The organization operates without VAT - features of mutual settlements

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Published: 07/11/2017

Reading time: 5 min

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The term “Value Added Tax” (the abbreviated and more commonly used name is VAT) hides a tax levied on organizations that, in the course of their activities, create additional value (in other words, sell a product/service at a price higher than the purchase price).

The procedure for calculating VAT is very simple, it is defined as the difference between the new and previous price (in other words, the difference between the proceeds received by the company from the sale minus the costs of purchasing from suppliers). It does not matter whether we are talking about resale at a higher price, or about any improvements to this product.

Grounds for exempting organizations from paying VAT
Benefits of VAT exemption
Disadvantages of VAT exemption

Organizations on OSNO

First of all, organizations and individual entrepreneurs are required to pay VAT under the general taxation system. Every quarter, such companies submit VAT reports, and since 2014 this must be done electronically via the Internet. The Kontur.Extern system helps to cope with this task. Everything is simple in Externa - just come in and start working. The extern will review your report before submitting and point out formatting errors if any. Even if you are not at the computer, the system will notify you about the status of the report via SMS.

Take advantage of all the features of Kontur.Externa

Send a request

In what cases does an LLC not pay VAT?

Anyone who meets three conditions at once, outlined in paragraph 1 of Article 145 of the Tax Code of the Russian Federation, can become enterprises operating without VAT:

application of a common taxation system;
lack of sales of excisable goods;
for the 3 months preceding the application for the right to release, the revenue did not exceed 2 million rubles. (in this case, the months must follow each other and the last of them precedes the submission of the application).

In the Letter of the Federal Tax Service dated May 12, 2014 No. GD-4-3/ [email protected] it is explained that the specified revenue is determined by:

from the sale of goods (works, services) subject to VAT;
VAT is not included in the calculation of the total amount.

Taxpayers can obtain exemption from VAT only in relation to domestic transactions subject to this tax. That is, you will still have to pay VAT when importing goods into the territory of the Russian Federation (clause 3 of Article 145 of the Tax Code of the Russian Federation).

Please note the changes from January 1, 2021 (Part 12, Article 9 of Federal Law No. 335-FZ of November 27, 2017). They affected Unified Agricultural Tax payers. In general, such companies are now:

are recognized as VAT payers;
A special procedure applies for their exemption from VAT.

Organizations combining UTII and OSN

If a company combines UTII and the general taxation regime, the income it receives from activities on the “imputed” basis is not subject to VAT. In order not to pay tax, it is necessary to keep separate VAT records for OSN and UTII, observing the following conditions:

if, for activities under UTII, an organization or individual entrepreneur buys goods (services) with VAT, then the amount of VAT must be taken into account in the cost of these goods (including fixed assets and intangible assets);
If, for activities on the OSN, an organization or individual entrepreneur purchases goods (services) with VAT, then the amount of VAT is deducted in accordance with the Tax Code of the Russian Federation.

But there are some costs for which it is impossible to separately account for VAT for UTII and VAT for OSN. Such costs include, for example, office rent or utility bills. In this case, the amount of “input” VAT should be distributed in proportion to how these goods (services) are used in each type of activity.

Also, do not forget to submit a VAT return and pay tax every month, no later than the 25th day of the month following the reporting quarter.

When the buyer does not pay VAT

Let's consider the case when the selling company uses VAT, and the buyer works without this tax. It is clear that the documents received by the buyer will indicate the amount of tax included in the final purchase amount. But the invoice itself is allowed not to be drawn up for the buyer if there is a written agreement of the parties. Such permission is contained in sub. 1 clause 3 art. 169 of the Tax Code of the Russian Federation.

However, the seller must still prepare an invoice according to all the rules and enter it into the sales book. If this is not done, the tax authorities consider this as an understatement of the tax base and apply appropriate sanctions.

