Issued a loan - divided the VAT? (On separate accounting of input VAT by the lender)

Accrual of interest on deposits and issued loans - non-operating income

Every entrepreneur, when organizing his own business, strives for a single goal - to make a profit.
But for this you need to generate some income. Income can be received from the sale of products of own production, goods previously purchased for the purpose of resale, as well as from the performance of work and the provision of services. This concerns the main activity of an economic entity. But there is another type of income. Thus, an individual entrepreneur or organization can open a deposit account with a banking institution in order to receive additional funds in the form of accrued interest on the balance of this account. Additional income can also be obtained by issuing funds to other economic entities and charging the borrower interest for use. Accrued interest receivable on both deposits and loans issued will constitute so-called non-operating income, which must subsequently be taken into account when calculating income tax.

In the income tax return, the amounts of accrued interest receivable will be included in line 100 of Appendix 1 to Sheet 02.

What about the VAT return? Are the specified non-operating incomes included in it?

Starting from the report for the 4th quarter of 2021, it is necessary to use a new VAT declaration form, approved. by order of the Federal Tax Service dated August 19, 2020 No. ED-7-3/ [email protected]

You can find out what has changed in the report in the Review material from ConsultantPlus. If you do not have access to the K+ system, get a trial online access for free.

Deposit interest and VAT reporting: how they are related

By placing funds in a deposit account of a banking institution, the business entity remains their owner. The money must be returned by the bank upon expiration of the agreement. In accordance with Art. 39 of the Tax Code of the Russian Federation, such an operation is not recognized as sales. This means that interest accrued on the deposit is not subject to VAT, like amounts not related to sales. This is precisely the opinion expressed by officials of the Ministry of Finance in letter dated 10/04/2013 No. 03-07-15/41198. Thus, interest on deposit agreements does not need to be included in the VAT report.

You can read about how to prepare VAT tax reports correctly and without errors in this article.

Reflection of interest on loans issued in the VAT return

The situation is somewhat different with the interest that the lender accrues to the borrower when issuing loans in the form of cash.

According to sub. 15 clause 3 art. 149 of the Tax Code of the Russian Federation, the accrual of these interests is an operation exempt from VAT. It is for such operations that the tax report provides for Section 7, which contains four columns filled in as follows:

• column 1 - code 1010292 is given, designated “Loan operations in cash and securities, including interest on them...”;
• column 2 - the amount of accrued interest receivable is recorded;
• Columns 3 and 4 are crossed out.

EXAMPLE of filling out section. 7 when receiving interest on a loan from ConsultantPlus: The organization provides cash microloans to the population. The amount of accrued interest for the reporting quarter amounted to RUB 400,000. The organization will reflect this amount in column 2 of section. 7 declaration. For this activity, the organization rents premises from a VAT non-payer (the lessor applies the simplified tax system). Rental cost: RUB 30,000. per month, 90,000 rub. for the quarter. The organization will reflect this amount in column 3 of section. 7 declarations…. Read the continuation of the example by getting trial demo access to the K+ legal reference system. It's free.

More information about this section of the report can be found here.

According to paragraph 3 of Art. 169 of the Tax Code of the Russian Federation, the lender does not need to issue invoices for the amount of interest accrued under loan agreements.

NOTE! When simultaneously carrying out transactions that are subject to VAT and exempt from this tax, the taxpayer must maintain separate accounting, the principles of which must be outlined in the accounting policy.

Is the provision of a loan subject to VAT?

If, under a loan agreement, you provided funds to the borrower, then the loan amount is not subject to VAT. Such transactions are not recognized as subject to VAT (clause 1, clause 3, article 39, clause 1, clause 2, article 146 of the Tax Code of the Russian Federation, Letter of the Ministry of Finance of Russia dated November 29, 2010 N 03-07-11/460, Federal Tax Service of Russia dated April 29 .2013 N ED-4-3/7896). Providing a loan with securities is also not subject to tax (clause 15, clause 3, article 149 of the Tax Code of the Russian Federation).

If, under a loan agreement, you transfer goods to the borrower, then you need to charge VAT on such a transaction. The transferred property in this case becomes the property of the borrower (clause 1 of Article 807 of the Civil Code of the Russian Federation). Therefore, its transfer is recognized as a sale and is subject to VAT (clause 1, article 39, subclause 1, clause 1, article 146 of the Tax Code of the Russian Federation).

There is an opinion that the transfer of goods under a loan agreement is not a sale and is not subject to VAT, since the goods are subsequently returned to the lender. However, if you follow this position and do not charge VAT, this will most likely lead to claims from the tax authorities.

