General Audit Department on the issue of recognition for income tax purposes of expenses for the purchase of methodological services

The inclusion of enterprise expenses in the calculation of taxable amounts should be carried out on the basis of economic feasibility. At the same time, not a single legislative act contains a clear concept of justification for expenses. The criterion is evaluative in nature, which gives rise to a number of questions and controversial situations during tax audits. The article will tell you how to avoid economically unjustified expenses and claims from fiscal authorities.

Question: Is the counterparty’s absence of expenses characteristic of its type of activity (including general business expenses) a sign that the taxpayer has received an unjustified tax benefit under VAT (Article 54.1, clauses 1, 2 of Article 171 of the Tax Code of the Russian Federation)? View answer

What expenses are unreasonable?

According to Art. 252 of the Tax Code of the Russian Federation, the following expenses can be included in tax calculations:

• economically justified;
• documented;
• expressed in monetary terms.

The norms of this article are related to the norms of Art. 346.16 of the Tax Code of the Russian Federation, therefore, the criteria apply to both calculations for income tax and simplified tax.

Question: Is it possible to deduct VAT if income tax expenses are economically unjustified (clauses 1, 2, Article 171 of the Tax Code of the Russian Federation)? View answer

In practice, it follows from the above that the Federal Tax Service has the right not to recognize certain expenses as economically justified, despite the absence of strict prohibitions in the legislation on the inclusion of certain types of expenses in calculations:

1. Costs, according to the law, that are not related to the economic activity carried out by the taxpayer.
2. Costs of paying for the services of consultants, auditors, lawyers, advertising agencies without detailing the work performed and the use of this work in business activities.
3. Material costs not provided for by production technology or used in excess of technological standards.

How are economically unjustified expenses made for the purpose of tax evasion identified?

4. Inventory and materials (works, services) purchased at prices above average market prices for similar product items.
5. Inventory materials used in the production of products that are subsequently sold at prices below the cost of inventory materials. The same applies to works and services.
6. Costs that are not associated with the organization's receipt of income or with the intention of receiving it.
7. Expenses incurred outside the scope of activities aimed at generating income, not having the purpose of generating income (reducing losses), and inflated compared to standard indicators are not considered economically justified.

Important! The taxpayer is obliged to structure his document flow in such a way that it is clear from concluded contracts, primary documents, accounting registers, supporting and reference documents which goods, works and services were subsequently included in the tax calculation and for what purpose certain costs were incurred. When checking, the Federal Tax Service will, first of all, pay attention to their connection with business activities.

How to justify cost-effective expenses

The list of expenses that can be accepted for profit tax purposes is open in the Tax Code. On the one hand, this means that the company can take into account almost all costs (except for those expressly specified in Article 270 of the Tax Code of the Russian Federation). It is enough that they are economically justified, documented and produced for activities aimed at generating income (Article 252 of the Tax Code of the Russian Federation). But on the other hand, based on this provision, tax authorities arbitrarily exclude expenses from taxable profit. Moreover, both traditionally controversial costs (for example, on marketing services) and ineffective from their point of view (for example, when there is no profit on the transaction).

Obviously, it is beneficial for the company to take into account as many expenses as possible for profit tax purposes and thereby reduce the tax payable. Therefore, in order to do this without losses, you need to think in advance about confirming the expediency of the expenses.

When expenses are considered economically justified

As arbitration practice shows, the main complaint of tax authorities is the economic unreasonability of expenses. Therefore, if you stock up on arguments confirming that the costs are economically justified and document them correctly, the risk of disputes can be reduced.

The Tax Code understands justified expenses as economically justified expenses, the assessment of which is expressed in monetary form (paragraph 3, paragraph 1, article 252 of the Tax Code of the Russian Federation). However, there is no definition of the economic justification of costs in any current regulatory act, including the Tax Code. This is an evaluation category. Therefore, the evidence in each situation may be different.

Expert commentary

Zoya Ivanova, tax consultant at Energy Consulting:

— Compliance by the taxpayer with the conditions provided for in Article 252 of the Tax Code of the Russian Federation is one of the most controversial issues arising during tax audits. The absence of a definition of “economic justification” established by law and its evaluative nature suggest a subjective approach when determining the justification of expenses for each taxpayer.

