Why was movable property taxed?
Is it true that the movable property tax is returning from 2021? Let's explain what's going on. Legal regulation of the tax on movable property of organizations from 2021 is carried out, as before, by Chapter 30 of the Tax Code of the Russian Federation. However, the main powers on this issue are given to regional authorities.
As you understand, the movable property tax has not been abolished since 2018. Although the Russian Ministry of Economic Development was very actively in favor of this. In general, there were great debates on this issue.
Initially, the Russian Ministry of Economic Development proposed to exempt all movable property of enterprises from tax and extend this rule to legal relations arising from 01/01/2018.
The Cabinet of Ministers wanted to maintain this benefit at the federal level only until 2021, but many constituent entities of the Russian Federation were against it. They expressed a desire to exercise their right not to introduce benefits on their territory, in order to thereby increase the collection of property tax, since it is of a regional nature.
As a result, all parties to this discussion agreed on an option that suited everyone. The new tax on movable property from 2021 allows for the introduction of amendments to the Tax Code of the Russian Federation, introduced by:
- Law of November 30, 2021 No. 401-FZ;
- Law of November 27, 2021 No. 335-FZ.
Until 2021, legal entities did not pay tax on movable property that was registered in 2013. An exception is movable assets from interdependent counterparties during liquidation or reorganization.
Movable property tax from 2021 (main changes). Organizational property tax 2021
MiscellaneousOrganizational property tax 2021
The Federal Tax Service of Russia, in a letter dated December 20, 2021 No. BS-19-21/327, recalls that on the basis of paragraph 25 of Article 381 of the Tax Code of the Russian Federation, organizations have the right to count on a tax benefit on movable property registered on January 1, 2013 as fixed assets. The benefit is provided in the form of tax exemption.
However, there are exceptions: movable property is registered as a result of the reorganization or liquidation of legal entities, as well as during the transfer or acquisition of property between related parties. From January 1, 2021, restrictions do not apply to railway rolling stock manufactured starting from January 1, 2013.
From January 1, 2021, this benefit is applied in the territory of a constituent entity of the Russian Federation only if the corresponding regional law is adopted (Article 381.1 of the Tax Code of the Russian Federation).
In accordance with the amendments made by Federal Law No. 335-FZ of November 27, 2021 to Articles 380 and 381.1 of the Tax Code of the Russian Federation, tax rates determined by the laws of the constituent entities for movable property that is not exempt from taxation cannot exceed 1.1% in 2021.
At the same time, the law of the subject in relation to movable property, from the date of issue of which no more than 3 years have passed, as well as property classified by regional law as innovative high-performance equipment, may establish additional tax benefits up to the complete exemption of such property from taxation.
Thus, if in 2021 the subject does not pass a law extending the benefits under paragraph 25 of Article 381 of the Tax Code of the Russian Federation, and other additional benefits for movable property are not established, then for such property the tax and advance payments for 2021 will be calculated at the rate , provided for by regional legislation within the limits of 1.1%, or at a rate of 1.1% (if the legislation of the subject does not establish a rate).
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Organizational property tax 2021
Organizational property tax is a mandatory payment paid to the state treasury for movable property or any kind of real estate, established by the Tax Code of the Russian Federation, as well as local legislative acts of the constituent entities of the Russian Federation. The basis for calculating this tax in most cases is the average annual price of property, but for some objects this role is played by their cadastral value.
Taxpayers are organizations that own property included in the category of taxable objects in accordance with the norms of the Tax Code of the Russian Federation.
General information
The tax period for this mandatory payment is considered to be a calendar year. As for reporting periods, they depend primarily on the method of tax calculation.
Thus, enterprises that use the cadastral value calculation method report in the first, second and third quarters, while all others report in the first quarter, based on the results of half a year and nine months.
The property tax of legal entities is determined by the constituent entities of the Russian Federation, which may not document specific reporting periods at all. Regional authorities may also exempt certain groups of taxpayers from the obligation to make advance payments.
