First, let’s find out what is generally considered advertising. This way we will understand which expenses can be classified in this category and which cannot.
The law says that advertising is information that you distribute in any way to an unknown number of people.
If you send out a product catalog to your customers, this is not advertising. After all, you know in advance who you are sending it to. Another situation: you post the same catalog in the store, and anyone can take it - this is already advertising.
The purpose of advertising is to attract and maintain interest in a product, company or event.
A sign on the facade with the name of a company is not advertising, because it does not contain advertising information and does not promote a product or seller. And if a poster on the facade of a cafe declares that here you can try the most delicious buns in the city - this is advertising.
If you doubt what can be classified as advertising, see the law on advertising.
Once you have determined whether the expense is advertising, you need to understand how much it can be taken into account.
Concept and types of advertising expenses
The main task of advertising is to attract and maintain the attention of potential buyers to goods, works and services.
However, in order for the expenses incurred to be called advertising, they must satisfy the conditions of paragraph 1 of Art. 3 of the Law “On Advertising” dated March 13, 2006 No. 38-FZ, namely: to attract and maintain attention to the object of advertising among an indefinite circle of people in order to promote it in the market. According to para. 2 p. 2 art. 346.16 of the Tax Code of the Russian Federation, simplifications take into account advertising expenses in the same manner as income tax payers (according to the rules of Article 264 of the Tax Code of the Russian Federation). And in paragraph 4 of Art. 264 of the Tax Code of the Russian Federation provides that advertising costs are classified as non-standardized and standardized (clause 4 of Article 264 of the Tax Code of the Russian Federation).
Note! Advertising costs can only be taken into account by single tax payers with the object of taxation “income minus expenses” (clause 20, clause 1, article 346.16 of the Tax Code of the Russian Federation, letter of the Ministry of Finance of Russia dated April 20, 2010 No. 03-11-06/2/63).
Non-standardized expenses are fully taken into account for single tax purposes. Normalized items are taken into account in an amount not exceeding 1% of sales revenue, calculated in accordance with Art. 249 of the Tax Code of the Russian Federation.
Outdoor advertising
Payers of the simplified tax system have many questions regarding the costs of outdoor advertising.
The costs of paying for the services of third-party organizations for obtaining permits for outdoor advertising media (payment for registration of outdoor advertising media, registration of a passport for outdoor advertising media, approval, the right to place outdoor advertising media and approval for advertising placement) are not provided for in paragraph 1 of Art. 346.16 Tax Code of the Russian Federation.
Consequently, these expenses do not reduce the tax base for the “simplified” tax.
At the same time, the company has the right to take into account the costs of the acquisition, construction and production of fixed assets or the costs of advertising the goods (works, services) produced (purchased) and (or) sold.
When classifying a billboard as a fixed asset, the following should be kept in mind. Fixed assets include objects that meet the following conditions:
- are used in the production of products, when performing work or providing services, for the management needs of the organization or for provision by the organization for a fee for temporary possession and use or for temporary use;
- are used for a long time, that is, a period lasting more than 12 months or the normal operating cycle if it exceeds 12 months;
- not intended for subsequent resale;
- capable of bringing economic benefits (income) to the organization.
In this case, fixed assets acquired during the period of application of the simplified tax system are taken into account from the moment they are put into operation.
If the billboard does not meet the specified criteria, the costs of its production can be attributed to the costs of advertising manufactured (purchased) and (or) sold goods (works, services).
The Tax Code of the Russian Federation stipulates that advertising expenses include, in particular, expenses for illuminated and other outdoor advertising, including the production of advertising stands and billboards.
For issuing such a permit, a state fee of 3,000 rubles is charged. (Clause 105, Clause 1, Article 333.33 of the Tax Code of the Russian Federation).
According to the Russian Ministry of Finance, fees for the distribution of outdoor advertising can be taken into account for tax purposes (Letter of the Russian Ministry of Finance dated September 6, 2005 N 03-11-04/2/64).
If a “simplified” company decides to place advertising structures on other people’s premises, then difficulties may arise with the taxation of fees for such a right. According to tax authorities, expenses for the right to place outdoor advertising do not apply to advertising expenses provided for in clause 4 of Art. 264 Tax Code of the Russian Federation.
Thus, organizations using the simplified tax system do not have the right to reduce, when calculating the tax base, the amount of income received for expenses for the right to place outdoor advertising (Letter of the Federal Tax Service of Russia for Moscow dated July 27, 2006 N 18-11/3/).
