To talk about what value-added tax (VAT) is is not the most difficult task if you do not go into the details. Basic knowledge on this issue will not be superfluous not only for future accountants and economists, but also for people who are far from such specific areas of activity.
The economic content of VAT
VAT is one of the taxes in Russia that has a significant impact on the formation of the state budget. The essence of value added tax fully reflects its name. That is, it is with added value by which the manufacturer has increased the value of the initial product (raw material or semi-finished product) that it is accrued.
For dummies: VAT is a tax that is charged and paid by manufacturing enterprises, wholesale and retail trade organizations, as well as individual entrepreneurs. In practice, its size is defined as the product of the rate on the difference between the revenue received from the sale of our own products (goods, services) and the amount of costs that were used for its manufacture. Simply put, that part of the goods that the manufacturer or seller has “grown” to the original product (in fact, this is the newly created value) is the taxable base. This type of tax is indirect, since it is included in the price of the product. Ultimately, the buyer pays for it, and formally (and practically) it is paid by the owners and producers of the goods.
Objects of taxation
The objects for calculating VAT are proceeds from the sale of created products, works and services, as well as:
- the value of property rights to goods (works, services) upon their gratuitous transfer;
- the cost of construction and installation works carried out for their own needs;
- the value of imported goods, as well as goods (works, services), the transfer of which was carried out on the territory of the Russian Federation (it is not included in the taxable income tax base).
VAT payers
Article 143 of the Tax Code of the Russian Federation establishes that VAT payers are legal entities (Russian and foreign), as well as individual entrepreneurs who are registered with the tax authorities. In addition, payers of this tax include persons moving goods and services across the borders of the Customs Union, but only if the customs legislation establishes the obligation to pay it.
VAT tax rates
In Russia, VAT tax rates are provided in 3 versions:
- 0%.
- 10 %.
- 18 %.
The amount of tax assessed is determined by multiplying the interest rate divided by 100 by the tax base.
Non-operating sales (deposit operations on the formation of the authorized capital, transfer of the fixed assets and property of the enterprise to the assignee and others), land sale transactions, and many others fixed by law are not recognized as objects for calculating this tax.
18% VAT rate
Until 2009, a 20% VAT rate was applied to the largest number of transactions. The current rate is 18%. To calculate VAT, it is necessary to calculate the product of the taxable base and the interest rate divided by 100. Even easier: determining (for "dummies") VAT, the tax base is multiplied by the tax rate coefficient - 0.18 (18% / 100 = 0.18). Thus, the amount of VAT is included in the price of goods, works and services, falling on the shoulders of consumers.
For example, if the price of goods without VAT is 1000 rubles, the rate corresponding to this type of goods is 18%, then the calculation is simple:
VAT = PRICE X 18/100 = PRICE X 0.18.
That is, VAT = 1000 X 0.18 = 180 (rubles).
As a result, the selling price of goods is the calculated value of the product with VAT.
Reduced VAT rate
A 10% VAT rate applies to a certain group of food products considered socially significant for the state population. Such products include milk and their derivatives, many cereals, sugar, salt, sea, fish and meat products, as well as some types of products for children and diabetics.
Zero VAT rate, features of its application
The rate of 0% applies to goods (works and services) related to space activities, sales, mining and production of precious metals. In addition, a significant amount of operations is made by transactions on the movement of goods across the border, during the execution of which it is necessary to follow customs procedures. Zero VAT rate requires documentary evidence of export, which is provided to the tax authorities. The package of documents includes:
- The contract (or contract) of the taxpayer for the sale of goods to an alien outside the Russian Federation or the Customs Union.
- Customs declaration for the export of products with a mandatory mark of the Russian customs on the place and date of departure of the goods. You can submit documents on transportation and escort, as well as other evidence of the export of any products outside the borders of the Russian Federation.
If within 180 days from the moment the goods were transported across the border, the necessary documents were not completed and not submitted to the tax package, the payer is required to accrue and pay VAT at the 18% (or 10%) rate. After the final collection of customs confirmation, it will be possible to return the tax paid or set off it.
