Exemption from VAT under the Unified Agricultural Tax in 2021

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Published: 04/22/2019

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The high-profile 2021 amendment to the Tax Code - an increase in the VAT rate - affected not only the size of the standard duty.

VAT for agricultural enterprises
Right to exemption from paying VAT
Nuances of working with taxes during the “transition” period
Filing a declaration

The updated rules expand the categories of taxpayers who are required to pay value added tax. The list included companies and individual entrepreneurs on the Unified Agricultural Tax. The main change for agricultural enterprises is the need to pay VAT from January 2019.

VAT for agricultural enterprises

According to the new rules, the single agricultural tax no longer exempts enterprises from VAT deductions (clause 3, clause 3, article 346.1 of the Tax Code of the Russian Federation). All previously provided grounds for receiving benefits under this fee are canceled, and from January 1, 2021, all Unified Agricultural Tax agents pay a value added duty according to the general rules - in the amount of 20% (clause 3 of article 164 of the Tax Code of the Russian Federation, clause 12 of article 9 No. 335-FZ dated November 27, 2017).

Previously, agricultural enterprises and individual entrepreneurs had the opportunity to include all funds received with VAT as expenses. Now they have 2 options to choose from (depending on the situation):

deduct tax;
add it to the product price.

The obligation to deduct VAT entails other requirements:

issue invoices;
regularly submit VAT reports to the tax authorities;
maintain appropriate documentation : books of purchases and sales, etc. (clause 3 of article 169, clause 5 of article 174 of the Tax Code of the Russian Federation).

The procedure for exemption from VAT when switching to the Unified Agricultural Tax in 2021

The application of the Unified Agricultural Tax regime until 2021 was associated with the mandatory exemption of agricultural tax payers from paying value added tax. However, as of January 1, 2019, clause 12 of Art. 9 of the Law “On Amendments...” dated November 27, 2017 No. 335-FZ, repealing the effect of paragraphs in paragraph 3 of Art. 346.1 of the Tax Code of the Russian Federation, dedicated to the provisions on the non-application of VAT under the Unified Agricultural Tax. As a result of this, agricultural tax payers are required to pay VAT from 2021.

However, at the same time, changes introduced by the same law No. 335-FZ (clause 1, article 2) to art. 145 of the Tax Code of the Russian Federation, which previously provided an opportunity to be exempt from VAT payments for persons working at OSNO with small sales volumes (up to 2 million rubles without taking into account tax in this volume for three consecutive months). Now, agricultural tax payers have been added to the number of persons entitled to exemption, but taking into account the specifics of applying the exemption procedure.

When is it possible, in addition to such taxes as those accrued on profit and property, under the Unified Agricultural Tax, not to pay VAT in 2021? Conditions under which waiver of VAT on the Unified Agricultural Tax becomes possible arise (clause 1 of Article 145 of the Tax Code of the Russian Federation):

If the intention not to pay VAT is expressed in the calendar year corresponding to the year the agricultural activity began.
Income from agricultural activities (excluding tax) received in the year preceding the year of refusal to apply VAT does not exceed the following value: in 2018 - 100 million rubles;
in 2019 - 90 million rubles;
in 2020 - 80 million rubles;
in 2021 - 70 million rubles;
in 2022 and subsequent years - 60 million rubles.

That is, those who at the beginning of 2021 were already carrying out business activities in the field of agriculture can be exempt from VAT if the income of the agricultural enterprise received in 2021 did not exceed 100 million rubles. excluding VAT.

Persons selling excisable goods cannot use the right to exemption (clause 2 of article 145 of the Tax Code of the Russian Federation). The exemption itself does not apply to import VAT (clause 3 of Article 145 of the Tax Code of the Russian Federation).

Right to exemption from paying VAT

Despite the innovations, agricultural companies retained the opportunity to be exempt from VAT (clause 2, clause 1, article 145 of the Tax Code of the Russian Federation). A special procedure is provided for the procedure; it differs from the classical requirements for tax exemption (No. 335-FZ).

