:
- military;
- state
Representatives of each of these categories can be sent and serve in other countries for years, without being able to appear in their homeland in order to maintain current resident status. Thanks to a special decree of the government, their status cannot be lost as long as the person remains in a position in the desired structure or another that is of a similar nature and provides similar privileges.
How to understand that an offer comes from scammers
How to distinguish offers coming from the state from fraudulent schemes:
- you need to look for information about the mentioned government agency, law or Decree of the Government of the Russian Federation. The specified regulations simply do not exist, this can be seen even from their details; such a numbering system is not used in the Russian Federation;
- the site itself also inspires mistrust; the sites of government agencies and reputable public organizations are not designed in this way;
- You can check whether the organization indicated on the website exists by name. There is a possibility of such a search on the website of the Federal Tax Service of the Russian Federation. Needless to say, no data about her will be found;
- payment of funds by the state is made in accordance with administrative regulations, which are approved at the level of the Government of the Russian Federation, and require the recipient to provide a package of documents through the MFC, the State Services website or directly to the government authority.
Thus, if you follow the basic rules of caution, it is quite easy to recognize the actions of scammers.
Reporting
As for most other types of tax levies, and for personal income tax, it is necessary to submit various reporting documents for verification. Depending on the method of acquiring funds, various documents must be prepared. Most often, it is necessary to prepare a certificate in form 2-NDFL, containing data on all income issued to the employee at the workplace and tax deductions sent to the treasury for a year.
Note! The payer does not have to prepare the required paper himself; this will be done by the tax agent, that is, the employing company.
The deadline for submitting reports for all employees working in the company is April 1 of the year following the reporting period. It is mandatory to prepare two copies of the certificate.
According to the main body of information regulating tax legal relations in the country, people who receive income are required to declare income:
- from the activities of individual entrepreneurship;
- from owning private notary or law firms;
- from the received winnings, the value of which exceeds 4 thousand Russian rubles;
- from tax agents on staff;
- from tax agents, while receiving funds from which tax was not calculated;
- from the sale of real estate, cars and other property and in other cases.
Personal income tax refund or tax deduction
A partial refund of personal income tax paid to the state treasury is possible for every person; the name of this phenomenon sounds like “tax deduction”. In fact, it represents an amount of money by which the taxable financial base can be reduced, or which can be obtained from the tax office or through the employer. It is drawn from funds previously paid by the taxpayer to the country's treasury. The less he paid, the less he himself will receive if a suitable situation arises. There are various types of tax deductions.
What can you get personal income tax for?
Standard - applicable to the maintenance of children, as well as some groups of adult taxpayers. Most often used by parents. Thanks to its availability, the state allocates the following amounts for child support:
- the first and second children will receive 1 thousand 400 rubles each;
- the third and subsequent offspring are 3 thousand each;
- Increased compensation has been established for disabled children, the amount of which reaches 12 thousand rubles.
Receipt of money under the standard deduction is made directly through the employer, after submitting a corresponding application and a package of necessary documents to the accounting department at the place of employment.
Child tax deduction: how to prepare documents
In the material presented, we discuss how to go through this bureaucratic procedure in 2021 and use the right to receive a cash deduction for children.
Social – allocated to the costs incurred by citizens associated with obtaining higher education, expensive and conventional treatment. This category also includes charitable, pension and insurance expenses. To cover these expenses, the law provides 120 thousand rubles per year, and you must provide the tax office at the end of the current taxation period with an impressive list of documents confirming your right to compensation for expenses from the state. If you want to start receiving money immediately, do not wait, but contact your employer.
Investment - this compensation is provided upon the sale of securities of value that were circulated on an organized market and were the property of a person for more than 36 months. The maximum possible amount to be received is the product of the number of annual periods that the securities were in possession and 3 million Russian rubles.
Property – relies on the sale or acquisition of residential real estate. In the first case, the maximum deduction amount is 1 million rubles, in the second:
- 2 million rubles spent by home buyers from their own pockets;
- 3 million rubles to cover interest on a targeted loan taken from a credit institution for the purchase or construction of housing.
Receiving money is possible by submitting the appropriate application, declaration forms and related documents to the Russian Tax Service.
Professional - this type of tax deduction is provided to individual entrepreneurs, owners of legal offices and other domestic organizations, while it actually covers expenses that are documented by the company and are justified, that is, spent on the production and work process, and not on paying for the director’s vacation in the Canary Islands , For example.
A deduction provided for the transfer of losses received in the current period to subsequent periods - given to persons whose annual expenses exceed the revenue received.
Video – Income Tax Refund
General return procedure
In this article we will understand the return procedure provided for in Art. 176 of the Tax Code of the Russian Federation. This procedure takes a long time (only a desk audit of the declaration can last up to three months) and contains many pitfalls. Most of these difficulties are primarily due to the fact that the result of reviewing a tax return for refund may turn out to be not only strictly positive or negative, but also partial. In general, the reimbursement procedure looks like this. The decision to refund or refuse to refund VAT is made by the inspectorate based on the results of consideration within the framework of a mandatory desk tax audit of the declaration in which it is declared.
Let's sum it up
Every resident of Russia, as well as domestic organizations that are in relevant situations defined by law, have the right to receive a personal income tax refund (not VAT!). The process of returning funds paid to the country's budget is somewhat difficult due to the high degree of bureaucracy, but it is quite difficult not to cope with it, because today a lot of means have been invented to ease the tax burden of the payer in a technical sense.
It is impossible to get a VAT refund
It is important to have a certain level of tax literacy, otherwise you will not see a refund. There is an unspoken rule in Russia: receiving government compensation is voluntary. Specialists from the tax office or accounting department at your place of work will not run after you asking for money. Be careful and know your tax laws, then your well-being will not leave you.