If the organization operates without VAT

and acts as a buyer, then the tax indicated separately in the documents of the selling company can be taken into account:

Fully and at a time when reflecting the cost of received objects in accounting. This method is available to those companies that fall under the provisions of Art. 145 and 145.1 of the Tax Code of the Russian Federation, as well as companies using UTII in their activities. In this case, the features specified in paragraph 7 of Art. 346.26 Tax Code of the Russian Federation.
In a special order, when accounting for VAT depends on the type of expenses to which this tax is attributed and whether it has been paid. If all conditions are met, the purchasing company has the right to include it in costs and reduce the tax base. This method is available to some organizations that use regimes such as the simplified tax system and unified agricultural tax, which is stipulated by the norms contained in subclause. 8 paragraph 2 art. 346.5 ch. 26.1 Tax Code of the Russian Federation and sub. 8 clause 1 art. 346.16 ch. 26.2 Tax Code of the Russian Federation.

Features when documenting a transaction are as follows:

Firstly, in the payment documents, where the basis for the payment is given, when transferring funds, the purchasing company must indicate the allocated VAT included in the total payment amount.
Secondly, the selling company, having received an advance from a non-payer of this tax, has the right to issue an invoice only for itself, if the transaction partner who does not pay VAT does not require such a document.

VAT for organizations using the simplified tax system

Entrepreneurs using the simplified tax system are exempt from paying a number of taxes: in particular, organizations do not pay profit tax and VAT, and individual entrepreneurs do not pay personal income tax and property tax. But there are still a number of exceptions in which LLCs and individual entrepreneurs using the simplified tax system are required to pay VAT:

when importing goods into the territory of the Russian Federation;
if the taxpayer issues an invoice that includes VAT;
when carrying out operations under a joint activity agreement or a property trust management agreement on the territory of Russia.

In these situations, it is necessary to pay VAT and submit a VAT return.

If the counterparty (supplier) indicates VAT on the simplified tax system in the invoice, then the recipient of the goods on the simplified tax system can safely pay this invoice, since VAT in this case is the supplier’s tax. A buyer using the simplified tax system (regardless of the taxation option) is not required to pay tax and submit a VAT return. Goods purchased with VAT must be sold without taking into account the amount of VAT.

Advantages of working with VAT

Many large enterprises prefer to work only with VAT counterparties. Organizations operating without VAT have a greater risk of being rejected by a potential client or supplier. This is the main benefit of switching to VAT. A company that is not a VAT payer has to think about how to increase its competitive attractiveness. This means that VAT evaders need to look for and advertise their advantages, which will make cooperation with them profitable. The main advantage of working with VAT is the ability to deduct tax on all purchased goods or services. Despite the fact that VAT is refunded only in the amount that was paid in the price of the goods to your supplier, this opportunity really allows you to save. But if the buyer is provided with goods without VAT on the OSN (for example, a sample invoice without VAT is issued), then he will not be able to reimburse it. Thus, this advantage of working on VAT is important only if the price of a product from a supplier who works with VAT is lower or equal to the price of a similar product from a supplier who works without VAT.

Tax agents

VAT tax agents are required to pay value added tax to the budget and submit a declaration. The duties of a tax agent can also be performed by companies in special regimes.

The tax agent will have to report VAT if he:

purchased goods (services) from foreign companies that are not registered for tax purposes in the Russian Federation;
sells goods (services) of foreign companies that are not registered in Russia under intermediary agreements;
rents or buys state property;
buys property of a bankrupt, etc. (less common cases are described in Article 161 of the Tax Code of the Russian Federation).

Benefits of VAT exemption

The decision on the advisability of using the right to exemption from VAT must be made carefully, after analyzing the advantages and disadvantages.

The decision must be made taking into account the possible consequences for the organization.

If a company is exempt from paying value added tax, it receives the following benefits:

the volume of document flow is reduced,
accounting is significantly simplified due to the absence of the need to maintain separate records,
There is no obligation to prepare a VAT declaration every quarter.
the ability to refuse to maintain a purchase book,
the company is exempt from the obligation to charge VAT on sales and transfer it to the budget
According to an unspoken opinion, tax inspectors inspecting companies exempt from VAT are more loyal to the companies being inspected, which makes it easier to pass various audits.