Enterprises and individual entrepreneurs on the Unified Agricultural Tax must fulfill the following conditions:

apply for tax exemption in the year of transition to the special regime;
revenue from agricultural activities for the previous 2021 should not exceed 100 million rubles.

For subsequent tax periods, different profit values are established, giving the right to VAT exemption. They decrease every year by 10 million for 5 years. Thus:

in 2021, revenue should be no more than 90 million rubles;
2020 - no higher than 80;
2021 - no more than 70;
2022 and subsequent – no more than 60 million.

To be exempt from paying the duty, you must:

submit a written application to the Federal Tax Service Inspectorate;
comply with the filing deadline - no later than the 20th day of the month following the emergence of the right to the benefit;
annually confirm the acquired right.

If the benefit is planned to be extended, a corresponding notification is sent to the Federal Tax Service for exemption from the fee for the next 12 months, attaching documents confirming all income received for the reporting year. This must be done no later than the 20th day of the month following the expiration of one calendar year from the date of receipt of the benefit.

The duty exemption is issued for 12 months. During this period, the company cannot remove its beneficiary status.

The law does not allow voluntary renunciation of benefits (clause 4 of Article 145 of the Tax Code of the Russian Federation). The right to it can only be lost. This requires that during one tax period under the Unified Agricultural Tax regime:

the amount of profit received from agricultural activities exceeded the amount of income for the year in which the taxpayer exercised the right to deduction (means the amount excluding VAT);
the company or individual entrepreneur sold excisable goods during the year.

If the rules for receiving benefits are violated, the right to it is lost from the 1st day of the month in which the failure to fulfill the conditions was recorded. The amount of the duty calculated for the month in which the violation occurred must be restored and paid to the state treasury in the prescribed manner (paragraph 3, paragraph 5, article 145 as amended by Law No. 335-FZ).

You can only receive the benefit once. After its loss, the company has no right to claim a second exemption from fiscal fees.

What are the categories? How do I know if I qualify for at least one of them?

The first category includes persons who applied the general taxation regime and decided to switch to paying the Unified Agricultural Tax from the beginning of the new tax period. To take advantage of the right to exemption, they must submit a notification of its use in the same calendar year in which they switched to a single agricultural tax.

The second category is those who applied the Unified Agricultural Tax before the new amendments came into force. They may qualify for an exemption if they meet revenue limits. In 2021, the maximum revenue will be considered income of 100 million rubles received in 2018. Over the next years, each year this figure will drop by 10 million per year until it reaches 60 million. So, for example, in order to be exempt from VAT in 2021, the amount of revenue in 2021 will not have to exceed 90 million.

Nuances of working with taxes during the “transition” period

With the advent of the obligation to pay VAT, enterprises and individual entrepreneurs on the Unified Agricultural Tax have the right to accept the received tax as a deduction (if goods, works, services are used in transactions subject to VAT).

If an agricultural enterprise has entered into a cooperation agreement with a partner until 2021, then it may find itself in a “transitional” situation. If work under the contract began in 2021, then the VAT received on the transaction will not be taken into account in expenses. The peculiarity is that it will not be possible to deduct this amount by law, since its accrual refers to the period when agricultural enterprises were not VAT tax agents.

This scenario is provided for by Law No. 335-FZ. In accordance with it: any amounts of VAT incurred during the acquisition of goods (services) or paid when importing objects into Russia that were not classified as expenses (that is, before the obligation to pay the tax arose) are taken into account in the price of the goods (clause 4 of Art. 8 of Law No. 335-FZ).

In practice, for an enterprise this means that value added duty is considered for objects (goods, works, services) that are not subject to taxation.

A similar clarification was provided by the Ministry of Finance of the Russian Federation: for all goods and services received under a contract before January 1, 2019, VAT is not deductible, but is included in the price of the object (Letter of the Ministry of Finance of the Russian Federation dated 02/07/2018 No. 03-07-11/7258).

