VAT for non-cash forms of payment (offset)

Offsetting between organizations

Settlement between two legal entities is possible only with the consent of both parties. The possibility of offset is provided for by civil legislation (410 Civil Code of the Russian Federation). This article states that the obligation is fully or partially terminated as a result of offsetting a counterclaim of a similar nature.

The basis for making a decision on offset is the existence of receivables and payables between the parties to the agreement. As a result of this transaction, mutual repayment of obligations occurs without recourse to monetary settlements.

Settlement can be carried out only if three conditions are met at once:

1. Legal entities that are parties to the offset must have counterclaims against each other.
2. These counterclaims must be homogeneous.
3. The counterclaim has already expired, is either not specified in the agreement, or is determined by the moment of demand.

Homogeneous obligations are those that are expressed in a single currency and have the same method of repayment.
Homogeneous obligations include obligations related to the fulfillment of the terms of different contracts, for example, contract and purchase and sale agreements, which are concluded between the same organizations. Let’s say that at the stage of signing contracts, a monetary form of payment was assumed, but since all the necessary conditions are met, the companies can carry out mutual settlements. https://youtu.be/https://www.youtube.com/watch?v=eXfiKtKvk50

Offsetting in 1C Accounting 8.3

Accounting. Income from the sale of goods (works, services) and expenses for their purchase should be reflected in your accounts as usual. As a result, you, as a buyer of goods (works, services), will have accounts payable (balance on the credit of account 60 “Settlements with suppliers and contractors” or account 76 “Settlements with various debtors and creditors”) for their payment.

According to the law, netting is possible if one of the parties declares it. But in practice, the decision on netting is made by both parties. This is why many want to know how netting between organizations should be carried out correctly in 2021, so as not to violate current legislation.

To identify cases of mutual claims with debtors and creditors, the organization must maintain analytical records of receivables and payables for each counterparty.

Invoice 03/31/16 60 62 Reflects the operation of offsetting claims between “Standard”, “Guarantor” and “Perfect” RUB 12,901. Application for offset of claims, reconciliation report Question - answer on the topic Question: An application for offset of claims has been drawn up between LLC Stimul and JSC Salamandra. The offset will take place only if such a statement is received by the relevant party.

Accordingly, when carrying out offsets, the amount of claims to be repaid must be determined in the act without taking into account VAT. The parties transfer the amount of tax from the repaid debt to each other in cash. Copying of site materials is prohibited. All materials, any text information, graphics or video, as well as the site structure and page design, are protected by Russian and international legislation.

If the requirements are heterogeneous or the deadline for fulfillment of at least one of the obligations has not yet arrived. Offset can only be made by agreement of the parties. A correctly drawn up document like this can become a means of optimizing the payment system of both enterprises. Article 410. Termination of an obligation by offset Main clarifications General points The act of offset is applied if it becomes necessary to reconcile the general obligations of one company with another.

Settlement is an agreement between the parties to civil legal relations on the mutual termination of certain obligations to the established extent. For example, if the contractor performed work for the customer, while the customer delivered goods to the contractor, then each party can exempt itself from paying for the obligations performed by the other party in exchange for the fact that the other party, in turn, will also not pay for the fulfilled first obligation. Legally, such a condition can be enshrined in an offset agreement for the provision of services (or supply of goods).

It is important that (Article 410 of the Civil Code of the Russian Federation):

• the obligations had a sign of homogeneity;
• the deadline for fulfillment of obligations at the time of offset has arrived (exceptions - if it is not specified, is subject to a separate indication, or there are grounds not to comply with this condition by law).

Offsetting cannot be carried out if (Article 411 of the Civil Code of the Russian Federation):

• the obligation of any of the parties is related to compensation for harm to health, lifelong maintenance, payment of alimony;
• the obligation of either party has expired;
• the conclusion of a netting agreement is expressly prohibited by law or agreement.

Settlement can be legally established not only in an agreement, but also unilaterally - through a statement of offset drawn up by any of the parties to the transaction. But in this case, the party drawing up the application must, if necessary, be ready to prove in court that:

• the application was clearly received by the counterparty;
• the counterparty had no objections to the offset.

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Drawing up a bilateral agreement on mutual settlement has such disadvantages, and many companies use it.

A scenario is possible in which a company’s counterparty has obligations to it (or it to the counterparty) under two different agreements. This is not of fundamental importance from the point of view of the possibility of mutual offset. The main thing is to consistently set out in the agreement the procedure for mutual offset of the parties’ claims with references to different agreements, and to correctly reflect the financial component.

How to make offsets between contracts of one counterparty comply with the requirements of the law {q} The main thing here is to make sure that the content of the legal relationship does not imply any obstacles to the offset of claims in terms of the provisions of Art. 410 and 411 of the Civil Code of the Russian Federation.

Thus, an obstacle to the offset of claims under several contracts with a counterparty may be the heterogeneity of obligations reflected in different contracts. For example, if one agreement is drawn up in rubles, and the other in foreign currency. In this case, netting between contracts of one counterparty will not be possible.

The type of debt in the tabular section can take one of the following values: “Receivable”, “Payable”. Check. Accounts receivable/payable account.

Attention

Agreement. The agreements, creditor and debtor under which mutual settlements were carried out are indicated. Type of calculations. The type of settlements with customers is indicated.

Filled out only if account 62.1 is indicated as the debt account. Credit. sum. The amount of accounts payable to be offset is indicated.