Results

The accrual of interest on deposits and issued loans is non-operating income for taxpayers on the OSN. This income is taken into account when calculating the income tax base.

Transactions to receive the specified interest will not be subject to value added tax.
In one case, due to the fact that the amounts are not related to sales, therefore deposit interest is not reported in VAT reporting, and in the other, due to the fact that the operation is exempt from VAT due to the norms of the Tax Code of the Russian Federation, interest on loans issued will be reflected in section 7 of the VAT tax report. You can find more complete information on the topic in ConsultantPlus. Free trial access to the system for 2 days.

Issued a loan - divided the VAT? (On separate accounting of input VAT by the lender)

For “ordinary” non-credit organizations, issuing loans and receiving interest on them is not a very rare operation. Moreover, there is hardly a taxpayer who does not know that these transactions are exempt from VAT. But many people forget that along with the right not to calculate VAT when issuing loans and receiving interest, an organization may have an obligation to distribute input VAT.

Content

But why does “can” and not “should” arise? Let's figure it out.

Loan “according to the Ministry of Finance”:

divide input VAT, prepare invoices

In April 2008, the Russian Ministry of Finance issued a Letter, from which it follows that the lender is obliged to keep separate records of transactions for issuing loans and other taxable transactions. This is because operations related to loans, Ch. 21 of the Tax Code of the Russian Federation are equated to financial services. And these services, in turn, are exempt from VAT.

That is, according to the logic of the Ministry of Finance, it turns out that if you, for example, are engaged in wholesale trade and issue cash loans from time to time, then you simultaneously carry out transactions subject to VAT and not subject to VAT and must keep separate records of them. In addition, you need to prepare invoices when you receive interest on loans and record the invoices in the sales ledger. Don't forget to also fill out section. 9 VAT return for the quarter in which interest was received Tax Code Article 168.

Since the Tax Code does not establish a procedure for separate accounting, you need to refer to accounting regulations. They provide separate accounting for transactions with loans from transactions for the sale of goods, works or services. It consists of the following:

— the amount of the loan issued is not an expense of the organization;

— the amount of the loan issued is reflected in the debit of account 58, subaccount 58-3 “Loans provided”, in the analytics for each borrower;

— interest on the loan is other income and is reflected in the credit of account 91, subaccount 91-1 “Other income”;

— expenses for loan transactions include only those expenses that are DIRECTLY related to its issuance and receipt of interest (for example, expenses for information and consulting services). Such expenses are other and are reflected in the debit of account 91-2 “Other expenses”;

— general business expenses are not included in the expenses for operations with loans (except for the case when these expenses are DIRECTLY related to the issuance of a loan).

What does this procedure mean for VAT tax purposes? It means that input tax on goods (work, services) whose acquisition costs are directly attributable to the costs of loan transactions is not deductible. This VAT is included in the cost of purchased goods (works, services). And tax on expenses for other transactions subject to VAT can be deducted.

However, most “regular” organizations do not have expenses (especially with input VAT) directly related to the operations of issuing loans and receiving interest on them. For example, a trade organization will not turn to someone for advice in order to understand whether to give a loan or not. Therefore, when the lender does not have “direct” expenses for operations with loans (general business expenses do not apply to these operations), then he can deduct the entire input VAT that is presented to him, without distributing anything Tax Code Article 170.

And everything would be fine if it weren’t for the Ministry of Finance. Financiers are not embarrassed by what they themselves have established: general business expenses have nothing to do with borrowing costs. They believe that VAT on these expenses should be divided. And the tax in the amount attributable to loan transactions should not be deducted and included in the cost of goods (work, services), thereby increasing general business expenses. The amount of this VAT is calculated as follows:

True, the financial department did not forget about the “five percent rule.” According to it, input VAT can be deducted in full if the costs of loan transactions do not exceed 5% of the total production costs for the quarter.

It is very doubtful that the share of costs associated with issuing loans will be greater than this value. Especially considering that the loan amount issued is not an expense. But this option cannot be completely ruled out. Is it possible to justify your reluctance to share input VAT in this case? Can.