VAT increase in 2021: more specifics

Since the transition of VAT from 18 to 20 percent is being accomplished in record time, there will be virtually no period of adaptation to the new order. In order for entrepreneurs to quickly adapt to the new format of work, the Ministry of Finance issued a number of explanatory and clarifying documents.

The main message of the directives is this - in 2021, VAT increases to 20% of the value - while the date of signing any civil contract relating to the purchase and sale, shipment, delivery of goods, prepayment, planned work or provision of services is not significant. The determining factor in the context of confusion regarding the application of the “old” or “new” rate is the date of actual fulfillment of the obligation - actual shipment or delivery, start of work, etc.

You may be interested in: VAT increase from January 1, 2021

Enterprises on the Unified Agricultural Tax now become VAT payers

From January 1, 2021, payers of the Unified Agricultural Tax (Unified Agricultural Tax) are recognized as VAT payers . The basis is the amendments made to the Tax Code of the Russian Federation by Law dated November 27, 2017 No. 335-FZ. The Unified Agricultural Tax is used by the vast majority of agricultural producers.

The advantage of the Unified Agricultural Tax is that it acts as a replacement for other taxes, for example:

corporate income tax
personal income tax
property tax regarding property used in production
VAT

Another advantage is simplified accounting. However, the use of unified agricultural tax also poses some problems. In particular, counterparties - VAT payers when working with Unified Agricultural Tax payers are deprived of the opportunity to claim VAT amounts for deduction, since the latter, not being payers, did not issue invoices and did not calculate value added tax.

Starting from January 1, 2021, all UAT payers will also become VAT payers and will be required to:

prepare and submit VAT returns to the tax authorities
issue invoices
keep records of received invoices
maintain purchase books and sales books

Simultaneously with the recognition of agricultural producers as VAT payers, the opportunity arose to remain on the Unified Agricultural Tax. This possibility is enshrined in Article 145 of the Tax Code of the Russian Federation .

To do this, the following conditions must be met:

the taxpayer switches to paying the Unified Agricultural Tax and exercises the right to be exempt from calculating and paying VAT in the same calendar year;
provided that during the previous tax period under the Unified Agricultural Tax, the amount of income received from the sale of goods (work, services), excluding tax, did not exceed in aggregate: 100 million rubles for 2018, 90 million rubles for 2021, 80 million rubles for 2020 year, 70 million rubles for 2021, 60 million rubles for 2022 and subsequent years.

Exemption from the taxpayer's obligations related to the calculation and payment of VAT is subject to a notification procedure.

To be exempt from the calculation and payment of VAT, payers using the Unified Agricultural Tax must submit a written notice of exemption from VAT to the tax authority at the place of registration no later than the 20th day of the month from which the right to exemption is used (clause 3 of Article 145 of the Tax Code RF). Taxpayers of the Unified Agricultural Tax, who have sent a notification to the tax authority about the use of the right to an exemption, cannot refuse this exemption until the expiration of 12 consecutive calendar months (clause 4 of Article 145 of the Tax Code of the Russian Federation).

After 12 calendar months, taxpayers who have used the right to exemption are required to submit to the tax authority a notification about the extension of the use of the right to exemption over the next 12 calendar months or about refusal to use this right.

Taxpayers of the unified agricultural tax may lose the right to exemption from the calculation and payment of VAT if:

the income limit for the corresponding calendar year has been exceeded;
if the taxpayer sold excisable goods.

If these conditions are not met, the right to exemption is lost starting from the 1st day of the month in which the specified excess amount of revenue occurred or the sale of excisable goods was carried out. By violating these norms, agricultural producers will not be able to re-exercise their right to VAT exemption. All payers of the Unified Agricultural Tax, whose share of income from the sale of goods, works and services, taken into account for the special tax regime for 2018, will be less than 100 million rubles, if they decide to remain on the Unified Agricultural Tax without paying VAT, can claim the right to an exemption as early as January 1, 2019 year, submitting a notification to the tax authority at the place of registration no later than January 20, 2021. Otherwise, they automatically become a VAT payer.