Deb. sum. The amount of receivables to be offset is indicated. The “Use auxiliary account” checkbox indicates that transactions will be generated not directly from accounts receivable to accounts payable, but using a auxiliary account.

When the checkbox is checked, the details for entering a subsidiary account and analytics for it become available.

The program analyzes mutual settlements with the supplier and shows the debt under each contract. To carry out offsets between contracts in 1C 8.3, it is required that in the document the amounts of the supplier’s debt and the debt to the supplier are the same.

Settlement is carried out for this amount. For this purpose, we correct the value in the “Settlement Amount” column. At the bottom of the document, the difference between accounts receivable and accounts payable is displayed; this difference should be equal to zero.

Accounting 8 » Offsetting VAT from advance payment during offset in 1C 8.3 Hello! There was such a change. In the 1C Accounting program, when filling out invoices for advance payment, the details of the agreement on account of which the advance was paid are no longer indicated. In the documents “Invoice received for advance payment” and “Invoice issued for advance payment” the “Counterparty Agreement” detail is no longer used.

It was not possible to make an adjustment according to the Analytics Agreement under 76. AB during netting and make a transfer to another agreement at the time of netting.

To do this, you need to indicate the following details: type of transaction - select “Debt offset”, to offset the debt - select “Buyer”, to offset the debt - “Our organization to the buyer”. Offsetting between organizations The program also allows you to offset the debt of a buyer or supplier in settlements with a third organization (the corresponding value is selected in the “On account of debt” field). In addition to debt offset, the standard “Debt Adjustment” document performs the following operations:

The selection of an operation is available in the “Type of operation” field.

Is there a legislative form established for the form according to which transactions for offsetting claims must be executed {q} Answer: No, such a form is not provided for by law, the document can be drawn up freely. But at the same time, do not forget to indicate in the application information that is considered essential for the test.

https://www.youtube.com/watch{q}v=1zcOuCrG7Io

Such data are the names of the parties, the amount of the debt and the amount of its repayment, the balance of the debt after the offset (if any), the grounds for the occurrence of obligations. This is due to the fact that the parties are not considered debtors until the obligations are fulfilled, therefore they cannot offset the debts among themselves.

At the same time, if the agreement does not specify a payment period, then you can set off at any time. It should be noted that legislative changes came into force on June 1, 2015, according to which offsets before the maturity of obligations are allowed. Procedure and documents You can apply for a credit in one of the following ways. Method 1.

Unilateral statement of offset. You can claim offset unilaterally. To do this, you will need to fill out an application in which you indicate the amount of mutual claims, the amount of their repayment (as a rule, the lesser of the two amounts of obligations), as well as the grounds for the occurrence of debts (agreements, acts, invoices).

If an organization has a debt to a counterparty-supplier, it can provide services to the counterparty or supply goods in exchange for the debt. Also, the counterparty-buyer can supply services or goods against his debt.

VAT in the netting agreement.

OSNO LLC, being a supplier under the contract, received an advance payment from the buyer under the supply agreement. In addition to the supply agreement, another agreement was concluded between the LLC and the buyer, under which the buyer is indebted.

In the 3rd quarter of 2021, the LLC delivered goods under the agreement under which the buyer made an advance payment, but not for the full amount.

Part of the prepayment remains. At the end of the quarter, the parties signed an agreement to offset mutual claims, according to which the remaining amount of the prepayment is offset against the debt under another agreement.

In this offset agreement, only the amount of the debt appears and the VAT contained in this amount is not specified. With such registration, are there any risks that the tax authorities will refuse to offset this VAT for the LLC? Your personal expert answers When offsetting counterclaims, the supplier organization has the right to deduct VAT accrued on the advance payment on the date the offset is reflected in accounting or later.

Offsetting mutual claims and VAT in 2020-2021 in the absence of termination of the agreement

Currently, the offset of mutual claims under the Civil Code of the Russian Federation, which occurs in terms of existing debts under existing agreements and, in essence, is a form of debt payment, does not entail any consequences in relation to VAT, despite the fact that in the documents formalizing the offset mutual requirements according to the sample, its amount is indicated.
This is due to the fact that the acceptance of VAT for deduction on goods, works, services purchased on the territory of the Russian Federation, starting from 2009, is in no way related to the fact of payment of this tax. Read more about the deduction procedure in the article “What is the procedure for applying (accepting) tax deductions for VAT: conditions” .

Thus, in order to make a deduction for purchases made in the Russian Federation, the simultaneous presence of three circumstances turns out to be important (Articles 171 and 172 of the Tax Code of the Russian Federation):

• the purchase is intended for use in transactions subject to VAT;
• the purchased item has been capitalized;
• there is an invoice issued without errors critical for deducting VAT.

Offsetting mutual claims in such a situation represents the repayment of mutual debts (payment), which are not reflected in the fact of the deduction.

Find out about the tax and accounting consequences of offsetting mutual claims in the Transaction Guide from ConsultantPlus. To do this, get trial access to the K+ system and study the material for free.

How is offset set off?

Offsetting between organizations is a business transaction that is documented. There are no specific requirements for completing this operation. In accordance with Art. 410 of the Civil Code of the Russian Federation, it is sufficient to draw up an application from one of the parties. There is no set form for this application, so it can be compiled freely. The main thing is that there is confirmation that the other company received the application and has no objections.

The application must be sent by mail, with a list of the contents and a receipt. This will confirm the fact that the counterparty received the application. Otherwise, if you go to court, this operation may be declared invalid. Another option for registering mutual offset is the act of offset. Its unified form is also not provided, so it is compiled in free form.

