VAT in 2021 - overview of changes

Some buyers became tax agents

First of all, the latest news about changes to VAT in 2021 was brought by Federal Law No. 335-FZ of November 27, 2017 (hereinafter referred to as Law No. 335-FZ). According to it, from January 1, purchasers of a number of goods must perform the duties of tax agents for VAT. These changes apply to the VAT on scrap metal from 2021. And also (new clause 8 of Article 161 of the Tax Code of the Russian Federation):

ferrous metal and non-ferrous metal waste;
raw animal skins;
secondary aluminum and its alloys.

Sales of these types of goods in Russia are no longer exempt from value added tax. That is, the buyer, as a tax agent, calculates VAT. An exception is made only for ordinary individuals who do not have individual entrepreneur status.

Let us recall that tax agents must calculate and transfer to the treasury the appropriate amount of VAT, regardless of whether they are responsible for paying this tax.

Tax agents on the general system (OSN), together with the tax calculation, can declare the corresponding deduction. That is, in fact, do not transfer money to the treasury.

Also see “How to calculate VAT”.

Uniform VAT rate and exceptions for taxpayers

In the Russian tax system, value added tax is usually calculated at a standard rate of 18%. This rate is established by Tax Legislation, namely Chapter No. 21 called “value added tax” of Part II of the Tax Code of the Russian Federation dated August 5, 2000 No. 117-FZ. This Chapter contains 35 articles and regulates the characteristics of the tax in more detail.

There are 3 main rates of value added tax:

The basic calculation rate is 18%. This rate is used to calculate the tax for most groups of goods.
Rate 10%. We can say that such a rate is a kind of relaxation for entrepreneurs involved in the sale of:
children's goods;
medical supplies;
scientific literature.
Rate 0%. This rate mainly applies to export goods.

By the way, recently an amendment to the law was adopted that affected the activities of certain categories of participants in export transactions. Previously, taxpayers whose activities include the provision of railway rolling stock and containers for the transportation of goods for export could qualify for a 0% VAT rate only if they owned the above objects. So, as of January 2021, this condition has lost its force, that is, the legislation has expanded the boundaries of this activity.

Entrepreneurs who provide work services to government agencies are exempt from VAT, that is, they have a 0% rate. The 0% rate also applies to the provision of services for the development of state-owned enterprises.

The tax is not levied on the sale of all types of space goods, as well as on the transportation of oil, gas and precious metals.

A more detailed list of goods, the sale of which is permitted at a 0% VAT rate, is presented in Article No. 164 of the Tax Code of the Russian Federation. In general, the legislation contains more than 100 points of relief for payers of this tax.

When there is no right to deduct input VAT

Also, changes to VAT from January 1, 2021 affected recipients of subsidies and investments from the treasury. From this date, payers do not have the right to deduct input VAT on goods, works or services purchased at the expense of these government funds (new clause 2.1 of Article 170 of the Tax Code of the Russian Federation).

There is no right to deduct VAT even if the subsidy goes to the authorized capital of the enterprise.

In connection with this amendment, the tax restoration mechanism is spelled out in more detail, when the subsidy pays for the purchase price, but partially.

Also see “The most common VAT violations for 2021”.

What is VAT? Who pays it and to whom?

Value added tax is a federal indirect tax. Simply put, VAT is an additional surcharge on the final cost of a product. That is, an entrepreneur, indicating the final price of a product (product), already includes in it the amount of value added tax for this product. In fact, this tax is “paid” to the seller by the buyer. At the time of making a purchase (transaction). However, legally it is the seller who is the payer of this tax, and it is he who submits the report to the tax authority.

In simple words, the VAT system can be explained as follows: the seller of goods is, relatively speaking, the collector of this tax, and the person making the purchase is the direct payer of this indirect tax.

It is worth noting that VAT is paid only on revenue, that is, on the difference between the final cost of the product and its cost.

How does VAT affect the formation of prices for future products? In general, the cost of a product (good) consists of many components, the standard of which are:

Cost of material;
Potential profit (revenue) from sales;
Excise taxes (including value added tax).

By the way, in view of the latest changes in Tax Legislation, namely: in paragraph 6 of Article No. 168 of the Tax Code of the Russian Federation , from January 1, 2021, when selling goods at retail, VAT must be indicated on the receipt. This amendment was introduced by Federal Law 349 “On Amendments to Part Two of the Tax Code of the Russian Federation” dated November 27, 2017 . But on price tags such a mark is not mandatory.

In general, VAT is usually calculated in 2 ways:

Addition . In this method, the final amount of value added tax is calculated by adding the price premiums for each type of goods sold.
By subtraction . This method is used in the vast majority of cases. It is quite simple to calculate: VAT is calculated on the total net profit from sales, and the tax paid earlier - at the time of purchasing materials or raw materials - is subtracted from the amount received.