At the same time, as arbitration practice confirms, each party must itself prove the reasonableness or unjustification of the costs. Thus, the Federal Arbitration Court of the North-Western District indicated that tax authorities themselves must show the negative consequences of controversial tax expenses for the financial and economic activities of the company when substantiating the position that it is impossible to recognize these expenses for profit tax purposes (resolution dated 02.21.05 No. A56-22455/ 04).

However, the economic justification of the costs and their connection with the generation of income must be proven by the payer himself, since it is he who forms the income tax base. At the same time, he has the right to provide any evidence of the validity (reasonableness, expediency, necessity) of expenses (decrees of the federal arbitration courts of the West Siberian Federal Arbitration Court dated January 12, 2006 No. F04-9464/2005 (18398-A45-15), Northwestern Federal Arbitration Court dated September 22, 2005 No. A13-16254/2004-15 districts).

Official position

Tatyana Severova, leading specialist of the department of profit (income) taxation of organizations of the department of tax and customs tariff policy of the Ministry of Finance of Russia: - It should be borne in mind that the resolution of the arbitration court is not an act of legislation on taxes and fees in the sense of Article 1 of the Tax Code of the Russian Federation. Like all court decisions, the resolution is adopted in connection with the consideration of the specific circumstances of the case and cannot automatically be considered as a methodological basis for the application of tax legislation.

Expert commentary

Vasily Nekrasov, leading specialist of the consulting department of the audit department of ZAO SV-Audit: - One should defend oneself against claims of tax authorities on the basis of paragraph 6 of Article 108 of the Tax Code. It says that a person is considered innocent of committing a tax offense until his guilt is proven in the manner prescribed by federal law. The person held accountable is not required to prove his innocence. The responsibility for proving circumstances indicating a tax offense and the guilt of a person in committing it rests with the tax authorities. Irremovable doubts about the guilt of the person held accountable are interpreted in favor of that person.

Let's consider the most difficult situations in which tax authorities oppose accepting expenses to reduce profits on the basis of their unreasonability. And we will decide what the company needs to do in advance to avoid these situations, and how to defend itself if it comes to a dispute.

"Benefit" does not equal "profit"

One of the situations when tax authorities do not want to recognize expenses is when they receive a loss instead of a profit. For example, when the rent is less than the depreciation on the leased property, when the costs of maintaining the workshop exceed the income from its rental.

The controllers justify their position by the fact that the main goal of the activities of commercial organizations is to make a profit (Article 50 of the Civil Code of the Russian Federation). Therefore, according to tax authorities, expenses within the framework of systematically unprofitable activities are economically unjustified. That is, if the costs of a transaction exceed the income received, they cannot be considered economically feasible and taken into account for profit taxation.

Expert commentary

Elena Popova, State Advisor of the Tax Service of the Russian Federation, 1st rank: - If the financial result of a transaction is a loss, this loss is recognized for tax purposes in the generally established manner. Another thing is that the very fact of receiving a loss can be further assessed from the point of view of the justification of a transaction with a loss. We must not forget that, according to Article 2 of the Civil Code of the Russian Federation, entrepreneurial activity is aimed at systematically obtaining profit from the use of property, the sale of goods, the performance of work, and the provision of services.

However, the Tax Code does not make the economic justification of expenses dependent on the financial results of the company. Therefore, expenses can be recognized even if a loss is incurred.

Cases where companies are forced to sell their products at a loss are not isolated. This is usually due to a decrease in the quality of the product or a drop in demand for it due to the appearance of a new product on the market. In this situation, it is most profitable to discount such products and sell them at a price that may even be lower than its actual cost.

These actions can be justified by the fact that by selling the product at a reduced price, the company will receive an economic benefit. Indeed, in such a situation, she will be able to avoid larger financial losses associated with the inability to sell this product at all. Therefore, timely application of markdowns will partially offset the possible loss. In addition, the company reduces the risk of additional losses due to an increase in inventory in the form of the cost of storing goods and renting warehouses.

To convince tax authorities to recognize such expenses for profit tax purposes, the company must show that it received economic benefits from this business transaction. For example, prepare calculations that, as a result of leasing property, the company received additional monetary resources in the form of rent, without diverting working capital to expenses for this property (depreciation).