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Intermediaries are required to keep a log of invoices

Those agents and commission agents who apply special tax regimes and sell goods (services) of a principal registered under the OSN are required to keep a log of invoices received and issued. These journals must be submitted to the tax office electronically. Reporting in this way must be done no later than the 20th day of the month following the reporting quarter.

If a company works under intermediary agreements with a foreign company that is not registered in the Russian Federation, then it is obliged to send a log of received and issued invoices along with a VAT return in electronic form.

To make sure that you have submitted all reports and paid all necessary taxes, use the Kontur.Extern online service to request an official reconciliation report with the tax office, which will reflect all the information about your mutual settlements, submitted declarations and payments credited to the budget.

LLC without VAT

An organization that, upon registration, submitted a notification to the tax authorities that it will apply a special tax regime (STS, UTII, Unified Agricultural Tax), and has met all the conditions for this, is not a VAT payer and does not have to pay this tax (clause 2 , 3 Article 346.11, paragraph 4 Article 346.26, paragraph 3 Article 346.1 of the Tax Code of the Russian Federation).

Accordingly, she:

draws up contracts without VAT, that is, they indicate the price without VAT;
issues invoices for payment without VAT;
draws up acts of work performed without VAT, as well as invoices and acts of services rendered without tax.

Thus, in contracts, primary documents and other documents, amounts without VAT are indicated everywhere.

True, in some cases, special regime officers still face the calculation and payment of VAT to the budget. For example, if you issued a VAT invoice, although you should not have done so, or when performing the duties of a tax agent for VAT.

Can an LLC operate without VAT? In what cases does an LLC not pay VAT? Special procedure for exemption from VAT for Unified Agricultural Tax payers from January 1, 2021 How to confirm the used right to exemption from VAT

Compliance with several conditions will allow your company not to pay VAT and not to submit returns for this tax even without using the simplified tax system. Read our publication about what you need to do to get exemption and at the same time avoid claims from the Federal Tax Service.

Who has the right to work without VAT

VAT-free operation is available to most limited liability companies. This tax is paid under the general taxation system, so immediately after registering an LLC you must switch to a different tax regime.

Such regimes are called preferential because they allow you to pay less taxes to the budget than in the general system. And most importantly, LLCs are allowed to operate without VAT. You can choose from the following tax regimes:

Simplified taxation system Income at a rate of 6% of income received;
USN Income minus expenses, where the difference between income and expenses is taxed at a rate of 5% to 15%;
UTII, on which they pay 15% of the imputed income, calculated according to a special formula;
Unified agricultural tax, developed specifically for agricultural producers who pay only 6% of the difference between income and expenses.

To understand which preferential tax system will be the most profitable option in a particular case, it is necessary to carry out an individual calculation of the tax burden.

But in addition, check whether you comply with the conditions for switching to the preferential system:

timely submission of notification of the choice of regime to the tax office;
compliance with limits on the number of employees (no more than 100 people for the simplified tax system and UTII) and the amount of annual income (no more than 150 million rubles for the simplified tax system);
fulfillment of other mandatory conditions provided for in individual chapters of the Tax Code for each regime.

If, after registration, the limited liability company does not submit an application to switch to a preferential regime, it will become a payer of the general system (OSNO). And on it, as we have already found out, you have to pay VAT at a rate of up to 18%. And not only this, but also income tax, as well as on real estate, if it is registered with the organization.

Those companies that simply did not know about their right to operate at reduced tax rates and therefore did not apply can correct the situation from the new year. To do this, you need to contact your Federal Tax Service at the end of December of this year.

But even if the LLC switched to preferential treatment on time and is not recognized as a VAT payer, you will still have to pay this tax in the following situations:

importation of goods into the territory of the Russian Federation;
issuing an invoice with a specified amount of value added tax (sometimes companies on special regimes do this at the request of counterparties, but it is better not to do this);
obtaining the status of a tax agent for VAT (recipient of services of a foreign company, concessionaire under a concession agreement, trustee, etc.).

