Russian farmers will be required to pay VAT in 2021

Changes in 2021

The new law of November 27, 2017 No. 335-FZ, adopted by the State Duma, introduced a number of changes to the procedure for paying this tax. The main innovation was that from 2021, Unified Agricultural Tax payers were obliged to pay property tax, and from 2021 they must become VAT payers.

The rules for working with VAT in 2021 remain the same - payers of the Unified Agricultural Tax are exempt from paying it, as well as:

• if VAT is accepted for deduction before the transition to the payment of unified agricultural taxes, it cannot be restored;
• VAT presented after leaving the special regime is not subject to deduction (clause 8 of Article 346.3 of the Tax Code of the Russian Federation).

From 2021, taxpayers of the Unified Agricultural Tax will be able to exercise the right to exemption from VAT (if there are grounds) in accordance with the provisions of Art. 145 of the Tax Code of the Russian Federation.

The obligation to pay property taxes has also increased the burden on agricultural businesses. From 2021, entrepreneurs and legal entities producing agricultural products will be able to avoid paying this tax only on property used directly in the production, processing and sale of agricultural products.

Documents for the Federal Tax Service

Payment of remuneration to staff turns a businessman into a tax agent. It must ensure timely calculation of taxes and contributions from employee salaries. All amounts must be reflected in special forms.

If it was not possible to withhold personal income tax from the employee before the end of the tax period, a corresponding message is sent to the inspectorate before March 1 (clause 5 of Article 226 of the Tax Code of the Russian Federation).

Who has the right to apply the Unified Agricultural Tax?

In accordance with clause 2.1 of Art. 346.2 of the Tax Code of the Russian Federation, the unified agricultural tax in 2021 can be applied by producers of agricultural products, which include:

• legal entities and individual entrepreneurs who are comprehensively engaged in the production of agricultural products, primary and subsequent processing and sales (if the entity is engaged only in the processing of agricultural products, it will not be able to switch to the Unified Agricultural Tax), the share of income from the sale of agricultural products in the total income of which is at least 70% (during the year, preceding the transition);
• economic entities providing auxiliary agricultural services, the share of income from which is at least 70% (such services include preparing fields, sowing seeds, cultivating land, as well as grazing animals, examining and caring for them, etc.);
• agricultural cooperatives subject to the same 70 percent limit;
• fishery entities (provided that the number of hired workers does not exceed 300).

The full list of products related to agricultural products is approved by Decree of the Government of the Russian Federation dated July 25, 2006 No. 458.

Organizations and entrepreneurs who:

• produce excisable products;
• organize gambling;
• belong to budgetary, state or autonomous institutions.

Declaration on the unified agricultural tax

The basic report form was approved by the tax department by order No. ММВ-7-3 / [email protected] dated 07.28.14. The form includes four sheets, each of which is intended for specific data. Information is entered manually or by printing device.

1. Front page. Payers indicate the identification number, their data (full name, OKVED), contact numbers, tax period. At the bottom of the form, the date of filing the report is indicated and information about the taxpayer or his representative is reflected.
2. Amount of Unified Agricultural Tax. The second sheet should contain the tax calculation. The calculation is based on KUDiR data. Separate lines include information about total income, business expenses, the applicable rate, and advance payments. The tax subject to restoration or additional payment to the budget is also reflected here.
3. Loss data. The sheet is filled out if the result of economic activity is negative. Clause 5 of Article 346.6 of the Tax Code of the Russian Federation allows losses to be carried forward to subsequent reporting periods for 10 years.
4. Information about the intended use of resources. The third section of the form is intended to reflect transactions with property transferred as a grant or charitable assistance.

The single agricultural tax is calculated on net profit. The principle is enshrined in Articles 346.4, 346.5, 346.6, 346.7, 346.9 of the Tax Code of the Russian Federation.

Example: During 2021, a farmer earned 3,700,000 rubles using the Unified Agricultural Tax (6% rate). Part of the proceeds in the amount of 1,200,000 was received before the beginning of July. All business expenses had to be incurred in the second half of the year. Their size was 1,900,000 rubles. There are no hired employees on the farm. All the work is done by four members and the farmer himself. Fixed insurance premiums were paid in full in December 2021.

The received data remains to be entered into the second sheet of the form. How to fill out the declaration is described in detail in the appendix to the order of the Federal Tax Service of the Russian Federation No. ММВ-7-3 / [email protected] dated 07.28.14. In addition to basic explanations, the regulations contain technical requirements.

According to Article 346.10 of the Tax Code of the Russian Federation, the annual report must be sent to the tax authority no later than March 31. When the average number of personnel reaches 100 people, information is submitted electronically. The corresponding rule is enshrined in paragraph 3 of Article 80 of the Tax Code of the Russian Federation.

The declaration is not the only report of Unified Agricultural Tax payers. Farmers must transmit information about insurance premiums for themselves and members of peasant farms (clause 3 of Article 432 of the Tax Code of the Russian Federation). The calculation must be sent to the inspectorate at the place of registration at the end of the year. The obligation must be fulfilled by January 30.