In such situations, the courts are on the side of the companies. The courts do not connect economic feasibility with the volume of revenue or profitability of the work and believe that the company has the right to independently determine the existence of economic benefits from a particular business transaction, since economic feasibility does not equal economic efficiency. The latter is a qualitative indicator that characterizes how well the company conducts business activities (decrees of the Volgo-Vyatsky federal arbitration courts dated 03.11.05 No. A82-8102/2004-37, Moscow dated 05.08.05 No. KA-A40/7235-05, Severo -Western dated January 31, 2005 No. A268325/ 04-23 districts). Receiving a loss on a transaction is not grounds for recognizing expenses as economically unjustified (resolution of the Federal Arbitration Court of the Moscow District dated May 6, 2005 No. KA-A40/3465-05).

Expert commentary

Vladimir Andreev, Deputy Director of the Tax and Accounting Consulting Department of PGP LLC: - The Tax Code does not correlate the validity of costs and their connection with activities aimed at generating income. Arbitration practice shows that the economic justification of expenses is determined not by the actual receipt of income in a particular tax (reporting) period, but by the focus of such expenses on generating income. Therefore, when assessing the validity of costs, one should proceed from the extent to which they were aimed at generating income.

Zoya Ivanova, tax consultant at Energy Consulting: — According to Article 41 of the Tax Code of the Russian Federation, income for tax purposes is recognized as economic benefit in cash or in kind. Thus, expenses should be aimed specifically at generating income, and not profit, which is defined as the positive difference between income and expenses. Therefore, even if a loss occurs, the company’s activities will still be aimed at generating income. And the expenses incurred to carry out this activity may be considered justified.

Note that tax authorities can challenge the economic justification of expenses on the grounds that their size significantly exceeds income. Of course, it is worth paying attention to the reasonableness of expenses. But at the same time, the courts point out that irrational expenses can also be economically justified, since the tax authority does not have the right to assess the efficiency of doing business (resolution of the Federal Arbitration Court of the Volga-Vyatka District dated July 28, 2005 No. A28-3008/2005-76/15) .

Expert commentary

Svetlana Gavrilova, leading legal consultant of the consulting department of FinExpertiza LLC: - Arbitration courts note that paragraph 1 of Article 252 of the Tax Code of the Russian Federation does not directly indicate what the ratio of expenses and financial results should be in order to recognize expenses as economically justified. Article 40 of the Tax Code of the Russian Federation can serve as such a criterion when determining the economic justification of costs. The court may oblige the parties to confirm the proportionality of expenses to the market price, for example, for identical services (and in their absence - homogeneous) in comparable economic conditions (Resolution of the Federal Arbitration Court of the Moscow District dated July 7, 2004 No. A05-12199/03-10). At the same time, one of the criteria for assessing the economic justification of expenses is the presence of a real opportunity to obtain the same result at the lowest cost (resolution of the Federal Arbitration Court of the Volga-Vyatka District dated April 27, 2006 No. A29-6475/2005a).

Thus, the economic justification of expenses is not related to their economic efficiency, but may be related to economic feasibility, reasonableness, and necessity. Also, the economic justification of expenses is determined by their focus on generating income, but is not excluded by the receipt of a loss or an excess of expenses over income in a certain tax period. And the criterion of economic justification can be Article 40 of the Tax Code of the Russian Federation.

Expenses not aimed at generating income

The Tax Code does not establish an assessment of the economic efficiency of expenses as a criterion for forming the tax base. Therefore, even if the expenses themselves are not directly aimed at generating income, they can still be taken into account for tax purposes. The main condition is that they must correspond to the activities being carried out.

Thus, the Tax Code does not require that non-operating expenses be necessarily aimed at generating income and material benefits. To take them into account, it is enough that they are related to activities aimed at generating income (resolution of the Federal Arbitration Court of the Central District dated December 5, 2005 No. A48-3757/05-8).

Expert commentary

Elena Popova, State Advisor of the Tax Service of the Russian Federation, 1st rank: - According to Article 252 of the Tax Code of the Russian Federation, the taxpayer reduces the income received by the amount of expenses incurred. Here the code does not highlight what kind of income and what kind of expenses - non-operating or related to production and sales, but gives a general principle.