Regardless of which of the specified documents the offset is drawn up, it must contain all the circumstances of the offset. In the absence of detailed information, disputes may arise not only with counterparties, but also with the tax authorities. The settlement document must contain:

• obligations that are repaid by offset;
• the grounds for the occurrence of these obligations (agreements, acts, invoices);
• offset amount.

Drawing up an agreement on mutual offset: what to pay attention to {q}

https://www.youtube.com/watch{q}v=r8H9dRanWik

The form must also indicate the date on which the offset is considered completed (on this day the entries in the balance sheet should be reflected). You can attach a reconciliation report to your application, which will confirm the existing debts between you and the counterparty. Complete the application in 2 copies, sign it with your manager and seal it.

Give one of the copies to the counterparty under personal signature; this form will serve as the basis for you to reflect offset transactions in the balance sheet. Leave the second copy of the application with the counterparty. If you do not have the opportunity to transfer the bank to the debtor personally against signature, send it by letter with notification. Method 2: Two-way application. This procedure differs from the previous one in that you and the counterparty mutually draw up and sign an application.

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1. The agreement must necessarily reflect the following information:

• on the composition of obligations that are repaid as part of the offset;
• contracts and other documents of title (acts, invoices, invoices) under which obligations arose;
• financial value of the claims.

2. It is advisable to provide motivational formulations justifying its preparation.

For example, indicate that the agreement is drawn up in order to simplify and increase the efficiency of calculations between the parties.

3. In the agreement, it is advisable to indicate that the mutually offset claims are homogeneous, and to provide the main sign of their homogeneity (for example, indicate that financial obligations in rubles, similar goods in pieces, similar services in specific units of volume are offset).

4. It is advisable to reflect in the agreement the balance of debt of either party, since it is likely to arise as a result of mutual offset.

It would be appropriate to indicate in the preamble or other part of the agreement that it is drawn up on the basis of the provisions of Art. 410 and 411 of the Civil Code of the Russian Federation.

Whereas in order to set off, the document must contain a clear and unambiguous indication of the termination of the obligations of each party. After signing the reconciliation report, you (or your counterparty) write a letter (application, notification) to the other party.

Officials' view on the deduction of VAT from an advance payment under a terminated contract, offset as a counter-obligation. Officials explain that, on the basis of Art. 407 and 410 of the Civil Code of the Russian Federation, when counterparties offset mutual claims, obligations are considered terminated if the previously mutually received amounts of advance payments were returned. And these amounts are considered returned.

The FAS of the Central District confirms that if, upon termination of contracts between counterparties, both parties terminate their mutual obligations by offsetting previously received advances, then taxpayers have the right to deduct VAT previously paid on advance payments (resolution of the FAS of the Central District dated May 26, 2009 in case No. A48 -3875/08-8).

Offsetting is a fairly common operation in the accounting environment, which allows you to completely terminate mutual obligations between the parties in the most convenient way.

The article will help you correctly carry out and formalize the offset of mutual claims. One of the methods of settlements between organizations is offset.

Changes in legislation One of the main changes in legislation regarding VAT accounting when offsetting claims was introduced on 01/01/08.

How to calculate 3 years for VAT deduction?

By virtue of paragraph 2 of Article 173 of the Tax Code of the Russian Federation, a tax return in which a deduction is claimed must be filed no later than three years after the end of the relevant tax period (that is, the quarter in which the right to deduction arose). One of the important points when applying a VAT deduction is determining the initial period of the three-year period for its presentation.

The Determination of the Constitutional Court of the Russian Federation dated March 24, 2015 No. 540-O concluded that the three-year period established by paragraph 2 of Article 173 of the Tax Code of the Russian Federation is preclusive; it is not extended by the period for filing a declaration with the tax authorities.

For example, if on July 25 a company submits a VAT return to the Federal Tax Service for the 2nd quarter of 2021, in which it claims a tax deduction based on invoices relating to the 2nd quarter of 2014, then the three-year deadline will be missed. In this situation, it begins to flow on July 1, 2014 and ends on June 30, 2021. Therefore, a tax deduction can be claimed in a declaration submitted no later than June 30, 2017.

At the same time, as the Constitutional Court has repeatedly pointed out, VAT refunds are possible beyond the three-year period if valid reasons prevented the use of the taxpayer’s rights during this period. Related, in particular, to the failure of the tax authority to fulfill its duties or the inability to receive compensation despite timely actions taken by the taxpayer, etc.

Non-refundable VAT?

It would be unfair to leave the seller without a deduction, because the result of such transactions is essentially the same: the obligation to deliver the goods ceases, and the transferred money ceases from a legal point of view to be an advance and becomes a debt to the buyer, which is then repaid. Only this happens for reasons other than the transfer of money (and completely legal!).

Such a measure would infringe on the rights of the seller as a taxpayer, since it would force him to pay VAT in the absence of an object of taxation (this was noted by the Federal Antimonopoly Service of the North-Western District in the Resolution of February 12, 2007 in case No. A05-13851/2005-33). And VAT would turn into a fine for the fact that the obligation to return the advance payment was repaid in a legal way, but for some reason not mentioned in the Tax Code. After all, at the moment of termination of the obligation to supply goods, the amount accrued to the budget from the advance payment ceases to be called value added tax, since the VAT object never arose. In addition, such a taxpayer, having shouldered an additional tax burden, would find himself in unequal conditions with others. And this is already a violation of the provisions of Art. 19 of the Constitution, which guarantees equality of all before the law.