As a rule, local regulations indicate the need to pay advances at the end of each reporting period, and the remaining tax amount is transferred at the end of the year.
In the case of calculation according to the cadastral value or if the property is located in another area, the tax is paid in accordance with the location of the specific property, regardless of where the organization is registered.
What is taxed?
Russian companies are subject to taxation of movable and immovable property, which is reflected on the balance sheet as a fixed asset.
Tax authorities will perceive failure to charge tax on this type of property and not reflect it as a fixed asset as tax evasion, since this is a violation of accounting standards.
Housing is subject to taxation even in cases where an organization does not take it into account on its balance sheet as a fixed asset.
Foreign organizations that have opened their representative offices in the Russian Federation are guided by similar rules when calculating tax. In the absence of a permanent representative office in Russia, all property owned by the company is subject to taxation.
On a general basis, tax is charged on those property objects that have been transferred for temporary use, disposal or ownership, are in trust management, are jointly owned or received in accordance with a concession agreement.
Lack of state registration or sending a fixed asset for conservation is not grounds for tax exemption.
Legislation
Property tax is regulated mainly by the Tax Code of the Russian Federation; the main points are set out in Chapter 30 of this code of laws.
However, due to the fact that this tax belongs to the regional category, at the local level authorities can establish their own rules for its payment, while complying with the norms of federal legislation.
Organizational property tax
Mandatory payments that legal entities must make include property tax provided for by the Tax Code of the Russian Federation. It is paid by both domestic companies and foreign ones operating in the Russian Federation.
The nuances of taxation vary in individual regions, since many issues relating to its payment are detailed by regional regulations.
Who is the payer?
The role of tax payers is played by all organizations operating on the general taxation system, on whose balance sheet there is property classified as objects of taxation.
Also, this tax may be levied on those legal entities that conduct their activities using a simplified tax system or UTII. However, such enterprises must make payments only for those objects whose taxation is carried out in accordance with the cadastral value.
Size
Each region sets property tax rates, establishes certain benefits, and introduces differentiation of rates. At the same time, the maximum rate cannot exceed 2.2%, as specified in Article 380 of the Tax Code of the Russian Federation.
How is it calculated?
Before calculating the property tax of organizations, you need to know what rate is in force in a particular region, as well as have an idea of the size of the tax base. It is by multiplying these two indicators that the required amount is obtained, which must be paid to the budget.
If advance payments are provided, the amount of tax payable at the end of the year is determined after their preliminary deduction.
Bid
Organizational property tax is a type of local tax established by regional authorities. Specific rates are determined at the local level, but are subject to restrictions imposed by the Tax Code.
In particular, the constituent entities of the Russian Federation cannot establish a tax exceeding 2.2%, but in most regions the maximum rate allowed by the Tax Code is chosen. Although some regions use different, lower rates.
Also, at the all-Russian level, a marginal rate of 1.9% is established for such types of fixed assets as railways, pipelines, and electrical networks.
Filing a declaration
The tax period for property tax is 1 year. Tax legislation defines the reporting periods as the first quarter, half a year and nine months, although local legislation may make changes, for example, abolishing quarterly reporting.
After each reporting period, the taxpayer’s task is to submit reports within a 30-day period to the local Federal Tax Service inspectorate.
As for the property tax return, it must be submitted only once a year - before the end of March following the reporting year.
Payment deadlines
The specific deadlines within which property tax payments must be made are determined by each subject of the Russian Federation individually; the Tax Code does not define dates.
As for the declaration for this tax, it is submitted no later than March 30 of the year following the reporting year. Advance payments must be reported by the end of the month following the end of the month.
Who doesn't pay?
In 2021, no tax will be paid for land, water and other objects classified as environmental management, as well as cultural heritage, nuclear installations and icebreakers.
Starting from 2015, fixed assets belonging to the first and second depreciation groups are not considered the object of taxation, regardless of when they were registered.