For example, a company, having received a loan from a bank, at the same time provided interest-free loans to its subsidiaries. At the same time, she reduced taxable profit by the amount of interest on the bank loan. During the audit, tax officials excluded the cost of paying bank interest as economically unfeasible. However, the court concluded that economic feasibility is determined not by the actual receipt of income in a particular tax period, but by the focus of such expenses on generating income. The focus on generating income was expressed in supporting the subsidiaries of this company, which were its suppliers of raw materials (resolution of the Federal Arbitration Court of the North-Western District dated 02/07/05 No. A26-7069/04-212). Let us immediately note that the courts do not classify the activity of using a bank loan as a relationship that must be checked for its economic feasibility (resolution of the Federal Arbitration Court of the Volga-Vyatka District dated January 30, 2006 No. A82-9347/2004-37).

Therefore, in order to justify the inclusion in expenses, for example, of interest for inappropriate use of a loan, you can provide evidence of receiving indirect benefits throughout your entire financial and business activities. The tax authorities themselves emphasize that expenses can be considered economically justified even if they themselves do not bring specific returns, but are generally necessary to ensure activities aimed at generating income (letter of the Ministry of Taxes of Russia dated September 27, 2004 No. 02-5-11/162) .

Official position

Tatyana Severova, leading specialist in the department of taxation of profit (income) of organizations of the department of tax and customs tariff policy of the Ministry of Finance of Russia: - Explanations regarding economically justified expenses were given in the currently ineffective Methodological recommendations for the application of Chapter 25 “Income Tax of Organizations” of Part Two of the Tax Code of the Russian Federation *. In accordance with them, economically justified expenses should be understood as expenses determined by the goals of generating income, satisfying the principle of rationality and determined by business customs. This definition remains relevant today.

Thus, in order to take into account certain expenses for profit tax purposes, the payer must clearly and unambiguously disclose and prove to the tax authority their validity. At the same time, it is recommended to establish the validity of expenses in the internal documents of the organization (orders, instructions, job descriptions, etc.).

Expenses from the “risk group”

Now let's move on to the most popular expenses that tax authorities seek to exclude from the tax base in the first place. Even if a profit is made from a transaction or activity, tax authorities may question the very need for certain expenses. Therefore, when planning them, it is necessary to prepare in advance an evidence base to assess their economic justification.

For example, contracts for the provision of services attract increased attention from tax authorities. Practice shows that controllers, as a rule, question the economic justification of legal, information, consulting, and marketing research services**.

Moreover, if the company has employees with similar functions, the risk that tax authorities will be against accounting for the costs of third-party consultants almost doubles (letter of the Ministry of Finance of Russia dated July 3, 2006 No. 03-03-04/1/555). True, the courts in such situations are mainly on the side of the companies (decrees of the federal arbitration courts of Volga-Vyatka dated 08.08.05 No. A82-11632/2004-37, West Siberian of 18.07.05 No. F04-4616/2005 (13098-A27- 40), dated March 15, 2006 No. F04-1847/2006 (20709-A67-40) districts). Therefore, when concluding a contract for the provision of services, it is desirable that the company does not have structural divisions or employees whose qualifications and functions would make it possible to question the justification of these costs. If this cannot be avoided, it is better to indicate in the contract with the contractor the list of services that are not included in the job responsibilities of a full-time employee.

Expert commentary

Elena Popova, State Advisor of the Tax Service of the Russian Federation of the 1st rank: - Even if there are no similar functions in the job descriptions of employees, in the regulations on structural divisions, such expenses still need to be assessed from the point of view of their rationality for the purposes of the business practices of this type of business, their proportionality with other necessary expenses and, of course, documentary evidence.

“Risk” expenses require impeccable documentary evidence

When deciding whether the costs of work and services are justified, tax authorities pay attention to the documentation of their results. To be able to take them into account as expenses that reduce taxable profit, it is not enough to have only contracts, acts of acceptance and transfer of services performed, and invoices. These documents cannot always confirm the fact of performance of work or provision of services, as well as their connection with production activities (decrees of the Federal Arbitration Courts of the Central Federal Arbitration Court dated 05.19.05 No. A23-2111/04A-5-168, North Caucasus Court dated 02.11.05 No. F08 -5209/05-2065A districts).

