Article 247 of the Tax Code of the Russian Federation. Object of taxation (current version)

Who is exempt from paying income tax

The following are exempt from income tax:

• Organizations that apply special tax regimes (STS, UTII, Unified Agricultural Tax), as well as pay taxes on the gambling business.
• Participants of the project “Innovative.
• A number of foreign and international organizations (listed in clause 4 of Article 246 of the Tax Code of the Russian Federation).
• Organizations that meet certain conditions, subject to which the income received is subject to a zero rate, for example, conducting educational or medical activities (the list of income for which a 0% rate can be applied is established by Articles 284, 284.1, 284.3 of the Tax Code of the Russian Federation).

Object of corporate income tax

The object of taxation is the organization’s profit received at the end of the reporting (tax) period.

Note

: Profit is the difference between income received and expenses incurred.

Income for income tax purposes

• Revenues from sales (revenue from the sale of goods, works and services, property rights).
• Non-operating income (other income not related to sales income). A complete list of non-operating income is given in Art. 249 of the Tax Code of the Russian Federation.

Note
: the list of income not taken into account when calculating tax is given in Art. 251 Tax Code of the Russian Federation. This list is closed and, if some income is not indicated in it, they must be taken into account when calculating tax.

Expenses for income tax purposes

• Sales expenses.
• Non-operating expenses.

Sales costs, in turn, are divided into direct and indirect.
Direct expenses

are taken into account as goods are sold in the cost of which they are taken into account (depreciation expenses, wages to employees involved in the production of goods, works and services, material expenses).

Indirect costs

are taken into account in the period in which they were produced. These include all other expenses, except direct and non-operating expenses.

Note

: the list of expenses not taken into account when calculating tax is given in Art. 270 Tax Code of the Russian Federation. This list is closed; the expenses listed in it cannot under any circumstances reduce the organization’s income.

note

, in order to accept expenses to reduce income tax, they must be documented, justified and aimed at generating income. If at least one of the conditions is not met, the organization will be denied recognition of expenses.

Note

: very often tax authorities question the validity of declared expenses due to unscrupulous counterparties. You can read more about verification of counterparties here.

Object of taxation

So, the object of taxation for income tax is the profit itself received by an organization as a result of its financial and economic activities. At the same time, depending on the diversity of categories of taxpayers, various categories of income can act as profit for tax purposes.

So, for example, for Russian organizations, profit subject to taxation is the amount of income reduced by the amount of expenses. At the same time, for foreign organizations, according to the legislation in force in Russia, taxable profit is considered to be the amount of all income received by it in the territory of the Russian Federation.

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Income in general represents sales revenue (that is, the organization's revenue received from its main activity), as well as revenue received as a result of other activities that are not its main activity. For profit tax purposes, all income is taken into account without excise taxes and VAT.

The basis for recognizing income is: primary documents; other documents confirming receipt of income by the taxpayer; tax accounting documents.

Expenses are usually understood as documented and justified expenses of a business entity. All expenses of a business entity are divided into two large groups:

• costs associated with production and sales;
• non-operating expenses.

The first includes expenses necessary directly for organizing the process of production and marketing of products, works or services. These include expenses for remuneration of employees of the enterprise, the purchase of raw materials and materials, depreciation charges, etc.

Non-operating expenses are not directly related to the processes of production and sales of products. These include court fees, negative exchange rate differences, etc.

Note 2

The basis for recognizing expenses when calculating the amount of taxable profit are actually incurred by the business entity in the reporting period, documented and justified expenses.

Methods of accounting for income and expenses

The procedure for accounting for income and expenses in a particular period is determined by two methods:

1. Accrual method
   . Income and expenses are recognized in the period in which they were incurred, regardless of the date of payment and receipt of funds.
2. Cash method
   . Income and expenses are recognized in the period in which expenses were paid or funds (property, property rights) were received. Organizations can apply this method provided that for the four previous quarters, revenue did not exceed one million for each quarter (in the amount of 4 million rubles for 4 quarters).

Note

: an organization can use only one of the specified methods; combination (for example, one method for income and another for expenses) is not allowed.

More details about the methods of accounting for income and expenses for income tax can be found in Art. 271-273 Tax Code of the Russian Federation.

Calculation of corporate income tax

Corporate income tax is calculated in the following form:

Tax payable to the budget = Tax base x Tax rate – Advance payments – Trade tax

The tax base

The income tax base is determined as the difference between income and expenses (profit). If expenses exceed income, the base is recognized as zero. And no tax is paid to the budget.

note

, profit is determined by the cumulative total from the beginning of the year.

Note

: if profits are taxed at different rates, then the tax base is calculated separately for each rate.

If an organization has a loss to be carried forward, it also reduces the tax base.

Tax rate

Basic rate – 20%

. The tax paid at this rate is distributed to budgets in the following proportions:

• 3% - to the federal budget.
• 17% goes to the budget of a constituent entity of the Russian Federation.

Special tax rates

Advance payments

Advance payments are paid in one of three ways:

• Every quarter with monthly payments.
• Every quarter without paying monthly payments.
• Monthly based on actual profit.

Learn more about the calculation procedure, terms and methods of making advance payments.

An example of calculating income tax at the end of the year

The taxable income of Romashka LLC for 2021 amounted to 35 million rubles.

Expenses included in the reduction of income amounted to 15 million rubles.

The tax base will be 20 million rubles.

(35 million rubles – 15 million rubles)

Bid - 20 %

.

The tax calculated based on the results of 2021 will be equal to 4 million rubles.

(20 million rubles x 20%).

Advance payments paid during the year amounted to 3 million rubles.

The tax payable to the budget will be 1 million rubles.

(4 million rubles – 3 million rubles), of which:

• 30,000 rub. to the federal budget.
• 170,000 rub. to the budget of a constituent entity of the Russian Federation.

Tax rates

The general tax rate is 20%, of which from 2021 to 2021 3% is credited to the federal budget, 17% to the budgets of the constituent entities of the Russian Federation.

According to the laws of the constituent entities of the Russian Federation, the rate may be reduced for certain categories of taxpayers in terms of tax amounts subject to credit to regional budgets. In this case, as a general rule, the rate cannot be lower than 13.5%. However, for 2017 - 2021 this limit is reduced to 12.5%.

Special tax rates are established for certain types of income:

Income tax payable

The reporting period for income tax is quarter

,
half a year
and
9 months
.

Note

: for organizations that have chosen the method of paying advances based on actual profits (monthly), the reporting period is a month, two months, and so on until the end of the year.

The tax period for income tax is the calendar year

.

Organizations must make advance payments during the year based on the results of each reporting period (depending on the method of payment of advances).

Learn more about the calculation procedure, terms and methods of making advance payments.

Income tax is due by March 28

next year.

Tax and reporting periods

The tax period for paying income tax is a calendar year.

Reporting periods:

• I quarter
• half year
• 9 months of the calendar year

Reporting periods for taxpayers who calculate monthly advance payments based on actual profit received are one month, two months, three months, and so on until the end of the calendar year.

From January 1, 2021, there were changes to the limit on the average quarterly amount of sales revenue, which is determined for the previous four quarters. This limit has been increased from 10 to 15 million rubles.