The seller, who is unable to deduct VAT accrued from the advance payment for a failed delivery, can only declare its amount as overpaid tax and demand its return or offset according to the rules of Art. 78 Tax Code. However, this option has some disadvantages. Inspections are reluctant to accept applications for the return and offset of overpayments without updated declarations, despite the fact that in the case of overpayment of tax, adjustment of reporting is voluntary (clause 1 of Article 81 of the Tax Code). And there is no reason to make changes to the declaration for the period of receiving the advance, declaring VAT was incorrectly accrued on it: at that time the tax was accrued correctly, because the termination of the obligation to supply the goods and, accordingly, the transformation of the amount accrued to the budget from tax into an overpayment occurred later. In addition, submitting a “clarification” is also inconvenient because it gives the tax authorities a reason to carry out a second audit, including an on-site audit. However, starting from January 1 of this year, if errors are identified that led to an overpayment, updated declarations do not have to be submitted: the law allows such errors to be corrected during the period of their discovery (Clause 1 of Article 54 of the Tax Code).

Similar situations have been the subject of consideration in arbitration courts more than once; in some cases, arbitration practice has already developed.

The procedure for applying tax deductions for VAT

The regulations for applying the value added tax deduction are described in detail in Article 172 of the Tax Code. Let's take a closer look at the provisions of this law:

1. According to this legal regulation, the main document for applying a tax deduction will be an invoice and other documents confirming the inclusion of the cost of acquired assets in expenses.
2. It is noted that the basis for applying a deduction when purchasing imported goods is a document confirming the actual payment of tax when goods cross the border. Thus, the basis for applying the deduction within the Russian Federation will be the issued invoice, and when moving goods across the border, the fact of payment.
3. The article indicates that the right to preference arises only if the purchased goods or other assets are registered.
4. The value of assets in foreign currency must be reflected in rubles at the exchange rate of the Central Bank of the Russian Federation on the date of registration. If the purchased goods (work, services) were paid in ruble equivalent from the price in foreign currency, then when further tax is paid, its amount is not adjusted when the exchange rate changes.
5. The period during which the deduction can be applied is established: within 3 years from the last day of the quarter in which this right arose.
6. If goods, works or services were registered in one tax period, and the invoice was issued in another, then the preference can be applied if the invoice is presented before the due date for filing tax returns. In the case of VAT, this is the 25th day of the month following the end of the tax period.
7. The article reflects the rule that establishes the need to include information from the book of purchases and sales in the tax return. Based on this, it can be established that maintaining this book is mandatory for correct taxation.
8. If the subject carried out activities in favor of another person (under agency agreements, commission agreements, transport expeditions, etc.), then the declaration includes the information specified in the received and issued invoices. If the agent/commission agent/developer/forwarder is not a VAT payer, then information about issued and received invoices must be provided by the 20th day of the month following the tax period.
9. Foreign enterprises whose central office is located abroad, and on the territory of the Russian Federation these companies have more than one separate division, must themselves determine at the location of which division taxes will be paid. The subject must notify the tax authorities at the place of choice in writing about this choice.

Rules for issuing an invoice

Since an invoice is considered the main document giving the right to a deduction, most of the deductions rejected by tax authorities are due to incorrect execution of this primary document.

The invoice must contain the following details:

• document number and date of its execution;
• name, addresses and TIN of the seller and acquirer;
• if there was a partial or full prepayment (advance payment), payment document number;
• list of goods, works and services, units of measurement;
• quantity of goods shipped in the specified units of measurement;
• cost without tax;
• VAT rate;
• calculated VAT;
• amount including tax;
• country of origin and customs declaration number for imported goods.

This document can be endorsed by any person who has the appropriate authority. Powers can be established by the head by local regulations.

When you receive an invoice, you should carefully review it to ensure it meets all requirements to avoid further tax disputes.

Step by Step Actions

All issued invoices are reflected in the purchase and sales ledger. Amounts from those accounts that can be attributed to reducing the tax burden must be reflected in the declaration and sent to the Federal Tax Service within the established time frame. The tax office can conduct a desk audit and, based on its results, accept input tax as a deduction.

At this stage, a situation very often arises when the amount of the deduction is significantly reduced by tax inspectors, and therefore the difference must be refunded or offset against future payments.

What documents need to be completed

The decision to carry out mutual offset must be documented. This is done, in particular, so that in the future there will be no problems either with counterparties or with inspectors. After all, in the absence of documents, neither you nor your business partner will have confirmation of your actual expenses, which means there is a risk of saying goodbye to expenses and earning penalties and fines.

And the credit itself can be issued in two ways.

METHOD 1. One of the parties declares a set-off. But before carrying out a unilateral set-off, we recommend that you sign a reconciliation act for mutual settlements with the counterparty. This document is optional, but it will help confirm the amount of debt (especially if some of the debt has already been paid) and avoid unnecessary disputes with the counterparty.

Please note that one signed act of reconciliation of mutual settlements is not sufficient for offset, since such an act reflects only the business transactions of the parties for a certain period of time and is a document confirming the state of mutual settlements. Whereas in order to set off, the document must contain a clear and unambiguous indication of the termination of the obligations of each party.

After signing the reconciliation report, you (or your counterparty) write a letter (application, notification) to the other party. The offset will take place only if such an application is received by the relevant party. Therefore, submit the application under a personal signature (the recipient must sign your copy of the document) or send it by registered mail with acknowledgment of receipt.