The company must also take care of additional documents (for example, certificates, reports, reviews), which contain a detailed breakdown of the services provided, as well as information on how the results obtained are used in income-generating activities. For example, information services for searching and analyzing construction work orders can be supported by a progress report. It may contain a market overview of the industry for a specific period, the financial condition of companies in the region of this industry, a review of investment activities in the region, price lists for commercial real estate, information on the supply of materials (resolution of the Federal Arbitration Court of the East Siberian District dated May 17. 05 No. A19-29167/05-15-F02-2104/05-S1).

Expert commentary

Svetlana Gavrilova, leading legal consultant of the consulting department of FinExpertiza LLC: - The economic feasibility of consulting services will be evidenced by clearly defined contractual obligations, the availability of specific information about the services provided, data on pricing and determining the cost of services, and the actual payment procedure. As well as the number of employees, their professional training, job descriptions, the objective lack of knowledge, information and skills among the customer’s employees to provide the services provided by the contractor.

Information services are recognized as economically justified if the necessary information is collected in relation to the activities in which the payer is directly engaged. Marketing research will be recognized as economically justified if it is carried out in the field of activity in which the company is engaged (or intends to operate), if these services are necessary for further work and promotion of products on the market.

However, the reports should not contain inaccurate or knowingly unreliable information (resolution of the Federal Arbitration Court of the East Siberian District dated 04/06/06 No. A33-9867/05-F02-1356/06-S1). In addition, the volume of services provided and the timing of their implementation must be within reasonable limits. For example, in one of the cases considered by the Federal Arbitration Court of the Moscow District, tax officials were interested in the volume of consultations provided to the company in one quarter—528 hours. With an 8-hour workday for employees, this would be 66 days. Thus, practically all the working time of the taxpayer’s employees was spent on consultations. The court considered such a volume of services unrealistic and supported the tax authorities. In addition, it is against the fact that the service provider was an individual entrepreneur whose education did not correspond to the profile of the services provided (resolution of the Federal Arbitration Court of the Moscow District dated May 12, 2005 No. KA-A40/3867-05).

Expenses under agency agreements* can be considered justified only if the supporting documents show the composition of the services provided by the agents, and their fulfillment of the terms of the agreement is confirmed by documents. For example, the report of an agent under a contract, the subject of which is trade and procurement services, should not only contain the names of suppliers and the amount of supplies under contracts with them. After all, then this report will not contain any indications of the agent’s actions to search for potential suppliers and establish contacts with them. Therefore, the company will not be able to reduce taxable profit by the amount of expenses on agency fees (resolution of the Federal Arbitration Court of the Moscow District dated April 26, 2005 No. KA-A40/3115-05).

Economic justification of costs is an evaluation category, its definition is not found in any regulatory act

The Tax Code does not make the economic justification of costs dependent on the financial performance of the company

*Approved by order of the Ministry of Taxes of Russia dated December 20, 2002 No. BG-3-02/729, lost force on the basis of order of the Federal Tax Service of Russia dated April 21, 2005 No. SAE-3-02/173.

** You can read more about how to confirm marketing expenses in the article “How to convincingly justify marketing research expenses” in PNP No. 2, 2006, p. 61.

The justification of costs is determined not by the actual receipt of profit, but only by the direction of expenses to generate income

* You can read more about how to justify expenses under an agency agreement in the article “How to keep agency fees as expenses” in PNP No. 1, 2006, p. 71.

Expenses under agency agreements can be considered justified only if the supporting documents show the composition of the services provided by the agents

How to identify and minimize unreasonable expenses

Identifying unreasonable expenses of an organization is a priority goal of its management. Timely measures will help not only to avoid problems during tax audits, but also to discover internal reserves that allow you to generate more income and save resources. As a rule, they start with an internal audit, during which a continuous or selective method is used to check whether the costs correspond to:

• production technology, the nature of economic activity in essence;
• standards established by internal documents of the organization or the legislation of the Russian Federation (norms for writing off fuel and lubricants, travel expenses, production costs based on internal calculations of the economic service, etc.);
• criterion of economic feasibility.

Supporting and other documents are checked, reflecting costs, correctness of execution, availability of necessary details (to avoid claims during inspections, etc.).

