Value added tax is mandatory for any enterprise engaged in the production, sale of goods, and the provision of services. In this article we will talk about tax rates, objects of taxation, the system of calculating VAT and the importance of filling out a tax return.
The concept of VAT
Value added tax is indirect. It is transferred to the state budget by the seller, but at the exit it is paid by the consumer. VAT is included in the price of any product and is always paid by the last buyer.
VAT components
Understanding the essence of VAT for a “teapot” will be easier if you understand the concepts of tax credit and obligations, the difference between which is the actual amount to be paid to the state treasury:
- A tax credit is the amount by which tax liability can be reduced in a given reporting period, as it has already been paid earlier.
- Tax liability - the total amount of tax for the reporting period. For example, the seller wants to sell goods worth 10,000 cu with a margin of 15%, that is, for 11500 cu The VAT rate for it is 20%, that is, the tax is 2300 cu
Documentation of payments for goods and services occurs using tax invoices. In addition to them, there is another important document - an invoice, which is issued in two copies: one is intended for the seller, the other for the buyer. If you purchase a product, then register your invoice in the purchase book, if you sell, then in the sales book.
The calculation of VAT for the "teapot" will be simple if you save all the tax documentation. In the absence, incorrect execution or loss of the invoice from the seller, you are not entitled to a tax credit, which means an overpayment of VAT, since you have nothing to deduct from the tax liability.
Payment
VAT accounting for dummies begins with the registration of invoices in the sales book and the purchase book. The difference between the tax liability and the total amount of the tax credit for the reporting period is the VAT payable. If you carefully keep accounting records, it is very simple to calculate VAT. For dummies, postings can be very difficult, therefore, records must be made by a professional, since on their basis the final tax calculation is performed at the end of the reporting period.
The rate of value added tax depends on the activities carried out by the enterprise, as well as on its annual cash turnover. Let us explain the calculation of VAT on the example of the production and sale of women's dresses in the territory of the Russian Federation, VAT for which is 18%. The manufacturer purchased fabric and accessories in the amount of 20,000 rubles, and also paid VAT of 3,600 rubles. He received an invoice, which he entered in the book of purchases. 3600 rub. - This is a tax credit in this case.
From the source materials, 10 dresses were produced, which are planned to be sold at a price of 3500 rubles. each, that is, the total margin on the product will be 15,000 rubles. The tax liability is considered as follows: (3500 * 10) * 18/100 = 6300 rubles. The formula for mandatory VAT for a “teapot” is simple: a tax credit is deducted from the tax liability. In our example, the following must be done: 6300-3600 = 2700 rubles. The entrepreneur must pay VAT in the amount of 2700 rubles, as 3600 rubles. he had already brought in when he acquired fabric and accessories.
Taxpayers and objects of taxation
Individual entrepreneurs, organizations and persons transporting goods across the state border are VAT taxpayers. What is this for dummies? This means that you can determine whether you will pay value added tax as follows: you must determine your status in accordance with the Tax Code of the country where your company is registered.
The objects of taxation in the Russian Federation are the following operations:
- The sale of goods, services on the territory of the Russian Federation. These also include the transfer of property rights and collateral.
- Construction and installation work.
- Transfer of goods, services or work for your own needs. When calculating the VAT for the "teapot" it is worth considering that the costs of such operations are not deductible.
- Import of goods into the territory of the Russian Federation.
Tax rates in the Russian Federation
VAT for "dummies" (2014) is 3 rates: 0%, 10% and 18%, determined depending on the type of activity of the enterprise. Value added tax of 0% is levied on the sale of the following goods, services or work:
- Obligations performed by organizations of pipeline transportation of oil products, natural gas.
- Services of international transportation of goods.
- Providing railway rolling stock.
- Sale of goods that were exported according to the customs procedure of export.
A complete list of objects of taxation is set forth in Art. 164 of the Tax Code of the Russian Federation. 10% VAT is paid when selling food products:
- meat, poultry, seafood, fish;
- eggs
- salt, sugar;
- grains, cereals;
- Pasta
- dairy products;
- bakery products;
- vegetables;
- infant and diabetic nutrition.
10% is charged for the sale of such children's goods:
- clothes and shoes;
- beds and mattresses;
- diapers;
- strollers
- office supplies.
Educational books related to science or culture, as well as periodicals, are subject to 10% VAT. This does not apply to printed products of an erotic or advertising nature. Medical goods: drugs and medical devices are also included in the list of goods subject to VAT at a rate of 10%.
In all other cases, the tax rate of 18% applies. If we are talking about goods imported into the territory of the Russian Federation, then they are subject to value added tax in the amount of 10% or 18%.