The date of unilateral offset and, accordingly, its reflection in accounting will be:

• the specific date from which the parties’ debts are considered repaid, if it is indicated in the application;
• the day of receipt of the application (letter, notification) by the counterparty, if a specific date is not specified by the initiator of the offset.

METHOD 2. The parties sign a two-sided document

• offsetting act;
• agreement on the offset of mutual claims.

Compared to the first quarter of 2014, 1.5 times more goods were paid using claims offset

This will help avoid disputes and misunderstandings between counterparties. And when offsetting heterogeneous obligations or obligations with unfulfilled deadlines, a bilateral agreement of the parties is required

The offset date will be the day the agreement (act) is signed, unless otherwise expressly stated in the document.

Please note that both in a unilateral statement and in a set-off agreement, it is important to define as accurately as possible the obligations (debts) of each party and indicate:

• the grounds for their occurrence (refer to contracts, primary documents, invoices) in order to confirm the reciprocity and homogeneity of obligations;
• amounts of liabilities;
• deadlines for each of them.

The document must determine which obligations are repaid by offset and indicate the remaining debt of one of the parties.

In the absence of these essential conditions, the offset may be declared invalid.

We will show you how you can fill out an application for a test using method 1.

127204, Moscow, Dmitrovskoe sh., no. 157

Mayskaya V.P. 125315, Moscow, Leningradsky Ave., 68

Ref. No. 36 from 05/28/2015

Limited liability company represented by General Director S.L. Rukodelnikov, acting on the basis of the Charter, in accordance with Art. 410 of the Civil Code of the Russian Federation declares a partial offset of counterclaims of the same type, the deadline for fulfillment of which has come.

Information on counterclaims and debt of LLCs and LLCs as of May 28, 2015:

The offset is made in the amount of 295,000 (two hundred ninety-five thousand) rubles, including VAT of 45,000 (forty-five thousand) rubles.

After offsetting mutual homogeneous claims, the balance of the LLC's debt to the LLC as of May 28, 2015 is 82,600 (eighty-two thousand six hundred) rubles, including VAT 12,600 (twelve thousand six hundred) rubles. The LLC's debt to the LLC has been repaid in full.

I received the application for credit on May 28, 2015.

How does mutual settlement work between organizations?

After the taxpayer submits a tax return, the tax authority verifies the validity of the amount of tax claimed for reimbursement when conducting a desk tax audit in the manner established by Article 88 of this Code. The Ministry of Finance passed the test The government approved the draft fiscal policy (NBP) for 2021. In accordance with it, small traders will receive a simplified tax regime, and large businesses will receive individual tax solutions. The taxation of the gambling business will also change, and the financial autonomy of local authorities will be expanded. Prime Minister Pavel Filip said that this NBP project is one of the most balanced in recent years, and demanded that the Ministry of Finance not delay the draft state budget, which must be approved by the end of December.

“It turns out that, in principle, VAT cannot be deducted - what if there will be a netting later?”

“...We had a regular supply, we accepted VAT as a deduction. A month and a half later, we sold another product to the same supplier and carried out an offset. I looked at the letter from the Ministry of Finance - it turns out that the tax should be restored for that period. But in fact, with barter, and not with offset, the tax cannot be deducted until it is transferred in separate payments. From the code, in my opinion, this follows if you carefully look at Articles 168 and 172. Otherwise, it turns out to be a strange situation: in principle, VAT cannot be taken as a deduction - what if then there will be a mutual offset with the counterparty? Or it is assumed that all offsets must be planned in advance. »

From a letter from chief accountant Olga Moseva, St. Petersburg

The material was prepared by Mikhail Narinov, UNP expert

Olga, the situation is really very controversial. At the suggestion of the Ministry of Finance, inspectors believe that the right to a VAT refund arises only in the period when mutual claims were offset and only if the tax was paid to the counterparty in cash. Officials make such conclusions based on paragraph 4 of Article 168 of the Tax Code. But you are absolutely right that deductions are regulated by another article - 172. Yes, from this year it has a direct reference to paragraph 4 of Article 168 of the Tax Code of the Russian Federation, but the text of Article 172 does not mention offsets.

The situation is so ambiguous that even the opinions of officials differ radically.

Ministry of Finance of Russia: VAT deduction is possible strictly at the time of tax payment

Elena Vikhlyaeva, chief specialist of the indirect taxes department of the department of tax and customs tariff policy of the Ministry of Finance of Russia, is sure that deduction for offset is possible only in the tax period in which VAT is transferred to the seller in a separate payment:

Federal Tax Service of Russia: VAT is deductible during the period of receipt of goods

Sergei Tarakanov, deputy head of the tax control methodology department of the control work department of the Federal Tax Service of Russia, interprets the norms of the code in favor of companies:

– Violation of the procedure provided for in paragraph 4 of Article 168 of the Tax Code of the Russian Federation is not a basis for refusal of VAT deductions. The procedure for applying tax deductions is regulated by Article 172 of the Tax Code of the Russian Federation. Paragraph 2 of this article defines the specifics only when using “own property” in calculations. Offsetting does not fall under this definition; it is one of the ways to terminate obligations, and not a commodity exchange operation.

Independent experts: there is no obligation to restore VAT

Anton Nikiforov, head of the legal tax practice, believes that there is no reason to restore VAT:

– The Tax Code does not contain special requirements that, when offset, the amounts of VAT previously legally accepted for reimbursement must be restored. But since the tax was not paid during the offset in “real” money, the condition of paragraph 4 of Article 168 of the Tax Code of the Russian Federation was not met. Hence the controversial situation. I believe that if the case goes to court, there is a chance of victory, but it is now difficult to accurately predict the outcome.