Non-standard advertising expenses
Non-standardized expenses include:
- advertising expenses for events through the media and telecommunications networks, as well as for video and film services (including advertisements in print media, broadcast on radio and television);
- expenses for outdoor advertising, advertising stands, billboards, including illuminated advertising;
- expenses for participation in exhibitions, expositions and fairs, window dressing, sales exhibitions, image rooms, showrooms, production of advertising brochures, catalogs for products and services, including exhibited products, markdowns of goods, products that have lost their original qualities, commodity sign and service mark, and information about the company itself.
The list of non-standardized advertising expenses is closed.
Example
In the 4th quarter, Hermes LLC incurred expenses for the production of a leaflet in the amount of 8,000 rubles. The production of leaflets, like other printed advertising products, is considered a non-standardized expense (letter of the Ministry of Finance of Russia dated March 16, 2011 No. 03-03-06/1/142). Expenses will be fully taken into account when calculating the single tax on the basis of clause 4 of Art. 264 of the Tax Code of the Russian Federation as non-standardized advertising expenses.
Confirm your consumption
It is necessary to carefully store documents containing information about money paid for advertising. The tax authorities may require proof of expenses. If the company fails to do this, the tax will be assessed additionally. A fine will also be imposed. If the funds for advertising are significant, then the documents must be prepared especially carefully.
For each operation a set must be generated:
- Contract. It indicates the type of advertising being purchased. Details. This document is optional, but the information in it will clearly indicate which advertising you have paid for.
- Certificate of completion of work, which confirms the fact of completion of work. List the services provided in detail. If the contractor fails to submit a report, save email correspondence, especially those letters that contain confirmation. It is better to print it out and notarize it.
- Proof of payment: cash receipt and bank statement.
Standardized advertising expenses
Standardized advertising expenses include:
- expenses for the purchase of prizes for drawings during mass advertising campaigns;
- other expenses not related to non-standardized advertising expenses.
Other expenses may include any advertising expenses not specified in clause 4 of Art. 264 Tax Code of the Russian Federation. At the same time, they will be taken into account as part of the normalized advertising costs in an amount not exceeding 1% of revenue calculated in the manner provided for in Art. 249 of the Tax Code of the Russian Federation.
Example
Expenses for carrying out a promotional campaign for tasting advertising products are included in the normalized advertising expenses, classifying them as other advertising expenses (clause 4 of Article 264 of the Tax Code of the Russian Federation, letter of the Ministry of Finance of Russia dated August 16, 2005 No. 03-04-11/205).
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Rules for recording advertising expenses under the simplified tax system
The procedure for accounting for advertising expenses for organizations on the OSN and the simplified tax system is the same (paragraph 2, paragraph 2, article 346.16, article 264 of the Tax Code of the Russian Federation). However, with one amendment: advertising expenses under the simplified tax system are recognized after their actual payment (clause 2 of article 346.17 of the Tax Code of the Russian Federation).
Advertising expenses for accounting purposes are recognized as expenses for ordinary activities as commercial expenses (clauses 5, 7 of the Accounting Regulations “Expenses of Organizations” PBU 10/99).
Advertising costs are reflected as part of sales expenses in the debit of account 44 (instructions for using the Chart of Accounts for accounting financial and economic activities of organizations, approved by Order of the Ministry of Finance of Russia dated October 31, 2000 No. 94n).
For accounting purposes, there is no need to normalize advertising costs. They can be fully included in the costs of the reporting period in which they were incurred, if this is fixed by the accounting policy (clause 9, clause 20 of PBU 10/99).
Calculation of the maximum amount of standardized advertising expenses
As mentioned, standardized advertising expenses can be included in costs in the amount of no more than 1% of sales revenue calculated according to Art. 249 of the Tax Code of the Russian Federation (subparagraph 20, paragraph 1, article 346.16, paragraph 5, paragraph 4, article 264 of the Tax Code of the Russian Federation).
IMPORTANT! When calculating the standard within which certain types of advertising expenses can be taken into account, taxpayers using the simplified tax system take into account the proceeds received from sales (clause 1 of Article 346.17 of the Tax Code of the Russian Federation) and the amount of advances received from buyers (letter of the Ministry of Finance of Russia dated 11.02) as part of income .2015 No. 03-11-06/2/5832).