Before signing an agreement with a counterparty that involves expenses, it is necessary to calculate its economic consequences. Based on the data received, the manager makes a decision whether to consider future costs justified or not. Thus, if the Federal Tax Service refuses to refund a large amount of VAT, then engaging a professional consultant with a fee significantly lower than the disputed amount will be economically justified. At the same time, conducting marketing surveys of potential consumers, if the company does not have problems with selling products, cannot be called justified, since their economic benefits cannot be assessed.

As a rule, it is not possible to completely avoid economically unjustified expenses, even in the part limited by the articles of the Tax Code of the Russian Federation.

Internal limits on such expenses should be established and compliance with them should be monitored:

• travel expenses, travel taking into account the status and categories of employees;
• entertainment expenses, similar to the previous paragraph;
• expenses for gifts for holidays and anniversaries;
• expenses of cultural events.

Property protection services (cost justification)

Almost all arbitration courts have recognized it as legitimate to classify the costs of protecting property in accordance with paragraph 1 of Article 264 of the Tax Code of the Russian Federation as other expenses associated with production and sales, taken into account for tax purposes (Resolution of the Federal Antimonopoly Service of the West Siberian District dated March 22, 2006 No. FO4-2076/ 2006, dated 03/15/2006 No. F04-1086/2006, Resolution of the Federal Antimonopoly Service of the North-Western District dated 01/30/2006 No. A56-28974/2005).

The main argument is the fact that property security services are provided under a regular civil contract for the provision of services for an organization that has entered into an agreement with the private security department, the funds transferred are not earmarked and the provisions of the Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated October 21, 2003 No. 5953/03 , subparagraph 14 of paragraph 1 of Article 251 and paragraph 17 of Article 270 of the Tax Code of the Russian Federation are not applicable.

Summarizing the above, we can conclude that almost any expenses can be recognized for tax purposes if they are properly executed and justified. Of course, the expediency of many expenses will have to be defended in court, but, as practice shows, the prospects for taxpayers are favorable.

Justification of expenses and tax control

When carrying out tax audits, employees of the Federal Tax Service are often guided by the principle that the taxpayer is required to prove the validity of expenses. In doing so, they refer to Art. 64 of the Arbitration Procedural Code of the Russian Federation, provisions of the Tax Code of the Russian Federation, justifying my opinion as follows:

• Based on the norms of the Tax Code, the taxpayer forms the tax base independently;
• Based on the rules of the APC, the taxpayer is not relieved of the obligation to prove his claims with facts that form the basis of the claims.

However, such a position is at least controversial, and essentially incorrect. In the same APC Art. 200-5 directly contains an indication of the obligation of the Federal Tax Service to provide evidence of the unreasonableness of the organization’s expenses.

Important! If there is a suspicion of artificially inflated prices, tax authorities use Art. 40-3 Tax Code of the Russian Federation. The established standard is no more than 20% deviation from market prices for similar items of goods, works, and services. The rate of entertainment expenses is no more than 4% of labor costs during the year (Article 264-2 of the Tax Code of the Russian Federation).

Communication services (cost justification)

The legality of classifying communication services as expenses taken into account for tax purposes is provided for in subparagraph 25, paragraph 1 of Article 264 of the Tax Code of the Russian Federation. However, tax authorities often question the validity of this type of expense, since it is no secret that communication services, including mobile operators, are used for both business and personal purposes.

For example, the need to use cellular communication services by employees of a closed joint stock company is justified by the specifics of the production activities of the taxpayer related to the media, and the need for him to receive and transmit urgent information (Resolution of the Federal Antimonopoly Service of the North Caucasus District dated 01.03.2006 No. F08-504/2006- 240A).

To recognize expenses incurred for payment for cellular communication services as expenses for tax purposes, the Ministry of Finance of Russia adheres to the position set out in letter No. 03-03-01-04/1/275 dated May 23, 2005, according to which the organization must have the following set of documents: approved the head of the organization lists the positions of employees who, due to the duties they perform, need to use cellular communications; employee job description, contract with the operator for the provision of communication services; detailed telecom operator accounts.