Andrey Prikhodko, head of the accounting and tax consulting department of the Audit and Consulting Group "Intercom-Audit", supports his colleague:

– There is no provision in the Tax Code that deductions for VAT during offsets are carried out only if there is a payment order for the transfer of tax. Unlike barter, a purchase and sale agreement provides for payment in money. And when a company accepts goods for registration, it cannot know in advance either the date of offset, or whether it will be carried out at all.

Our opinion: ambiguities in the code should be interpreted in favor of companies

We agree with independent experts. But if inspectors discover a similar situation during an inspection (most likely this can only happen during an on-site audit), they will have to fight back, right up to court.

New procedure for VAT calculations during offsets

Please explain how to correctly reflect in costs and deduct VAT on offset. The entrepreneur also pays for the services rendered to him by services, closing it with invoices and an act of offset.

Since January 1, 2007

The procedure for VAT calculations when
offsetting mutual claims (offsets)
.

This is due to the introduction in paragraph 4 of Art. 168 Tax Code of the Russian Federation

a new norm, according to which, when carrying out
offsets of mutual claims
(as well as when carrying out
commodity exchange transactions

securities
in calculations ), the amount of VAT presented by the taxpayer to the buyer of goods (works, services), property rights, is paid to the taxpayer
on the basis of a payment order for the transfer of funds
.

That is, from January 1, 2007

when carrying out offsets of mutual claims, each of the parties who agreed on the offset must transfer VAT to the other party (seller) in “real” money in non-cash form.

Despite the fact that such a rule is expressly provided for in paragraph 4 of Art. 168 Tax Code of the Russian Federation

,
liability for non-compliance is not provided
.

That is, the buyer of goods (works, services) will not be able to be punished for the fact that, contrary to the requirements of paragraph 4 of Art. 168 Tax Code of the Russian Federation

, offset mutual claims with the seller for the amount of VAT, rather than transferring VAT in cash.

In addition, in connection with the introduction of this norm, it is often concluded that if the buyer of goods (work, services), who repays his obligations to pay for the purchased goods (work, services) through offset, will not comply with the requirement to pay VAT in cash

, then this buyer will not be able to deduct VAT.

However, these statements are not true.

Let's turn to articles 171

and
172 of the Tax Code of the Russian Federation,
establishing the conditions and procedure for applying tax deductions.

In accordance with paragraph 2 of Art.
171 of the Tax Code of the Russian Federation amounts
presented to the taxpayer upon acquisition of goods (work, services), as well as property rights on the territory of the Russian Federation are subject to deductions in relation to:

1) goods (works, services), as well as property rights acquired to carry out transactions recognized as objects of VAT taxation;

2) goods (works, services) purchased for resale

.

Such deductions in accordance with paragraph 1 of Art. 172 Tax Code of the Russian Federation

are made on the basis of
invoices
issued by sellers when the taxpayer purchases goods (works, services).

In this case, tax deductions for VAT are made after registration

goods (works, services), property rights and, in the presence of relevant
primary documents
.

Thus, in order to deduct VAT on goods (work, services) purchased on the territory of the Russian Federation, it is necessary and sufficient to meet three conditions

:

– goods (work, services) were purchased for resale or will be used to carry out VAT-taxable transactions;

– there is an invoice

from the seller of these goods (works, services);

– goods (works, services) are registered

, which is confirmed by relevant
primary documents
.

Articles 171
and
172 of the Tax Code of the Russian Federation
any conditions that payment for goods (work, services) (including VAT) in order to obtain a VAT deduction must be made in any specific form .

Consequently, if the buyer’s obligation to pay for goods (works, services) purchased on the territory of the Russian Federation was fulfilled by offsetting mutual claims

, and at the same time, VAT was also
credited
and not transferred to the seller of goods in money, then, as follows from a literal reading of the norms of the Tax Code of the Russian Federation,
the buyer is not deprived of the right to deduct VAT
on goods (works, services) and can accept this VAT for deduction.

However, there is no doubt that the tax authorities will categorically object to the deduction of VAT if the VAT amount is not transferred to the seller on the basis of a payment order.

There is already a lot of talk about the fact that the new norm of paragraph 4 of Art. 168 Tax Code of the Russian Federation

illegal, since the procedure for settlements between the parties is a matter of
a civil law nature .

Therefore, tax

legislation cannot regulate it.

But until these ideas are embodied in actual court decisions or legislative actions repealing this norm, it may take more than one year.

If you do not want to enter into a dispute with the inspectors, and for some reason you do not want to pay VAT to the seller with “real” money, you can do this.

Instead of offsetting

, the parties may enter into an agreement on
novation
, that is, to replace the original obligation that existed between the parties
with another
obligation between the same persons, providing for a different subject or method of execution (
Article 414 of the Civil Code of the Russian Federation
).