Example
Vyuga LLC placed advertising posters in public transport in the 1st quarter. The cost of the service was 32,200 rubles. The company's sales revenue for the 1st quarter is 578,000 rubles.
Let's calculate the maximum amount of standardized advertising costs:
578,000 × 1% = 5,780 rub.
Consequently, normalized advertising expenses in the amount of 5,780 rubles can be included in the actually incurred expenses based on the results of the 1st quarter.
Thus, only a small part of the expenses incurred was included in expenses for tax purposes under the simplified tax system. The tax base under the simplified tax system is formed on an accrual basis from the beginning of the year (clause 5 of article 346.18 of the Tax Code of the Russian Federation). Consequently, with an increase in the volume of accumulated revenue, the size of the maximum amount of normalized advertising expenses to be included in the costs of the “simplified” tax will also increase.
During the reporting period, you can gradually include excess advertising expenses in the organization’s expenses for tax accounting. The remaining expenses cannot be carried over to the next year.
Example
Aphrodite LLC conducted an advertising campaign in the 1st quarter of 2021 to attract new clients through free cosmetic procedures. Information about the promotion was posted on the Internet, the cost of placement was 9,870 rubles. The cost of free cosmetic procedures was 86,400 rubles. Amounts are shown excluding VAT. There were no other advertising expenses in the current period. Expenses for advertising on the Internet are included in the expenses for holding an event through telecommunication networks, since the Internet is recognized as a public telecommunications network (letter of the Ministry of Finance of Russia dated 04/05/2010 No. 03-11-06/2/48, dated 07/15/2009 No. 03-11 -09/248, dated January 29, 2007 No. 03-03-06/1/41). Consequently, such expenses are not standardized and are recognized in full in the 1st quarter of 2020 (clause 4 of article 264 of the Tax Code of the Russian Federation).
Standardized expenses include expenses for free cosmetic procedures (clause 4 of Article 264 of the Tax Code of the Russian Federation). Consequently, the amount of expenses accepted for tax accounting should not exceed 1% of revenue.
- Calculation for the 1st quarter of 2021:
Volume of proceeds received from sales: RUB 427,580.
Limit value of standardized expenses: 427,500 × 1% = 4,275 rubles.
Amount of recognized standardized expenses: RUB 4,275.
Amount of recognized non-standardized expenses: RUB 9,780.
The amount of the carryover balance of normalized advertising expenses: 86,400 – 4,275 = 82,125 rubles.
- Calculation for the first half of 2021:
Volume of proceeds received from sales: RUB 947,300.
Limit value of standardized expenses: 947,300 × 1% = 9,473 rubles.
The amount of recognized standardized advertising expenses: RUB 9,473.
The amount of the carryover balance of normalized advertising expenses: 86,400 – 9,473 = 76,927 rubles.
- Calculation for 9 months of 2021:
Volume of proceeds received from sales: RUB 1,458,700.
Limit value of standardized expenses: 1,458,700 × 1% = 14,587 rubles.
The amount of recognized standardized advertising expenses: RUB 14,587.
The amount of the carryover balance of normalized advertising expenses is 86,400 – 14,587 = 71,813 rubles.
- Calculation for 2021:
Volume of proceeds received from sales: RUB 2,248,500.
Limit value of standardized expenses: 2,248,500 × 1% = 22,485 rubles.
The amount of recognized standardized advertising expenses: RUB 22,485.
Remaining normalized advertising expenses: 86,400 – 22,485 = 63,915 rubles.
Aphrodite LLC will be able to take into account expenses for tax purposes under the simplified tax system for 2021 22,485 rubles. expenses for free cosmetic procedures and 9,870 rubles. expenses for holding an event via the Internet. The amount of advertising expenses is 63,915 rubles. will remain not included in expenses, and it cannot be transferred to the next tax period.
In the book of accounting for income and expenses, advertising costs are reflected in column 5 “Expenses taken into account when calculating the tax base”, section I “Income and expenses”.
For information on the procedure for filling out the book of income and expenses, read the article “The procedure for filling out the KUDiR under the simplified tax system “income minus expenses”.”
The following entries will be made in accounting:
- Dt 44 Kt 10 - cosmetics were written off for advertising procedures.
- Dt 44 Kt 70 - wages were accrued to employees for carrying out advertising procedures. Document - payroll.
- Dt 44 Kt 60 - reflects the cost of the service for placing a promotion on the Internet. Document-basis: act of acceptance and delivery of services provided.
