Income tax is mandatory for all legal entities that are on the general taxation system. It is calculated by summing the profits from all activities of the company and multiplying them by the current rate.
Legal basis
The procedure for calculating and paying corporate income tax, the tax rate for enterprises of all forms of ownership are indicated in chap. 25 of the Tax Code. Regional acts regulate the process of applying tax benefits. Lawyers and accountants in their work also apply the explanations of the Ministry of Finance and the Federal Tax Service in relation to certain points of regulatory acts.
Subjects and objects
Tax payers are:
- Russian organizations involved in the gambling business, as well as those that do not use the simplified tax system, UTII, and UUSH.
- Foreign organizations that receive income in the territory of the Russian Federation.
- Members of the consolidated group.
Exempted from taxation are enterprises that pay UTII, USN, USHN. If the volume of their annual sales exceeds legislative restrictions, then enterprises must pay corporate income tax, the rate of which exceeds legislative restrictions. Also, exceptions in 2017 include organizations that prepare and conduct 2018 FIFA in the Russian Federation.
The basis for the calculation is the profit of the organization. In Art. 247 of the Tax Code says that profit:
- for domestic organizations and representative offices of foreign companies - this is the amount of income received by the enterprise (its representative office), reduced by the costs incurred;
- the amount of total profit calculated for this participant;
- for other foreign organizations - this is the amount of funds recognized as income under Art. 309 Tax Code.
Income and expenses
Income is recognized as the economic benefit of the organization, expressed in kind or in cash. This is the sum of all the organization’s revenues excluding costs and taxes that are presented to customers (for example, VAT). They are determined according to primary documents. Revenues are divided into sales revenue and non-operating income.
When the organization’s income tax is calculated, the tax rate, revenue is not taken into account:
- from property received free of charge;
- in the form of a pledge ;
- capital contributions;
- assets received under loan agreements;
- property received for targeted financing.
Expenses are justified and documented expenses incurred by the taxpayer, provided that they were aimed at generating income. When an organization’s income tax, tax rate are calculated, the amount of fines, penalties, interest, dividends, payments for excess emissions of substances, expenses for voluntary insurance, material assistance, pension allowances, etc. are not included in the expenses. A full list of amounts that excluded from expenses, presented in Art. 270 Tax Code of the Russian Federation. Normalized expenses can be written off not completely, but partially. Since 2017, the amount spent on assessing the qualifications of employees can also be attributed to expenses. However, there is one important condition: the employee must confirm his consent to the assessment of the level of qualification in writing.
Reporting periods
The tax rate for corporate profit tax is fixed. Reports on the calculation of the amount of the fee must be provided for 6, 9 and 12 months. Advance payments should be paid to the budget monthly. Since 2016, the average quarterly amount of sales revenue has been increased to 15 million rubles.
The tax base
How is the corporate income tax calculated? The tax rate is multiplied by the difference between revenues and expenses. If the amount of revenue is less than the amount of costs, then the base is zero. Profit is determined on an accrual basis from the beginning of the calendar year. Since the legislation spells out certain types of corporate income tax rates, income must be considered separately for each type of activity.
The Tax Code defines the specifics of determining income and expenses for different categories of payers: banks (st. 290-292), insurance companies (st. 293), non-state pension funds (st. 295), microfinance organizations (st. 297), professional participants of the RZB ( Art. 299), transactions with the Central Bank (Art. 280), urgent financial transactions (Art. 305), clearing organizations (Art. 299). Gambling organizations keep separate records of revenues and costs. Only economically viable expenses are considered, which are documented.
What is the corporate income tax rate?
The amount of the fee paid is transferred to the federal and local budgets. Since 2017, there have been changes in the distribution of interest. The basic corporate income tax rate has not changed and amounts to 20%. Previously, 2% of the amount paid went to the federal budget, and 18% remained in the local budget. From 2017 to 2020, a new scheme was introduced. The amount of tax calculated at the rate of 3% will be transferred to the federal budget, and 17% to the budget of the constituent entities of the Russian Federation. Regional authorities may reduce the collection rate for certain categories of payers. In 2017-2020, it cannot be less than 12.5%.
Exceptions
For certain types of income, the corporate income tax rate is:
- Revenues of foreign companies from the use, rental of containers, mobile vehicles, international transport - 10%.
- The income tax rate of a foreign organization through a representative office that is not related to activities in the Russian Federation is 20%.
- Dividends of Russian organizations - 13%. The full amount of taxes remains in the local budget. Dividends received by foreign companies are taxed at a rate of 15%. This also includes interest income on state securities.
- Revenues from the Russian Central Bank, which are recorded on securities accounts, - 30%.
- Bank of Russia profit is 0%.
- Profit of agricultural producers - 0%.
- Profit of organizations involved in medical, educational activities - 0%.
- The income from the operation related to the sale of the share of the authorized capital is 0%.
- Revenues from work carried out in the implementation economic zone, tourist and recreational zone, subject to separate accounting of revenues and expenses - 0%.
- Revenues of a regional investment project, provided that they do not exceed 90% of all revenues - 0%.
Reporting
At the end of each tax period, the organization must submit a declaration to the Federal Tax Service. The form of the report and the rules for its preparation are approved by Order of the Federal Tax Service N MMV-7-3 / 600. The declaration is submitted to the inspection at the location of the enterprise or its unit. The report is submitted in paper form. The largest taxpayers can submit an electronic declaration, as well as organizations in which the average number of employees for the previous year was more than 100 people.
2017 tax changes
The amount of the provision for doubtful debts should be less than 10% of revenue for the previous or reporting period. Doubtful debt is debt that exceeds the amount of a counter obligation. If an organization has accounts receivable and payable to one counterparty, then only an amount in excess of accounts payable can be written off to doubtful debts.
The amount of loss carried forward is limited. From 01/01/2017 to 12/31/2020, it is impossible to reduce losses of previous periods by more than 50%. This change does not affect the base to which tax incentives apply. The changes relate to losses incurred after 01.01.2007.
Since 2017, the restriction on the transfer of the amount of losses incurred after 01/01/2007 has been lifted. The transfer can now be carried out for all subsequent years. Changes regarding the adjustment of taxes paid to the state and local budgets should be reflected in the declaration and payments. These documents must clearly reflect what amounts are paid at a rate of 3%, and which at a rate of 17%.
The reasons for the recognition of consolidated debt has become more. For example, there are two interdependent foreign organizations (one of the organizations is the founder of the second). Before one of them, a Russian company had a debt obligation. In this case, the debt is recognized as consolidated. It doesn’t matter what share of capital a foreign lender owns. Now the consolidated debt is determined by the size of all taxpayer obligations.
If the capitalization coefficient has changed during the reporting period, then the question may arise about adjusting the tax base. Since 2017, the costs of controlled debt do not need to be restated. As mentioned earlier, the costs incurred may include the costs incurred in assessing the qualifications of employees. In order to stimulate the conduct of such inspections, provisions will be developed on the accounting of valuation costs. The company will be able to take into account the costs if the assessment was carried out on the basis of a service agreement, and an employment contract was concluded with the subject.
The procedure for calculating tax penalties has been changed, and the amount of penalties has been increased. The changes relate to delays that arise after 10/01/2017. If you overdue the tax payment period by more than 30 days, then the amount of interest will have to be calculated using the following algorithm:
- 1/300 rate of the Central Bank, valid from 1 to 30 days of delay;
- 1/150 of the Central Bank rate effective from the 31 day of delay.
In the case of repayment of all arrears before 10/01/2017, the number of days of delay does not matter.