In addition to the above, it should be noted that, in the opinion of the Russian Ministry of Finance, in the case of the acquisition of express payment cards for cellular communication services, such expenses cannot be recognized due to the lack of primary documents confirming the expenses incurred (letter of the Russian Ministry of Finance dated January 26, 2006 No. 03 -03-04/1/61). According to the author, these expenses can be taken into account for tax purposes on the basis of documents indirectly confirming the expenses incurred, including if there is an account with a telecom operator, and the amount of VAT can be deducted if there is a cash receipt confirming the fact of purchasing the card.

Reflection of unreasonable expenses in accounting

Let's consider an example: an organization participates in a charity program by transferring contributions in the amount of 175,000.00 rubles. From the point of view of tax legislation, such expenses will be unjustified, since they do not lead to income (Article 270-16.34 of the Tax Code of the Russian Federation). An attempt to include them in the calculation of the tax base in order to reduce it may lead to the application of penalties against the organization.

In accounting, charitable contributions are reflected in account 91:

• Dt 91/2 Kt 76 - 175,000.00 rub. — reflects the amount of the charitable contribution.
• Dt 76 Kt - 51.50 - 175000.00 rub. — a charitable contribution is transferred.
• Dt 99/PNO Kt 68/Income tax - RUB 35,000.00. — a permanent tax liability is reflected (175,000.00*20%= 35,000.00).

Important! If an organization has incurred a loss as a result of its activities, this cannot serve as a basis for recognizing expenses as economically unjustified. Article 252 of the Tax Code of the Russian Federation does not justify costs based on the results of the activities of an economic entity. Likewise, costs aimed at reducing losses are justified (see letter of the Ministry of Finance No. 03-03-04/4/69 dated 10/27/05).

The determining factor is the focus on generating income, and not the result of economic activity during the period of expenditure.

Main

1. The justification of expenses is determined by the organization.
2. The expenses incurred must be primarily aimed at generating profit within the scope of the type of activity declared by the organization.
3. Costs that do not meet this requirement, as well as those incurred in excess of the norms established by law, are economically unjustified. They cannot be included in tax calculations and reduce the tax base.
4. Control of unreasonable expenses and expenses that may be recognized by the Federal Tax Service as unreasonable is carried out by the management of the organization.
5. During a tax audit, the burden of proof of the unreasonableness of the taxpayer's expenses rests with the fiscal authorities.

The concept of unjustified profit tax

With regard to income tax, a tax benefit is considered unjustified if the amount of expenses presented in the calculation is formed inappropriately, in direct, indirect or unintentional violation of the legislation of the Russian Federation on taxes and fees.

Specific signs of the unfoundedness of a tax benefit can be established from an analysis of Chapter 25 of the Tax Code of the Russian Federation (regarding the procedure for determining the composition of expenses), as well as from materials summarizing judicial practice related to the consideration of tax disputes.

Resolution of the Plenum of the Supreme Arbitration Court No. 53 provides a list of the main situations when a benefit under this tax legal relationship may be considered unjustified:

• if, when calculating tax, expenses take into account transactions performed not in accordance with their real economic meaning, or not determined by business goals;
• if the tax authorities prove that the payer acted without due diligence or caution and should have reliably known about violations of tax obligations committed by his counterparty and which served as the basis for the tax benefit;
• The activities of the inspected enterprise are aimed at taking actions that contribute to obtaining benefits, mainly with counterparties who do not fulfill tax obligations.

These signs are of a general nature and must be proven by the tax authority in the event that the taxpayer is held accountable. Tax legal relations are built on the principles of good faith of the payer, therefore the responsibility for proving the fact of incompleteness, unreliability and contradiction of the information presented rests with the tax authority.

Establishing the unreasonableness of expenses declared when calculating income tax is carried out during the verification of the submitted supporting documents. The subject of such an audit, during which the tax authority has the right to request information from the counterparties of the inspected enterprise, may be the relationship of the taxpayer with its counterparties.

You can learn more about the powers of tax inspectors during audits in the “Tax audit” section.

The exhaustive list of requested documents is not limited by law; the request is made on the basis of a written request. Based on the counter-inspection, discrepancies may be established in the documents that were presented in support of the expenses incurred.

In case of identified discrepancies, the tax authority establishes a violation of the law in the form of non-payment or incomplete payment of income tax amounts. The result of a tax audit may be an additional charge of income tax and holding the taxpayer accountable.