Tax base
The obligation to pay property taxes to organizations using a simplified taxation system was imposed by Federal Law No. 52-FZ of April 2, 2014. He introduced amendments to the first paragraph of clause 2 of Article 346.11 of the Tax Code of the Russian Federation, according to which the property tax of organizations under the simplified tax system was introduced in relation to real estate objects, the tax base for which is determined as their cadastral value.
In this case, the cadastral value is determined as of January 1 of the current year (if there was no such data as of January 1, then there is no need to pay a fee). Thus, the tax base is all types of real estate that have a cadastral value at the beginning of the tax period and belong to the organization.
What applies to such property:
- Shopping and business centers, premises in them.
- Office and retail premises.
- Restaurants, cafes, canteens - public catering facilities.
- Public service buildings.
- Residential buildings and premises, we will talk about them separately.
What's new
Note!
In 2021, the corporate property tax return for 2020 is submitted on a new form. The form was approved by order of the Federal Tax Service of Russia dated August 14, 2019 No. SA-7-21/ [email protected] , which was amended by order dated December 9, 2020 No. KI-7-21/ [email protected]
Listed below are other relatively new changes related to the real estate tax of legal entities - they came into force in 2020:
- Previously, tax was imposed on real estate that was listed on the company’s balance sheet as fixed assets, but now this condition has been abolished;
- Now the tax base of such types of real estate as garages, parking spaces, unfinished construction projects, residential buildings, garden houses and other objects is calculated at the cadastral value, a full list of which is given in paragraph 1 of Article 378.2 of the Tax Code of the Russian Federation;
- Submission of advance reports has been cancelled.
Special conditions
But these are not all tax conditions. The following requirements must be met:
- The building, structure, structure or premises therein must belong to the taxpayer organization on the right of ownership or right of economic management.
- Real estate must be accounted for on the organization’s balance sheet as part of fixed assets (account 01 “Fixed Assets” or 03 “Income Investments in Material Assets”).
- The land plot under the real estate has a certain type of permitted use: for the placement of retail units, public catering and (or) consumer services; for the placement of office buildings for business, administrative and commercial purposes.
- More than 20% of real estate, according to the Unified State Register of Real Estate, is intended for use for these purposes. For example, to host trading platforms. It is important to confirm the actual use of the facility for the specified purposes in the declared volume - not less than 20%.
- Real estate is included in the list of property for which the tax base is determined as the cadastral value.
The list from the last paragraph is determined by the subject of the Russian Federation (according to the location of the real estate), it is published on the official website of this subject of the Russian Federation. You can find out the cadastral value by receiving an extract from Rosreestr about the cadastral value of the object, in accordance with Article 63 of Law No. 218-FZ.
If all conditions are met, you must pay property tax under simplification. If any condition is not met or the cadastral value is not determined, no tax liability arises for that year.
The Ministry of Finance of Russia, in a letter dated March 11, 2016 No. 07-01-09/13596, reminded that the simplified people still do not pay the property tax, based on the book value of the objects. It also states whether or not to pay property tax for individual entrepreneurs using the simplified tax system in 2021 - entrepreneurs do not have this obligation, with one exception, which will be discussed below.
How to pay taxes on the simplified tax system
To avoid paying large fines, use a ready-made solution from ConsultantPlus. Experts have sorted out all the nuances of taxes on the simplified tax system: what, how and when to pay. The link below has free access.
Residential Properties
Is property tax paid under the simplified tax system on residential buildings and premises? Residential real estate is recognized as an object of taxation. But there are exceptional rules for such objects.
A residential property is recognized as taxable if it is not listed in the organization as a fixed asset. That is, residential real estate is taxable if it is taken into account in the organization’s balance sheet in the following accounts:
- 08 “Investments in non-current assets”;
- 41 "Products";
- 43 “Finished products”.
In relation to such objects, property tax under the simplified tax system “Income minus expenses” for LLCs in 2021 is calculated according to the cadastral value (letter of the Ministry of Finance of Russia dated May 19, 2017 No. 03-05-05-01/30753, dated January 25, 2019 No. 03-05 -05-01/4064).