The simplifier won the tender: what to do with VAT

Good afternoon, colleagues.

If you participate in tenders, if you work in accordance with the law on the contract system in the field of procurement of goods, works, services to meet state and municipal needs, then this article is for you.

It happens that a company wins tenders not only for the OSN, but also for the simplified tax system. The tender was held with VAT, but this is simplified. In a number of regions, it happened that the customer reduced the amount of payments to the simplifier by the amount of VAT, or the simplifier himself was forced to pay VAT. It happened that the simplifier was also slightly blackmailed, saying that otherwise you wouldn’t get any money at all. It happened differently. And in this part the FAS tried to restore order.

I have in my hands a letter from the Federal Antimonopoly Service dated June 18, 2021 No. IA/50880/19 , signed by Igor Artemyev. And here the following is written on this issue:

“In accordance with the provisions of the Law on the Contract System, the contract is concluded at the price proposed by the winner of the procurement.

When forming its price proposal, the winner of the purchase offers the contract price taking into account all taxes and fees that he is obliged to pay in accordance with the provisions of the Tax Code of the Russian Federation (hereinafter referred to as the Tax Code of the Russian Federation).

A person applying the simplified tax system is not a VAT payer, but at the same time pays tax in accordance with the Tax Code of the Russian Federation, which is calculated depending on the selected object of taxation in accordance with Chapter 26.2 of the Tax Code of the Russian Federation.

At the same time, the Law on the Contract System does not provide for the possibility of the customer adjusting (subtracting) the amount of VAT from the contract price proposed by the winner of the purchase using the simplified tax system.”

So, colleagues, Artemyev says that the law on the contract system does not provide for the possibility of adjustment, that is, the customer deducting value added tax from the contract price. “Thus, due to the absence of provisions in the Law on the Contract System that allow the customer to unilaterally adjust (reduce) the contract price depending on the tax system applied by the winner, the contract is concluded at the price proposed by the winner.” Here is the answer to the first question.

The second question posed in this letter.

“In accordance with the letter of the Ministry of Finance of the Russian Federation (hereinafter referred to as the Ministry of Finance of Russia) dated December 27, 2017 N 24-03-08/87276, when establishing the initial (maximum) price of the contract, the customer must take into account all factors influencing the price: terms and conditions of delivery, risks associated with the possibility of price increases, including tax payments provided for by the Tax Code of the Russian Federation.” And then the conclusion: “Thus, any procurement participant, including those who are exempt from VAT and apply the simplified tax system, has the right to participate in procurement.

Based on the foregoing, taking into account that the winner of the purchase may be a person who is not a VAT payer and applies the simplified tax system, the customer in the draft contract must establish a variable condition on the contract price “including VAT/VAT exempt.” And then the conclusion: “Thus, the indication in the draft contract of a variable condition on the contract price “including VAT/VAT not subject to” is mandatory and does not depend on the will of the customer.” Got the idea? That is, they must indicate this in the contract.

The third question that Artemyev poses is the most difficult. “On the issue of the customer’s refusal to exclude the condition of including VAT in the contract price at the stage of signing a contract with a person applying the simplified tax system, the FAS Russia reports the following.

As follows from the letter of the Federal Tax Service dated November 8, 2016 N SD-4-3/ [email protected] , paragraph 3 of Article 169 of the Tax Code of the Russian Federation establishes that VAT taxpayers are required to prepare invoices when performing transactions recognized as an object of taxation by the specified tax in accordance with Chapter 21 of the Tax Code of the Russian Federation (except for transactions not subject to taxation (exempt from taxation) in accordance with Article 149 of the Tax Code of the Russian Federation).

Okay, we know that. Simplifiers do not create invoices. Go ahead. “In this regard, organizations and individual entrepreneurs using the simplified tax system, when carrying out operations for the sale of goods (works, services), should not prepare and issue invoices to customers.