Tax rates in Ukraine
VAT rates in Ukraine today are as follows: 0%, 7% and 20%. The 0% VAT rate applies in the following cases:
- operations of export of goods from the territory of Ukraine in the customs regime of export;
- delivery of goods for refueling sea vessels of territorial waters of other states, as well as vessels of the Ukrainian Navy;
- the supply of goods for refueling or maintaining aircraft operating international flights or included in the Ukrainian Air Force ;
- international transport of passengers, baggage and cargo by various means of transport.
A complete list of taxable items with a rate of 0% is set out in Art. 195 Tax Code of Ukraine. 7% value-added tax is imposed on medical supplies. In all other cases, the VAT rate of 20% applies. In Art. 196 Tax Code of Ukraine lists transactions that are not subject to taxation. The VAT for dummies of 2013 and 2014 was not subject to major legislative changes. In 2015, a reduction in the basic rate to 17% is possible.
Tax Payment and Reporting
The registration of invoices is the basis for calculating the VAT payable. A tax credit and a tax liability are carried out only if these documents are available. It is important that the invoices are correctly drawn up, otherwise they are invalid. In Russia, VAT is deducted to the budget after the reporting period - a quarter, in Ukraine - monthly. The taxpayer has 20 days to prepare documents reflecting VAT. What is it for "dummies": a declaration that is submitted to the tax office. On its basis, a desk tax audit is carried out.
Tax refund
If the tax liability is less than the tax credit, then VAT refunds are made. The taxpayer declares to the tax authority the amount to be reimbursed, which is determined during the desk audit. If there are no violations, then after 7 days the tax inspectorate makes a decision on the reimbursement of funds. Within 5 days after making a decision about it, the taxpayer is notified in writing. The required amount is returned by the territorial authority of the federal treasury during the working week.
If violations are detected during a desk audit, an act is drawn up and sent to the head of the tax department for consideration. He or his deputy make a decision on the existence of a tax offense and bringing the taxpayer to liability. It is worth noting that the amount claimed for refund can be refunded to pay off arrears, debts and fines for federal taxes.
Rules for filing a VAT return in the Russian Federation and in Ukraine
At the end of the reporting period, each company registered with the tax inspectorate receives a VAT return. For dummies, we note: in Russia, the quarter is considered the reporting period, and in Ukraine, the month. The quarterly period for the report is used only if the amount of taxable operations for the last 12 months does not exceed the amount of 300,000 UAH. Within twenty days following the last day of the tax period, the declaration must be submitted to the appropriate authorities. Payment of deductions in Ukraine must occur within thirty days after the closing of the reporting period, and in Russia - within twenty.
The filing of a tax return in Ukraine can be carried out personally by the taxpayer, transmitted electronically or sent by mail as a valuable letter with a mandatory notice. Starting from 01.01.2014, in Russia, a VAT return can only be submitted electronically via telecommunication channels. You can choose an electronic document management operator on the regional websites of the Federal Tax Service. It is necessary to conclude an agreement with him, obtain cryptographic protection equipment and an enhanced qualified electronic signature, which will be used to verify invoices and declarations.
The VAT declaration must be completed in strict accordance with the form established on the date of its submission.
Export VAT
Companies of the Russian Federation promoting their products abroad have a privilege from the state - this is a 0% VAT rate, since the full amount of tax for any product is always paid by the final buyer (in this case, a foreign consumer, but to the treasury of their state). Export VAT for dummies: a company providing goods or services abroad may refund the VAT paid earlier for raw materials, production, and labor, as it often exceeds the VAT recorded in the sales book.
For this, the exporting company must confirm the legitimacy of the adoption of a zero VAT rate, the fact of an export operation and the validity of the recoverable amount of tax. Documents must be submitted to the tax office:
- VAT return;
- invoices and copies of invoices;
- contract with a foreign partner;
- customs declaration confirming the shipment of goods abroad;
- copies of documents confirming receipt of goods in another country;
- application for VAT refund.
After that, the tax authority conducts a desk audit and decides on the possibility of returning the declared amount. If inaccuracies or errors are found in any document, this is fraught not only with a refusal to refund the required amount, but also with a fine. For a refund, it is important to comply with the deadlines and rules for submitting documents, as well as timely respond to requests from the tax office if additional information about the company’s activities is needed.
VAT for the state
VAT is a tax that everyone pays. The seller always includes it in the price of the sold product in order to return his funds, which he has already transferred to the budget. Thus, VAT is a significant and constant income to the state treasury. Zero VAT rate for exporting companies makes the development of foreign economic relations attractive, and this stimulates the flow of currency into the budget and stabilizes the country's balance of payments.
The system for the formation and payment of VAT is quite simple, you can read more about this in the Tax Code. Everything about VAT is written in the article, for "dummies" this information is enough to understand the essence of the tax in question, as well as the rules for its calculation, deductions to the treasury and the formation of relevant documentation.