- Dt 90.2 Kt 44 - the cost of the advertising campaign has been written off. Document: accounting statement-calculation.
Advertising costs under the simplified tax system
Consultingyg.ru. September 08, 2021. Category: simplified tax system.
Entrepreneurs using the simplified tax system (income minus expenses) have the right to reduce their income for advertising expenses (just like income tax payers)
subp. 20 clause 1 art. 346.16 of the Tax Code of the Russian Federation, composition of advertising expenses, art. 264 Tax Code of the Russian Federation.
What expenses are classified as advertising?
Thus, advertising is: information distributed in any form, by any means, about an individual or legal entity, type of activity, goods, ideas and undertakings, which is intended for an indefinite number of persons. The specified information should be aimed at attracting attention to the object of advertising, generating or maintaining interest in it and promoting it on the market.
Documents confirming advertising expenses:
- contract;
- act on the provision of advertising services;
- invoice for the purchase of advertising products;
- payment orders, payment receipts;
- samples of advertising products;
and
- protocol for agreeing prices for advertising services;
- certificate of the right to place outdoor advertising;
- advertising space passport;
- approved design project;
- act on write-off of goods (finished products);
- act of markdown of goods.
If the advertisement is one-time, then you can take it into account in the costs immediately after receiving supporting documents and payment.
If advertising is placed, for example, in a magazine over a long period, the question arises when to write off these expenses in full at a time or in equal shares throughout the year.
In this case, everything depends on the terms of payment and closing of documents specified in the contract.
If certificates of completed work are closed monthly, then expenses must be attributed to the current month, but if one certificate is issued for the provision of services over a long period, then such costs are included after payment and signing of the certificate.
Advertising expenses can be standardized or non-standardized.
Standardized - expenses that can be taken into account in an amount not exceeding 1% of the amount of income from sales. Non-standardized - expenses that are taken into account without restrictions. The list of non-standardized expenses is closed and is listed in clause 4 of Article 264 of the Tax Code of the Russian Federation.
— expenses for the discounting of goods that have completely or partially lost their original qualities during exhibition.
All other expenses not listed in paragraph 4 of Article 264 are standardized. Standardized expenses, as specified by the Tax Code of the Russian Federation, also include expenses for issuing prizes during advertising campaigns. Calculation of the reflection of normalized expenses:
The amount of income from sales is multiplied by 1%. This indicator is entered into the book of income and expenses, and the remaining portion can be transferred to the next reporting period within one tax period (calendar year).
For example: The cost of prizes for a promotional campaign excluding VAT was 80,000 rubles. VAT amounted to 14,400 rubles. Revenue at the moment (for example, the 2nd quarter) amounted to 4,500,000 rubles. Let's calculate the amount of expenses by which the tax base can be reduced: - income 4,500,000 rubles. multiply by 1%, we get 45,000 rubles - the cost of prizes is 80,000 rubles.
this is more than 1%, so only 45,000 rubles can be taken into account in expenses; the remaining part (35,000 rubles) can be transferred to the third quarter if income for the third quarter is greater than or equal to 3,500,000 rubles - input VAT is taken into account as follows by calculation. 45,000 * 18% = 8100 rub.
We indicate this amount in column 5 of the Book of Income and Expenses, and transfer the remaining amount of 6300 (14,400 – 8,100 = 6300) to the third quarter.
— The calculation of the amount of standardized expenses must be prepared in the form of an accounting certificate.
Note: Many businesses use the Internet to promote their products. In this case, the costs of website promotion are advertising costs. (i.e. promotion of information through telecommunication networks).
This type of expense is not standardized and is taken into account in full.
Consequently, by concluding an agreement with an organization that provides website promotion services, you can reduce your taxable income by the entire amount of promotional expenses incurred.
Results
Only single tax payers with the object of taxation “income and expenses” can recognize advertising expenses when calculating the single tax. Non-standardized expenses can be taken into account when calculating the single tax in the full amount of paid advertising costs, and normalized expenses can be taken into account only within 1% of the revenue received and advances received in the reporting period.
About the nuances of reflecting expenses and the requirements for expenses, read the article “Accounting for expenses under the simplified tax system with the object “income minus expenses” " .
Sources:
- Tax Code of the Russian Federation
- Law “On Advertising” dated March 13, 2006 No. 38-FZ
- PBU 10/99, approved. by order of the Ministry of Finance of Russia dated May 6, 1999 N 33n
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