IMPORTANT!
If residential real estate is taken into account in or 03 “Profitable investments in material assets,” then it is not recognized as a taxable object (letter of the Ministry of Finance of Russia dated December 22, 2017 No. 03-05-05-01/86054).
About the cadastral value of real estate
So, property tax under the simplified tax system in 2021 is paid on objects assessed exclusively by cadastral value. Article 378.2 of the Tax Code of the Russian Federation talks about which real estate objects are subject to such an assessment. These include:
- administrative, business and shopping centers;
- non-residential premises for offices, trade, catering or services;
- certain real estate of foreign organizations;
- residential real estate, garages, parking spaces, unfinished construction projects, garden houses, outbuildings on plots.
Property taxes for legal entities and individuals are considered regional. Each subject of the Russian Federation independently approves the procedure for determining the cadastral valuation of real estate and adopts a law on its use as a tax base.
Property tax for individual entrepreneurs using the simplified tax system
By virtue of Article 346.11 of the Tax Code of the Russian Federation, the use of the simplified tax system by individual entrepreneurs provides for their exemption from payment of property tax for individuals in relation to property used in business activities. There is an exception. How to find out whether it is necessary to pay property tax based on the cadastral value of an individual entrepreneur - find out whether the real estate owned by him is included in the list of administrative, business and shopping centers approved by the constituent entity of the Russian Federation in accordance with paragraph 7 of Article 378.2 of the Tax Code of the Russian Federation. If yes, then you will have to pay tax.
The specifics of calculation and payment for individual entrepreneurs are regulated by Chapter 32 “Property Tax for Individuals” of the Tax Code of the Russian Federation, introduced by Federal Law No. 284-FZ of October 4, 2014. Article 400 of the Tax Code of the Russian Federation states that payers of property tax for individuals are recognized as all citizens who have the right of ownership of property recognized as an object of taxation. This applies equally to individual entrepreneurs.
The basic rules that individual entrepreneurs must adhere to when calculating the amount payable are as follows:
- By virtue of Article 405 of the Tax Code of the Russian Federation, the tax period is a calendar year.
- According to the provisions of Article 408 of the Tax Code of the Russian Federation, the amount payable is calculated by the Federal Tax Service upon the expiration of the tax period. This amount is determined by tax authorities separately for each taxable item.
- It is necessary to pay the property tax of individual entrepreneurs under the simplified tax system no later than October 1 of the year following the expired tax period, this is stated in Article 409 of the Tax Code of the Russian Federation.
- The amount must be calculated and paid at the location of the property. For example, if an individual entrepreneur is registered in one region, and the property is in another, payment is made at its location.
Now we know that individual entrepreneurs themselves do not calculate the amount to be paid and do not report to the Federal Tax Service. The tax notice will be sent to him by the Federal Tax Service itself at the location of the property. Also, the individual entrepreneur does not make any advance payments. But individual entrepreneurs, like legal entities, have questions related to cadastral value.
Calculation features
Each object of taxation is considered by the inspectorate separately, and the amount that must be paid within the prescribed period is calculated. The notification indicates the amount of tax, information on the object, and deadlines for payment. Payments are not calculated independently.
If the property belongs to several citizens, then payments are calculated in proportion to the shares of property. Tax payments on the joint property of the spouses (if each has ownership rights) are paid in equal shares.
From the moment of registration of property rights, the individual entrepreneur automatically becomes the payer. The following three points are decisive when the question arises whether an individual entrepreneur pays property tax:
- Real estate is officially registered property and is used for income generation purposes.
- The object is located on the territory of a region that adopted a law on property tax on the simplified tax system, taking into account the cadastral value.
- The property is included in the list approved by local authorities. This list contains a listing of objects recorded at cadastral value.
Thus, an entrepreneur using the simplified tax system does not make payments from his own property, which is used to make a profit, but is not registered in the list of objects approved by the regional authorities.