Chapter 26 of the Civil Code of the Russian Federation

provides many
grounds for termination of obligations
, namely:

– termination of obligation by performance

(
Article 408 of the Civil Code of the Russian Federation
). This is the case when the debtor properly fulfills his obligations under the contract. For example, if he purchased goods and agreed to pay for them in money, then the transfer of money will be proper execution;

– compensation ( Article 409 of the Civil Code of the Russian Federation

);

– termination of obligation by offset

(
Article 410 of the Civil Code of the Russian Federation
) (in practice, this method of terminating an obligation is usually called
offset
);

– termination of an obligation by the coincidence of the debtor and the creditor in one person ( Article 413 of the Civil Code of the Russian Federation

);

– termination of an obligation by novation

(
Art. 414 Civil Code of the Russian Federation
);

– debt forgiveness ( Article 415 of the Civil Code of the Russian Federation

);

– termination of an obligation due to impossibility of fulfillment ( Article 416 of the Civil Code of the Russian Federation

);

– termination of an obligation based on an act of a state body ( Article 417 of the Civil Code of the Russian Federation

);

– termination of an obligation by the death of a citizen ( Article 418 of the Civil Code of the Russian Federation

);

– termination of an obligation by liquidation of a legal entity ( Article 419 of the Civil Code of the Russian Federation

).

Consequently, since in paragraph 4 of Art. 168 Tax Code of the Russian Federation

contains a requirement to pay VAT in “real” money only in cases of offsetting
mutual
claims (as well as
commodity exchange

securities
in calculations , then in the event of termination of the obligation of an individual entrepreneur to pay for services provided by your organization,
novation
, the obligation to transfer to each other, VAT does not arise on the basis of a payment order
.
Using the example of your situation, let’s look at what constitutes an innovation.

Your organization provided services to an individual entrepreneur under Agreement No. 1.

He has an obligation to pay for these services in cash

.

Subsequently, it turned out that he could pay your organization by providing services

, and your organization is ready to accept services as payment.

Your organization (instead of concluding agreement No. 2 with an individual entrepreneur, under which it purchases services from him and undertakes to pay for them, and then offset mutual claims

a novation agreement
with an individual entrepreneur .

When concluding a novation agreement, the initial obligation

Once an individual entrepreneur pays for the service provided to him by your organization, it is terminated.

An individual entrepreneur has a completely new obligation to your organization (to provide services), which does not imply any reciprocal obligations of your organization and does not depend on the fact that your organization fulfills its obligations under Agreement No. 1.

That is, in the case of concluding an agreement on innovation, it cannot be said that the parties “exchanged” services, that is, they performed a commodity exchange operation in the sense in which this is implied by the Tax Code of the Russian Federation, or offset mutual claims

.

When concluding a novation agreement, the following nuances should be taken into account.

Firstly

, such an agreement must be dated
prior to
the date of provision of services by the individual entrepreneur.

That is, if, for example, your organization provided services to an entrepreneur on January 10

, and the entrepreneur provided services to your organization
on January 20
, then the novation agreement can be dated, for example, January 15.

Secondly

, as explained by the Presidium of the Supreme Arbitration Court of the Russian Federation in information letter No. 103 dated December 21, 2005, an obligation is terminated by novation when the will of the parties is definitely aimed
at replacing the original obligation existing between them with another obligation
.

That is, the novation agreement should clearly indicate which obligation is being terminated and which new obligation is replacing it.

In the said information letter, the Presidium of the Supreme Arbitration Court of the Russian Federation also noted that in order to terminate an obligation by novation, the parties must agree on the essential conditions

obligations by which the parties provided for the termination of the original obligation (that is, the new obligation).

Novation only terminates an obligation when the agreement to replace the original obligation with a new obligation meets all the requirements of the law, that is, it is concluded in the form

, an agreement has been reached between the parties on all
essential terms
of the new obligation established by the parties and the transaction is valid.

This information must be reflected in the novation agreement.

So, for example, in your case you need to specify, at a minimum, what services will be provided.

Now let’s consider whether it is possible to take into account VAT in expenses when conducting offsets

.

Let's start with the fact that at the moment when the service is provided by you, your organization will have the obligation to charge VAT to the budget and within 5 calendar days issue an invoice to the buyer of the service ( clause 1 of Article 167 of the Tax Code of the Russian Federation, clause 3 of Art. 168 Tax Code of the Russian Federation

).

Based on clauses 1 clause 1 art. 264 Tax Code of the Russian Federation

this amount of VAT is included
in other costs associated with production and sales
.

When purchasing a service from an individual entrepreneur, the right to deduct VAT arises for your organization when all the conditions for receiving the deduction

, established
by Articles 171 and 172 of the Tax Code of the Russian Federation (see above)
.

According to Art. 170 Tax Code of the Russian Federation

as part of the expenses accepted for deduction when calculating the corporate income tax, the amounts of VAT presented to the taxpayer when purchasing goods (works, services), property rights, as a general rule, are
not taken into account
.

The exception is cases directly named in paragraph 2 of Art. 170 Tax Code of the Russian Federation

, namely:

1) acquisition of goods (work, services) used for operations for the production and (or) sale (as well as transfer, execution, provision for one’s own needs) of goods (work, services) not subject to VAT taxation

;

2) acquisition of goods (work, services) used for operations for the production and (or) sale of goods (work, services), the place of sale of which is not recognized as the territory of the Russian Federation

;

3) purchase of goods (works, services) by persons who are not VAT payers

or exempt from fulfilling the taxpayer’s obligations for calculating and paying VAT;

4) acquisition of goods (work, services) for the production and (or) sale (transfer) of goods (work, services), operations for the sale (transfer) of which are not recognized as sales of goods (work, services)

.

In these cases, buyers of goods (works) deduct VAT, but take it into account as expenses for profit tax purposes

.

In other cases, VAT cannot be taken into account in expenses

.

If instead of paying with money

for purchased goods (work, services), the buyer enters into an agreement with the seller of these goods (work, services)
to offset mutual claims
, then the fact of offset does not in itself change the above procedure for calculating VAT and including it in expenses for profit tax purposes.