Zero VAT for re-export: conditions

Operations for the sale of goods exported as part of re-export were affected in 2021 by a change in the VAT rate to zero (Federal Law No. 350-FZ dated November 27, 2017, hereinafter referred to as Law No. 350-FZ). In this case, a mandatory condition of 0% VAT is if previously the goods (including processed products, waste, residues) underwent the following customs procedures (subclause 1, clause 1, article 164 of the Tax Code of the Russian Federation):

processing in the customs territory;
free customs zone;
free warehouse.

According to the law, in order to confirm zero VAT for re-export, you need to submit to the Federal Tax Service, among other things, the following documents:

original or copy of a foreign trade contract;
original or copy of customs declarations;
copies of transport and shipping certificates.

Right to refuse zero VAT on exports

It has become possible to abandon the zero VAT rate for exports and related services - this is another new thing in the payment of VAT in 2021 thanks to Law No. 350-FZ (new edition of Article 164 of the Tax Code of the Russian Federation).

These changes give exporters the right to refuse the 0% VAT rate:

directly when exporting goods;
their transportation.

To do this, you need to submit a corresponding application to the tax office. The deadline is until the 1st day of the quarter from which the company wants to deduct VAT at a rate of 10 or 18%.

And you can’t:

apply different rates to a product even when purchased by different people;
selectively waive zero VAT on specific transactions.

In addition, if you refuse zero VAT, you can return to it only after 1 year.

The general meaning of these VAT amendments in 2021 is as follows:
Export zero VAT is not easy to apply, since you need to prove your right to such a rate, otherwise the tax will have to be paid in the amount of 18% for the entire chain of counterparties;
You can deduct VAT on invoices with VAT 18, not 0%.

Documents for zero VAT on parcels abroad

When exporting goods by mail, the zero VAT rate from 2018 allows the new law to be confirmed by payments (originals or copies) and a declaration in the CN 23 form:

In addition to payments, you can choose what to submit from 2 options (new sub-clause 7, clause 1, article 165 of the Tax Code of the Russian Federation):

original or copy of the CN 23 declaration (with Russian customs marks);
original or copy of the customs declaration (with Russian customs marks) and original or copy of the CN 23 declaration.

The point is that for 2021, a separate list of supporting documents for international postal parcels was not clearly stated in the Tax Code of the Russian Federation.

Positive changes in VAT in 2021 for legal entities are that when sending postal parcels abroad, a foreign trade contract is not needed to confirm 0% VAT (changes were made by Law No. 350-FZ).

Let us remind you that export VAT must be justified 180 calendar days after the start of this customs procedure. The documents are submitted along with the declaration for this tax.

Also see “New VAT return form from 2021: what has changed in it.”

VAT in the tax system

Every citizen of the Russian Federation is a taxpayer of one tax or another. Whether it is an individual, an individual entrepreneur, or an organization, everyone must pay taxes. What rules exist for paying value added tax?

First, you need to know that the tax period for paying value added tax is 1 quarter. Accordingly, it is necessary to submit reports to the tax authorities quarterly.

Secondly, it is important to remember the strict reporting deadlines, failure to comply with which will result in fines. Reporting must be done strictly before the 25th day of the month following the reporting quarter. The fact is that, in accordance with paragraph 1 of Article No. 174 of the Tax Code of the Russian Federation, the payment of quarterly tax is divided into 3 parts, and every month the taxpayer must pay 1/3 of the total amount of tax received in the previous quarter.

A year and a half ago, changes were made to fill out a tax return. The Order of the Federal Tax Service of Russia dated December 20, 2021 No. ММВ-7-3/ [email protected] [email protected] was issued ] » (Registered with the Ministry of Justice of the Russian Federation on January 11, 2021 No. 45170).

The declaration must be completed using a new special form. And after the changes adopted by the Law, it is now possible to submit reports only in electronic form. In this case, the taxpayer must have access to the Internet and an electronic qualified digital signature. Of course, it was easier before - you could send a report by mail, but now you can forget about this form of filing a declaration. Letter No. OA-4-17/1350 of the Federal Tax Service dated January 30, 2015 clearly states that reporting not submitted in electronic form will be considered unsubmitted, and the taxpayer will be fined after the 25th of the month.

The “five percent rule” has been clarified

Regarding VAT, new legislation in 2021 affects companies that have taxable and non-taxable transactions. Changes were made by Law No. 335-FZ.

Thus, clause 4 of Art. has been clarified. 170 of the Tax Code of the Russian Federation, which talks about the “five percent rule”. In particular:

compliance with it allows you to deduct input VAT in its entirety, while from 01/01/2018 it is impossible not to maintain separate accounting;
This rule does not apply when the goods are involved only in non-VAT-taxable transactions.