At the same time, in the event that persons who are not VAT taxpayers, including organizations and individual entrepreneurs who have switched to the simplified tax system, issue an invoice to the buyer of goods (works, services), highlighting the amount of VAT, the entire amount of tax indicated in this invoice , in accordance with paragraph 5 of Article 173 of the Tax Code of the Russian Federation, is subject to payment to the budget.”

Right. If a simpleton wants to issue an invoice indicating VAT, of course, he will have to pay this VAT to the budget. Further Artemyev writes: “Also, as follows from the letter of the Federal Tax Service dated November 8, 2016 N SD-4-3 / [email protected] , if in the state contract for the supply of goods (works, services) their cost is indicated “including VAT" and when the customer pays for these goods (works, services), the amount of VAT is allocated in the payment order; if an invoice is not issued to the seller using the simplified tax system, the obligation to pay VAT to the budget in accordance with the provisions of Chapter 21 of the Tax Code of the Russian Federation does not arise.”

It turns out that after all, the customer included VAT in the contract and he pays the money to the simplifier, and pays him with VAT. But if the seller using the simplified procedure fails to issue an invoice, the obligation to pay VAT to the budget in accordance with the provisions of Chapter 21 of the Tax Code of the Russian Federation does not arise.

Then the confusion ensued. But I will explain it now. “At the same time, FAS Russia draws attention to the fact that in these cases, often at the stage of execution of a state (municipal) contract, customers refuse to sign the goods acceptance certificate if an invoice is not issued with the allocation of the VAT amount, referring to the contract condition that the price includes VAT." So, customers should no longer refuse. Thus, under the threat of unilateral termination of the contract and inclusion in the register of unscrupulous suppliers, contractors, performers, performers using the simplified procedure are forced to issue invoices. That is, they are pressured, they are forced to pay VAT, which actually leads to double taxation and infringement of the rights of such simplifiers.

And at the very end he writes: “Taking into account that any person can be a procurement participant, regardless of the taxation system applied, the customer’s refusal to exclude from the draft contract at the stage of signing the contract the condition on the contract price “including VAT”, if the contract is concluded with a supplier (contractor, performer) using the simplified tax system leads to an infringement of the rights of such a procurement participant, since such a person will be required to pay VAT.” Of course, it will be required to pay VAT! If, on the one hand, they pay him money including VAT, then they don’t sign the contract, they don’t sign any papers until you, like, issue an invoice, then confusion arises.

Low bow to Igor Artemyev. There would be more such officials. In this case, Igor Artemyev, without violating a single letter of the law, on the contrary, does absolutely everything in accordance with the letters of the Ministry of Finance and the Federal Tax Service of Russia, as well as the Tax Code of the Russian Federation. He tells us that the customer, if the contract includes VAT, is obliged to pay the entire amount, without reducing this amount by the amount of VAT. At the same time, the customer does not have the right to force the simplifier to sign documents and pay VAT or issue invoices. The entire amount went along with VAT, the simplifier received it, capitalized it, paid 6%, does not issue an invoice, what are the problems? Everything is fine.

So, guys, the letter is very good, many thanks to Artemyev. At the end there is another conclusion: “Based on the above, FAS Russia reports that when the winner of a procurement applying the simplified tax system sends a protocol of disagreements on the issue of excluding from the draft contract the condition on including VAT in the contract price, with the attachment of documents confirming the fact that such procurement participant uses the simplified tax system , the customer needs to exclude the specified condition and make changes to the draft contract in terms of adding the condition “not subject to VAT” indicating the basis.” But at the same time, based on the entire meaning of this letter, the contract price should not decrease. And this is very, very good. Thanks to Artemyev for this letter. I would recommend you maximum repost, because a huge number of businessmen earn money under government contracts (municipal, regional). And this will help them. And you can speak out for yourself on this matter.

Thanks guys and good luck with your business.

VAT exemption: who can get it and how?