Settlement between Legal Entities in 2020

A tripartite agreement is carried out in the opposite direction to the flow of debt. Example 1. ABV LLC has a debt to GDE LLC in the amount of 430,000 rubles, GDE LLC has a debt to ZhZI LLC in the amount of 560,000 rubles, ZhZI LLC "has a debt to ABV LLC in the amount of 150,000 rubles. A strict application form is not provided for this operation, and therefore the parties can draw it up in free form.

• the mandatory presence of grounds for the emergence of homogeneous claims between two organizations;
• all requests must be cyclical or counter in nature.
• organizations between which mutual offset of claims is carried out must immediately take part in all obligations for which counter requests have been formed;

It is worth noting the fact that mutual offsets are prohibited based on such claims

What does “VAT deductible” mean?

Let us remind you that every economic entity that produces and sells goods/services is required to pay VAT (with the exception of special regimes, which, by the way, also in some cases transfer VAT to the budget). When a subject purchases goods/services (or pays for work), the seller charges VAT, which is included in the total purchase amount. It is this amount of tax billed that is subject to deduction.

Thus, the tax base for VAT payable is reduced by the amount of tax billed by the seller in the accounting period.

If the amount to be deducted exceeds the amount to be paid, the difference is subject to return or further offset in subsequent periods. If the amount to be deducted is less than the amount of tax billed, then the difference is paid to the budget.

Accept for deduction of VAT upon offset in 2020

Author of the article Lyudmila Trubchaninova 5 minutes to read 535 views Contents How to deduct VAT when netting in 2020? What should you pay attention to? You can find out the answers to these questions in this article. Settlement between organizations is possible with the mutual consent of the parties. The possibility of offset is provided, which states that the obligation is terminated in whole or in part by offsetting a counter-similar claim. According to the actions of legal entities aimed at establishing, changing or terminating civil rights and obligations, they are recognized as transactions. In accordance with transactions, they can be multilateral (agreements), for the conclusion of which it is necessary to express the agreed will of the three parties. As a rule, the trigger for resolving the issue of mutual offset is the presence of receivables and payables between the parties to the agreement

This deal

The possibility of offset is provided, which states that the obligation is terminated in whole or in part by offsetting a counter-similar claim. According to the actions of legal entities aimed at establishing, changing or terminating civil rights and obligations, they are recognized as transactions. In accordance with transactions, they can be multilateral (agreements), for the conclusion of which it is necessary to express the agreed will of the three parties. As a rule, the trigger for resolving the issue of mutual offset is the presence of receivables and payables between the parties to the agreement. This deal

When is offset possible?

Offsetting counterclaims is a way of terminating (in whole or in part) already existing mutual obligations.
The amounts of mutual debt very rarely coincide, usually the debt of one party is greater than the debt of the other. Then offset is made for the smaller amount. And the party whose debt was greater will have part of the obligation remaining unpaid.

Settlement of obligations is possible only if the following conditions are met.

Requirements are considered homogeneous when they have the same subject and can be compared. Let's say, monetary claims expressed in one currency are homogeneous. For example, one party has a debt to pay for work performed, and the other has a debt to repay the loan, while each party owes the other money, which means that such obligations can be credited.

The courts consider it possible, for example, to set off claims for payment of the customer’s debt for work performed and for payment of a penalty for the contractor’s violation of deadlines for completing work, because, despite their different legal nature, these claims are monetary, that is, homogeneous

In principle, the parties can agree on the offset of heterogeneous claims, such as when the debt of one party is expressed in rubles, and the other in foreign currency. But then the companies need to agree on the rate at which the foreign currency debt will be converted into rubles.

At the time of offset, the payment deadline for each claim under the contract must already have arrived. For example, a tenant cannot offset against rental payments the cost of inseparable improvements made at his own expense with the consent of the landlord. And all because the counter-obligation of the lessor to reimburse the cost of these improvements will arise only after the termination of the lease agreement (unless otherwise provided for in the agreement. Although the Supreme Arbitration Court believes that offsetting obligations with unfulfilled deadlines is also possible

If the parties have not established specific terms for repayment of debts in the agreement, then offset can be carried out at any time.

Not long ago, changes were made to the Civil Code of the Russian Federation, and from June 1, 2015, in cases provided for by law, it is allowed to set off a counterclaim that has not yet come due

There are cases when netting is in principle unacceptable, for example:

• the parties provided for such a condition in the contract;
• offset is directly prohibited by law (for example, in most cases it is impossible to carry out offsets with a foreign partner in foreign economic activity
• according to the requirements, the statute of limitations has expired (3 years from the date of occurrence

Deduction for advance payments

VAT can be deducted from prepayment, which is stated in Art. 171 Tax Code and paragraph 9 of Art. 179 NK. This operation can be performed if three conditions are met:

• the advance was made against the future shipment of goods that will be used for activities subject to VAT;
• an invoice has been issued for the prepayment amount;
• The contract stipulates that an advance payment is required when completing a transaction.

The documents that are necessary to confirm the legitimacy of the preference are approved by the Ministry of Finance:

• invoice for advance payment;
• payment documents confirming the fact of prepayment;
• copies of supply contracts.

The Ministry of Finance explains that the amount of the advance in the contract and payment order may vary, and this does not contradict tax legislation. According to the instructions of the same financial department, the deduction should be applied from the moment of physical shipment of goods. In this case, the three-year period established by the Tax Code does not apply. If the physical receipt of the goods occurred later than this period, then this will not become an obstacle to the application of the deduction.