Organizational property tax is an important element of the state taxation system and one of the sources of replenishment of local budgets.
New tax on movable property of organizations in 2021 and benefits
Due to the fact that the introduction of a tax on movable property of organizations is important for replenishing the budgets of Russian regions, there is practically no doubt that in 2021 it will be introduced in every subject of the Russian Federation.
From this article you can learn about the new tax on movable property of organizations in 2021 and get an answer to the question whether the current legislation of the Russian Federation provides for a list of benefits for it.
Reason for taxing movable property
From 2021, the tax on movable property of organizations is regulated, as before, by the Tax Code of the Russian Federation (Chapter 30). Despite this, powers regarding this tax are given to the authorities of Russian constituent entities.
Previously, the Ministry of Economic Development made a proposal to abolish the tax on movable property of organizations, which, in turn, caused a lot of discussion. According to ministry officials, starting from January 1, 2021, all enterprises should be exempt from property tax.
However, there was no abolition of property tax for enterprises in 2021. The Cabinet of Ministers of the Russian Federation submitted a proposal to maintain the benefit until 2021 at the federal level.
The authorities of the Russian constituent entities overwhelmingly expressed their disagreement on this issue and stated that they want to exercise their legal right to refuse to introduce a tax benefit on movable property of organizations in their territories.
They motivated their position by the fact that the absence of tax benefits could help increase the collection of taxes on movable property of organizations. Local authorities also pointed out that this tax relates to regional fees.
In the course of quite a long debate on this issue, the parties discussing issues related to the tax on movable property of organizations and benefits on it, came to a compromise. In particular, starting from 2021, this tax may be introduced by amendments to the Russian Tax Code in accordance with the following federal laws:
- No. 335-FZ dated November 27, 2021.
- No. 401-FZ dated November 30, 2021.
Let us note that the tax on movable property of organizations registered since 2013 (except for movable assets from interdependent counterparties in the event of reorganization/liquidation) was not subject to deduction by legal entities until 2021.
Are there tax breaks on movable assets of organizations in 2021?
Let us say right away that in 2021, in accordance with the norms of the current Russian legislation, the all-Russian tax benefit on movable assets of organizations has been eliminated. According to the provisions of Article 381.1 of the Tax Code of the Russian Federation, if in 2021 a Russian constituent entity did not adopt a law introducing a benefit for the movable property of enterprises, this means that it will not exist in 2021.
We would like to add that, based on subparagraph 8 of paragraph 4 of Article 374 of the Tax Code of the Russian Federation, from January 1, 2021, the tax on movable assets of enterprises only covers fixed assets and the 3rd and subsequent depreciation groups. Thus, the useful life of fixed assets is 3 years or more.
Let us recall that in accordance with Article 130 of the Civil Code of the Russian Federation, movable assets are all assets that are not real estate. In 2021, tax on movable property of organizations must be paid in those Russian regions where the law on the introduction of benefits is not provided for by local legislation.
Starting from 2021, paragraph 3.3 of Article 380 of the Tax Code introduces significant clarifications to the procedure for calculating tax on movable property.
In accordance with them, the maximum permissible tax rate on movable property of organizations cannot be more than 1.1%.
That is, if the local authorities of Russian constituent entities have not adopted a law on benefits, then the tax on movable assets of the enterprise in 2021 must be paid at a rate of 1.1%.
Conditions for paying tax on movable assets
The all-Russian movable property tax benefit has been liquidated since 2018. The new procedure for the functioning of the benefit is as follows: if a region of Russia did not adopt a law introducing a benefit on movable property in 2021, then from 2021 it will not exist (Article 381.1 of the Tax Code of the Russian Federation). It must be said that the regions don’t really want to introduce it anyway.
So, in Moscow there will definitely be a tax on movable property from 2021. As in most regions of Russia.