A loan is not a service:

We do not divide VAT, we do not prepare invoices

Let's take a look at the norm of Art. 149 of the Tax Code of the Russian Federation. It says that, we quote, “operations for the provision of loans in cash, as well as the provision of financial services for the provision of loans in cash,” are exempt from VAT taxation, end of quote. Not the norm, but a mystery. Where is the interest on loans? What are these mysterious financial services? Russian legislation knows only those financial services that are provided by banks, insurance companies, leasing companies, etc. Moreover, the Ministry of Finance, in general, does not deny that in Art. 149 of the Tax Code of the Russian Federation, the term “financial ordinary” organization can provide “financial ordinary” non-credit organization, neither before nor after the issuance of a loan does anything. He's just waiting for interest and money back.

The fact that loan transactions cannot be equated to the provision of services is also confirmed by the definition of the term “interest” from part one of the Tax Code of the Russian Federation. Interest is any predetermined INCOME on a DEBT OBLIGATION of any kind. Do you see anything here about the provision of services? So we don’t see).

Income (including interest) and sales of services are completely different objects of taxation. Interest is always income taken into account for profit tax or personal income tax purposes. It is no coincidence that Ch. 25 of the Tax Code of the Russian Federation, without options, classifies interest as non-operating income, that is, income not related to the sale of something. Even if we are talking about banks, for which issuing loans and receiving interest on them is the most common activity.

Note. By the way, the Civil Code clearly distinguishes between a service agreement and a loan agreement. The norms of the Civil Code of the Russian Federation regarding these agreements are completely different and do not overlap in any way. Thus, under civil law, the issuance of a loan is not equivalent to the provision of a service.

So, from part one of the Tax Code it clearly follows that issuing loans and receiving interest on them are not services at all. At the same time, there is no provision in tax legislation that part two of the Tax Code of the Russian Federation can change the definitions of the terms “interest”. Therefore, the mention in Art. 149 of the Tax Code of the Russian Federation, operations for issuing loans in cash and financial services for issuing them are nothing more than a misunderstanding.

Without this norm, NOTHING would have changed. Part 1 of the Tax Code of the Russian Federation is quite enough to justify why transactions with loans should not be subject to VAT. The transfer of money as a loan is not considered a sale. Interest is income on a debt obligation and has nothing to do with sales. No sale - no object of VAT taxation. And everyone would live without the norm of Art. 149 of the Tax Code of the Russian Federation is much simpler.

Nevertheless, there is a norm, but it must be viewed as ambiguity. And this ambiguity should be interpreted in favor of the taxpayer, that is, in your favor. It is in your interests not to consider loan transactions as the provision of services.

Why is this in your best interest?

Firstly, because then the problem with the division of input VAT immediately disappears. After all, Art. 170 of the Tax Code of the Russian Federation requires the distribution of VAT on goods (works, , end of quote. When issuing loans and receiving interest on them, you do not perform any “sales operations.” Therefore, the norm of Article 170 of the Tax Code does not work, and all input tax is deducted .

Secondly, doubts about invoices are immediately dispelled. There is no need to display them according to Article 168 of the Tax Code of the Russian Federation.

The final decision is up to the taxpayer

It is clear that not everyone likes to quarrel with their tax office. If your “direct” costs for loan transactions are minimal (most likely, there are none at all), and drawing up invoices for interest is not a problem, then why not follow the explanations of the Ministry of Finance? You already keep separate records of transactions with loans and other transactions; you don’t have to invent anything - everything is already established by regulatory documents on accounting. Input VAT will also most likely not have to be divided. True, you will have to fill out section. 9 VAT returns, and this always attracts the attention of tax authorities. They will immediately want to check the purchase book and sales book, request documents related to the issuance of loans, etc.

It’s another matter if the qualification of loan transactions as financial services for VAT tax purposes does not suit you at all and you don’t want to deal with issuing invoices for interest. Then do everything as if you are not performing any transactions exempt from VAT. Do not calculate the share of “borrowed” expenses according to the “five percent rule”, do not draw up invoices for interest, and deduct input VAT in full. And, of course, do not fill out section. 9 VAT returns. But be prepared for disputes with inspectors.

However, perhaps there will be no disputes, given that the Ministry of Finance itself is not sure of its opinion. In the very Letter with which this article began with a commentary, the financial department emphasized, we quote: “this letter is of an informational and explanatory nature and does not prevent one from being guided by the norms of the legislation on taxes and fees in an understanding that differs from the interpretation set out in this letter,” end of quote.

In a word, as it usually happens: “The rescue of drowning people is the work of the drowning people themselves.”

Dybov A.I.

First published in the journal "Glavnaya Kniga" N 11, 2008

Legal documents

• (Tax Code Article 168)
• (Tax Code Article 170)
• (Tax Code Article 11)
• Article 168 of the Tax Code of the Russian Federation