How to deal with cadastral value
An organization or individual entrepreneur using the simplified tax system has found out that they are obliged to pay tax on the cadastral value. How to do this practically? First of all, on the basis of Art. 378.2, the tax base in the entity in which the company is registered as a taxpayer must be established by the cadastral value of real estate. It’s easy to find out on the Rosreestr website.
If disagreements arise based on the results of the assessment, the value of the object can be challenged in court or out of court. In the second case, you should submit an application within six months from the date the object was entered into the cadastral register to a special commission dealing with this issue. This requires compelling reasons: either the area of the property is incorrectly determined, or the cost does not correspond to the market assessment. You will also need to attach the necessary documents:
- cadastral passport;
- documents on the ownership of the disputed property, certified by a notary;
- documents on the basis of which you claim that the cadastral valuation is biased;
- conclusion of an expert member of the SRO on the assessment of the market value of the property.
If after the appeal the cadastral value has changed, then the amount payable is recalculated from the beginning of the period, even if the decision was made in December.
How to calculate the amount to be paid
Since the property tax is a regional tax, all amendments to federal legislation are approved by local authorities. This applies to both rates and the obligation to pay. The tax base is always the cadastral value of the property. If there are several such objects, then calculations must be made for each of them. The fee rate is determined by the authorities of the constituent entity of the Russian Federation. The Tax Code of the Russian Federation only determines the maximum rates from 0.1% to 2%, depending on the type of object. Property tax benefits for individual entrepreneurs using the simplified tax system by region are established by regulations adopted by local authorities. The Tax Code grants them such powers.
Legal entities are required to make advance payments every quarter. The procedure for their calculation is determined by Article 382 of the Tax Code of the Russian Federation: the amount of the advance payment is calculated once a quarter as 1/4 of the cadastral value of real estate as of January 1 of the year that is the tax period, multiplied by the corresponding tax rate.
If the cadastral value of the entire building or structure is determined, and the payer owns only part of it, the tax base is calculated in proportion to the area.
The deadlines within which it is necessary to transfer the fee to the budget and submit reports are set by local authorities.
Calculation example
The calculation of property tax for organizations is carried out according to the formula:
Cadastral value * Rate.
You can find out the cadastral value on the Rosreestr website.
The advance payment is calculated as follows:
Cadastral value * Tax rate / 4.
If regional authorities have not established a tax reporting period, then it must be paid in a lump sum at the end of the year.
Let’s say the cadastral value of the office premises of an organization from the Arkhangelsk region is 10,000,000 rubles. When calculating real estate tax of this type, a rate of 1% applies to payers of the simplified tax system (Article 2 of the Law of the Arkhangelsk Region dated November 14, 2003 No. 204-25-OZ). The tax amount for the year will be: 10,000,000×1% = 100,000 rubles. The advance payment will be equal to: 100,000 / 4 = 25,000 rubles.
Accounting
Organizations using the simplified tax system are required to maintain accounting records, and they need to reflect all tax transactions in them. To reflect accrued amounts of property tax in accounting, follow the general rules for recognizing expenses. Thus, in PBU 10/99, all expenses of the organization, depending on their nature, conditions of implementation and areas of activity, are divided into:
- expenses for ordinary activities;
- other expenses.
All expenses other than expenses for ordinary activities are recognized as other. The calculated amounts relate to expenses for ordinary activities. The Ministry of Finance warns about this in letter No. 03-05-05-01/16.
To make accounting entries, the instructions for using the chart of accounts for accounting the financial and economic activities of organizations, approved by Order of the Ministry of Finance of Russia dated October 31, 2000 No. 94n, are used. It says that entries in property tax accounting are reflected by an entry in the debit of account 26 “General business expenses” and the credit of account 68 “Calculations for taxes and fees.” The wiring looks like this:
- Debit 26, 44 Credit 68 - accrued;
- Debit 68 Credit 51 - transferred.