Let us remind you that by virtue of subclause 8 of clause 4 of Art. 374 of the Tax Code of the Russian Federation, from January 1, 2021, only fixed assets from III and subsequent depreciation groups (i.e., with a useful life period of 3 years) are subject to the tax on movable property.
As a general rule, movable assets are everything that is not real estate (Article 130 of the Civil Code of the Russian Federation).
In the Russian region, property tax on movable assets will have to be paid starting from 2021, unless the corresponding law of this territory introducing a benefit has been adopted.
Vehicle property tax
All car owners who purchase vehicles are aware of the Tax Code of the Russian Federation, according to which owners of motor vehicles are required to pay annual transport fees.
Due to the fact that vehicles fall under the category of movable property, some owners of the units must also pay this duty.
Both individuals and legal entities and organizations that are less fortunate have motor vehicles. After all, no measures were taken in their regard to abolish the property tax on movable units.
Therefore, institutions should be aware of vehicle tax issues.
The legislative framework
The definition of the category “movable property” is in the Civil Code of the Russian Federation in Art. 130. All property is divided into known real estate and movable objects.
The first type of objects includes land and everything that is located on it, property that cannot be moved without causing significant damage. This includes objects and unfinished construction structures.
This also applies to the category of real estate of inland navigation vessels that are registered in the name of the state.
All other objects of taxation, such as financial assets and capital (money), documents, cars and everything that can move or move without causing harm to others are considered movable property.
Do individuals pay?
Most car owners, as a result of purchasing a car, wonder whether they need to pay property tax in addition to the key duty - transport tax?
The answer is simple, you don't need to pay anything. Since the beginning of 2013, all individuals have been exempt from paying property tax on vehicles.
All motor vehicles that were registered both before the date of adoption of the order and later than January 1, 2013 were exempt from this duty. This applies to individuals.
Companies and organizations whose vehicles were registered before the specified date will have to pay the full cost of the duty. As a result, institutions began to cheat and try to circumvent the law.
They began decommissioning cars purchased before January 1 and registering new vehicles. But the tax inspectorate quickly took up this issue.
The owners of the companies, in their appeals and letters to the tax service, referred to the fact that the transport was not used and demanded additional installation of equipment, thus evading payment of duties on movable property.
And motor vehicles began to be used only after amendments were made. Institutions tried to find a way out and a compromise with the tax authorities, while individuals did not know trouble.
After all, the owners of the units, represented by a Russian citizen, do not need to pay tax on movable property; they only need to pay transport taxes.
As it says in v. 130. The Civil Code states that movable property includes cars and other types of transport.
However, there are exceptions for individuals to pay movable property tax. Although this type of transport is rarely found among ordinary citizens.
This refers to aircraft and space rockets that must be registered. However, even the largest corporations, let alone individuals, do not have these units and installations.
The majority of Russian citizens are misled by the erroneous fact that when purchasing a motor vehicle, the owner thinks that he becomes the owner of the property.
In fact, this is true, but this is the acquisition of movable property, and property tax applies only to non-movable objects, that’s all the difference.
An institution that owns certain vehicles that are subject to property tax may be subject to taxation. But this type of transport is very rare and very few institutions have it.
How to calculate the transport tax for a motorcycle, see here.
Is transport subject to corporate property tax?
There are no problems with individuals; all very simple vehicles are not subject to property tax in 2021.
But regarding legal authorities, many questions arise about who is obliged to pay movable property tax and for what, and who is granted benefits or exemption from paying duties. Let's talk about everything in order.
As the Tax Code of the Russian Federation states, art. 374 after amendments were made in 2013, all movable property registered after January 1, 2013, and registered as a fixed asset, is not subject to duty.
This includes all units that have the third depreciation group in the classification rank. That is, machines that work usefully from 3 to 5 years.
As a result, accountants, referring to the amendment to the Tax Code when calculating the tax on movable property, did not include this type of transport.