Use of the estimated rate
The estimated rate is used for prepayment and in some other cases. For "dummies" VAT at this rate is calculated when it is necessary to distinguish the "sitting" tax from the total cost of the goods. This action is performed according to the simplest formulas, depending on the type of applicable VAT rate.
At a 10% VAT rate, the calculated one is 10% / 110%.
At an 18% rate - 18% / 118%.
Filling in the VAT tax return and deadlines for submitting it
At the initial stage of preparation for the submission of tax reporting, the accountant's work is focused on determining the base on which the amount of tax is subsequently charged. Filling out a VAT tax return begins with a title page. It is very important to carefully and carefully enter all the required details (names, codes, types, etc.). On all pages the date and signature of the head (or IP) is provided, which must be stamped on the title page. The declaration must be submitted to the tax office at the place of registration, but no later than the 20th day of the month following the reporting quarter. In the same time period, its payment was also established (with a quarterly term for provision). Thus, the payment and tax assessment for the 1st quarter of 2014 had to be made before April 20 of the current year.
Tax calculation
For "dummies": VAT payable is calculated in several stages.
- Determination of tax base.
- Accrual of VAT.
- Determining the amount of tax deductions.
- The difference between the accrued and paid tax (deduction) is the amount of VAT payable.
If the deductions exceed the accrued amounts, the taxpayer has the right to compensation for this difference upon written request and after the decision is made, but more on that later.
Tax deductions
Particular attention should be paid to deductions, that is, the amount of VAT that is presented by suppliers, and also paid at customs when exporting goods. It is very important that the tax deductible be directly related to the accrued turnover. Simply put, if VAT is calculated on sales of goods “A”, then all purchases related to this product are taken into account. Confirmation of the deduction is certified by invoices received from suppliers, as well as documents on payment of tax amounts at the border. VAT is highlighted in a separate line. Such invoices are filed in a separate folder, and the turnover for each product is recorded in the purchase book in the approved form.
During tax audits, quite often questions arise regarding the improper filling of required fields, the indication of incorrect details, as well as the lack of signatures of authorized persons. As a rule, in such a situation, employees of the Federal Tax Service Inspectorate annul the corresponding deductions, which leads to additional VAT and penalties.
Electronic submission of declarations
Since 2014, a VAT tax return should be submitted only in electronic form. There are only a few exceptions related to special tax regimes.
VAT Refund Terms
Satisfaction of the rights of payers to refund the amount of tax paid is based on a desk audit conducted by tax authorities. The application procedure for VAT refunds occurs for a few payers who meet the following conditions:
- The total amount of taxes paid (VAT, excise taxes, income taxes and production taxes) must be at least 10 billion rubles. for 3 calendar years that preceded the year of filing the application for reimbursement;
- the payer received a bank guarantee.
The application of this procedure provides one more condition: the payer must be registered with the tax authorities of the Russian Federation for at least 3 years before submitting a tax return for
tax refund.Compensation Procedure
To refund VAT, the taxpayer must submit a written application for tax refund to the tax authority. These amounts can be returned to the current account indicated in the application or set off against other tax payments (if there is a debt on them). Within 5 working days, the inspection makes a decision. VAT refunds are made at the same time in the amount specified in the decision. In case of untimely receipt of funds to the current account, the taxpayer has the right to receive interest on the use of this money from the tax authorities (from the budget).
Office check
In order to verify the validity of the returned amounts, the tax inspectorate carries out a desk audit within 3 months. If the facts of violations have not been established, then within 7 days after the completion of the audit, the inspected person is informed of the legality of the set-off.
In the event that violations of the current Russian legislation are discovered, the inspection draws up an audit report, which results in a decision being made regarding the taxpayer (either to refuse to hold or to hold accountable). In addition, the offender is required to return excessively received VAT and interest for the use of these funds. In case of non-return of the specified amount, the obligation to return it to the budget of the Russian Federation rests with the bank that issued the guarantee. Otherwise, the tax authorities write off the necessary funds in an indisputable manner.
Some provisions related to the calculation and payment of VAT are complex enough for a momentary understanding, but thoughtful awareness gives the result. Particular difficulty in perceiving this tax is created by specific terms and regular changes in the legislation of the Russian Federation.