Important! Form KND 1151111 replaced RSV-2. The current form and recommendations for filling it out are contained in Tax Service Order No. ММВ-7-11 / [email protected] dated 10.10.16.

How is the transition to unified agricultural tax carried out?

The transition scheme to the single agricultural tax in 2021 is as follows:

• the owner of an agricultural business must notify his Federal Tax Service about the transition to the Unified Agricultural Tax by December 31 of the year preceding the transition;
• if the business entity was created in 2021, it notifies the Federal Tax Service within 30 days from the date of registration;
• the notification is drawn up in free form or according to Form No. 26.1-1, it must indicate the share of income from the sale of agricultural products;
• if a business entity has already become a payer of the Unified Agricultural Tax, it will not be able to voluntarily switch to another regime during the reporting year.

If an entity no longer meets the requirements that give it the right to apply the Unified Agricultural Tax, it is obliged to report this to the Federal Tax Service (within a month after the end of the tax period, i.e., the year), and switch to OSNO. In this case, it is necessary to recalculate all taxes according to the general system (income tax or personal income tax, property tax, VAT) from the beginning of the year in which the right to the Unified Agricultural Tax was lost.

The Unified Agricultural Tax payer is given 15 days to report a voluntary transition to a different tax regime starting from the new year - until January 15 of the year in which the transition is planned. It will be possible to switch back to the Unified Agricultural Tax only after a year.

What are the deadlines for paying the Unified Agricultural Tax for 2020 and is there any liability for violating them?

Business entities pay the unified agricultural tax twice a year:

• at the end of the first half of the year, an advance tax payment is made; the deadline for its payment is July 25;
• at the end of the year, the amount of tax calculated for payment is transferred minus the advance payment already paid; Here you need to make the transfer before March 31st.

Transferring the advance payment and the tax itself later than the deadlines established by law is fraught with the imposition of sanctions by regulatory authorities. Sanctions are expressed in the form of penalties under Art. 75 of the Tax Code of the Russian Federation. If the tax authorities identify non-payment or incomplete payment of tax at the end of the tax period during an audit, this may already result in a fine calculated in the amount of 20 or 40% of the amount of tax not transferred on time (Article 122 of the Tax Code of the Russian Federation). In addition, it is possible to face administrative and, in some cases, criminal liability.

ConsultantPlus experts told which KBK the Unified Agricultural Tax should be transferred to. If you do not have access to the K+ system, get a trial online access for free.

Checking eligibility criteria

The transition to the unified agricultural tax is possible for:

• firms and individual entrepreneurs;
• agricultural consumer cooperatives (the requirements for them are established by the law of December 8, 1995 No. 193-FZ on agricultural cooperation);
• peasant (farm) farms,

if they are agricultural products:

• produce;
• recycle;
• implement.

And at the same time, the share of income from the sale of agricultural products produced by them (including primary processing) in the total amount of income is at least 70%.

If the agricultural producer deals with fish (catch, grows or processes it), in addition to the above criteria, he needs to check the one-time fulfillment of special conditions.

So, the following can switch to Unified Agricultural Tax:

• fishing companies and individual entrepreneurs;
• domestic city- and settlement-forming fishery companies, if the number of family members working and living with them is at least half the population of such a settlement;
• fishing artels (collective farms) and agricultural cooperatives.

The specified categories of “fishermen, fish breeders and fish processors” can make the transition to the Unified Agricultural Tax if they:

• small (average number of employees no more than 300 people per year);
• use your own or chartered vessels of the fishing fleet for fishing;
• have a minimum acceptable share of income from the sale of catch and (or) fish products produced on their own (or other products from aquatic biological resources) in total income - 70%.

If all criteria are met, the transition to unified agricultural tax is possible.

The procedure for switching to payment of agricultural tax with an example of calculation

If the above condition regarding the presence of a share of agricultural products in trade turnover is met, entities have the right to switch to the Unified Agricultural Tax from any other taxation regime. You just have to submit a corresponding notification to the Federal Tax Service inspectorate. The deadline for its submission is no later than December 31. If the subject is newly registered, the right to submit the relevant notification is retained for the first 30 days.

If all conditions are met, including filing the notification required to apply the special regime, activities can begin without waiting for approval from the Federal Tax Service: for existing entities - from the beginning of next year, for newly opened ones - from the moment of registration.

Example. Does an organization have the right to switch to paying unified agricultural tax if the following conditions are met? The total revenue amounted to 2,815,653 rubles, with processed agricultural goods accounting for 2,396,420 rubles of revenue. The share from the sale of agricultural products of own production was: 2,396,420/2,815,653 *100%=85.1%, which is higher than the required level of 70%. Thus, the organization has the right to switch to the Unified Agricultural Tax from the beginning of next year, having previously notified the tax office.