But in 2021, the Tax Code has changed, and in Art. 374. it says the following: units that belong to the first and second depreciation groups (operation of cars from 1 to two years, and from two to 3 years) are not those that are subject to taxation.
That is, the changes affected the registration date and time of registration of units for organizations.
Accordingly, all institutions do not have to pay movable property tax, even if the car was purchased and registered before January 1, 2013. But this concerns the first two groups, what to do with the third?
As stated in the Tax Code Art. 381 “Tax benefits”, then this type of transport falls under preferential taxation. That is, the tax is required, but is not paid as a result of the provision of benefits prescribed in tax legislation.
In other words, companies do not need to pay tax on movable property purchased after January 1, 2013.
What benefits are there?
Institutions that have at their disposal motor vehicles belonging to the third depreciation group can take advantage of benefits for paying property duties for organizations on movable assets.
Objects that are registered as a result of the liquidation of legal entities or their reorganization are deprived of preferential discounts.
Preferential programs for property duties are provided for organizations that are participants in the free economic zone, namely for purchased motor vehicles for the purpose of using them and conducting business for 10 years.
These benefits and amendments to legislation are aimed at avoiding tax evasion. After all, most legal entities, as a result of the reorganization of the institution, are trying to hide from debts to the state.
Due to changes in the law and amendments, not a large number of new taxpayers will be added.
After all, the majority of institutions will be exempt from paying duties as a result of using benefits (for the third depreciation group) or complete exemption from fees if motor vehicles belong to the first and other classification categories.
Only those companies that fall under the above exception (reorganization and liquidation of legal entities) will pay.
Controversial issues
Owners of organizations have controversial issues regarding benefits and nuances in obtaining them.
On the one hand, objects of movable property of the third depreciation group are subject to taxation. But on the other hand, institutions are not taxed, but receive a benefit and are deprived of an annual fee.
This information confuses many experienced accountants who doubt the inclusion of vehicles owned by organizations in the total property tax amount. After all, companies, unlike individuals, calculate their own taxes.
All taxpayers are divided into two groups – individuals and legal entities. Regarding the former, they are completely exempt from paying duties on movable property, with the exception of having jet rockets and spacecraft registered in their name.
For legal entities the situation is somewhat more complicated. This is due to the confusion surrounding laws and amendments to the Tax Code.
We conclude that organizations do not pay tax on movable property belonging to classification groups 1 and 2, but receive benefits regarding the third.
The deadline for payment of transport tax in 2021 by individuals can be found on the page.
There is information about the increasing coefficient for transport tax in 2021 for legal entities.
At what rate should the tax be calculated?
The new paragraph 3.3 of Article 380 of the Tax Code of the Russian Federation makes an important clarification regarding the calculation of tax on movable property from 2021. Thus, its rate in 2021 cannot exceed 1.1%.
Thus, if a subject of the Russian Federation has not adopted its law on benefits, then the tax must be paid at a rate of 1.1%
The concept of “movable property”
Explanations for the definition of the concept of “movable property” are provided by Article 130 of the Tax Code of the Russian Federation. If the group of immovable things consists of those objects that do not imply free movement (land plots, structures, construction projects, sea and air ships, space industry objects), then movable property refers to all objects that can be moved without causing damage to their intended purpose (cars, vehicles, money, securities, material assets, etc.). According to the legislation of the Russian Federation, they do not require registration of owner and user rights.
The regulations for the deduction of taxes on movable property of companies are prescribed in Art. 374 of the Tax Code of the Russian Federation - you should pay for things that are on the main balance sheet, as well as those that have been transferred into ownership, use and disposal for a certain period.
Where and when to pay
The Inspectorate carries out supervisory monitoring remotely and through visiting specialists. Acceptance of property tax reports from water vehicles is carried out at a time, no later than February 1 of the following year. The same period limits the transfer of the final payment of accruals. In a number of areas, monitoring periods for controlled entities may be revised. According to the general procedure, you cannot pay the tax right away; this must be done once a quarter, in advance payments.