The “5 percent” VAT rule was amended in 2018

In 2021, the “5 percent” VAT rules were clarified (introduced by No. 335-FZ), allowing input VAT to be fully deducted. The adjustments apply to organizations conducting operations both taxable and not subject to value added tax. The changes are as follows:

it is necessary to maintain separate accounting to accept input VAT for deduction in full;
the rule does not apply if the organization conducts transactions that are not subject to VAT.

Let us recall what the calculation formula for the 5% rule looks like:

Costs associated with sales not subject to VAT (per quarter) / Total costs associated with sales (per quarter) X 100% ≤ 5%.

Tax free law

For foreigners, changes in the payment of VAT from 2021 will be especially relevant. The fact is that Law No. 341-FZ dated November 27, 2017, finally introduced a tax-free mechanism in Russia on January 1. This is the right of foreigners (not from EAEU countries) to receive a VAT refund on purchases made in Russia (tax free).

Moreover, the new VAT refund system definitely does not apply to excisable goods. It is possible that the Russian Government will expand this stop list.

To receive a VAT refund, a foreigner must purchase goods worth at least 10,000 rubles within 24 hours. You can return the tax by bank transfer or in cash through the operator at the airport. This is regulated by the new Article 169.1 of the Tax Code of the Russian Federation.

It is important that sellers who participate in the tax free mechanism will be able to deduct VAT that was returned to foreign individuals. It is believed that this is a very beneficial system for the budget of our country.

But who can acquire the status of such a seller? To do this, you need to meet 3 mandatory conditions:

1. The enterprise (its division) is engaged in retail trade.

2. It deducts VAT.

3. Included in the special register of the Ministry of Industry and Trade of Russia.

And that's not it. The Government of the Russian Federation, by a separate resolution, establishes:

locations of such trading firms;
conditions that they must meet in order to be included in the tax free system.

At the request of a foreigner, you will have to issue a VAT refund check in one copy based on one or more cash receipts. There will be no mandatory tax free check form, but requirements for its mandatory details remain.

As a result, the tax will be returned to the seller on the basis of a tax free check with a customs mark on the export of the goods and provided that the VAT on it is compensated to the foreigner. The deduction is due to the seller within 1 year from the day when the foreigner is compensated for VAT.

Tax authorities do not have the right to refuse a deduction to the seller if there are inaccuracies in the tax free checks that do not interfere with identifying the information:
about the retailer;
the country that issued the foreigner’s passport;
product name;
VAT amount.

Let us clarify that foreigners will be reimbursed for VAT directly by trading companies or other payers who have entered into agreements with them. These services are subject to 0% VAT. The right to zero tax, of course, will have to be confirmed. But from 10/01/2018 it will be easier to do this.

Latest changes in the procedure for paying VAT in 2018

On June 14, the Government of the Russian Federation decided to increase the VAT rate. The VAT rate will be increased from 18% to 20%, Russian Prime Minister Dmitry Medvedev said at a government meeting.

At the same time, according to Dmitry Medvedev, all VAT benefits for basic services and socially significant goods will be preserved (food, children's and medical goods, domestic interregional air transportation).

According to Russian Finance Minister Anton Siluanov, the new VAT rate will take effect on January 1, 2021. An increase in VAT by 2% will bring the country’s budget an additional 600 billion rubles. annually. Additional money will be used to solve the country's strategic objectives.

The list of airport services will be established by the Government of the Russian Federation

As you know, there is no VAT on services provided directly at Russian airports and the airspace of our country for aircraft maintenance, including air navigation services (subclause 22, clause 2, article 149 of the Tax Code of the Russian Federation). But what exactly are these airport services? It seems that the long-standing confusion on this issue has come to an end.

Thus, Law No. 305-FZ dated October 30, 2017, with amendments to the Tax Code of the Russian Federation, says that from January 1, 2018, the list of airport services that are free of VAT is determined by a separate document by the Government of the Russian Federation.

No VAT when transferring target property in special economic zones

Based on the Law of November 27, 2017 No. 351-FZ, from January 1, 2018 there is no VAT on the free transfer to regional and municipal authorities of property created for the implementation of agreements on the creation of special economic zones - SEZ (Articles 146 and 170 of the Tax Code of the Russian Federation).

Example
A joint-stock company, 100% of the shares of which belongs to the Russian Federation, created within the SEZ, transfers property to companies created with its participation - SEZ management companies.

In addition, SEZ JSCs and management companies are no longer required to restore the amounts of VAT previously deducted on such property.

No VAT when releasing materiel from the state reserve

By virtue of the Law of November 14, 2017 No. 316-FZ, from January 1, 2018, the release of material assets to responsible custodians and borrowers from the state reserve is exempt from VAT due to:

their refreshment;
replacements;
in order of borrowing.

Special rules for determining the tax base and the procedure for determining the VAT rate for the sale of valuables by responsible custodians and borrowers are also regulated.

Also see “What will change in 2021: taxes, insurance premiums, reporting, accounting and a new fee.”