Nowadays, borrowed funds accompany the organization almost throughout its activities. With their help, production is modernized, raw materials are purchased, and finally, working capital is simply replenished. The source of such money is (most often) banking institutions. But there is a unique type of loan administered by the state, and with the help of which it is possible to solve problems with budget payments. This is an investment tax credit.
What is the essence of such a loan? Let's consider it in more detail.
Judging by the definition given in the Tax Code, such a loan is more of a deferred payment than a loan of funds. Indeed, no real funds are issued for it, but after its registration, the organization is allowed to pay taxes in a lower amount.
Despite the fact that the agreement is concluded with a state organization, most of the conditions are similar to those used by banks. Here you can set the loan validity period, repayment periods and even interest (most often very small). Here property liability for non-return is determined, guarantees of fulfillment of obligations are accepted
To whom is issued
Despite the fact that not only companies, but also individual entrepreneurs can have tax debts , investment tax credit is issued exclusively to legal entities. This is due to the features of property liability. The organization can take out the mortgaged property for debts; for this, even a court decision may not be required. But it is very difficult to deprive a citizen of housing. The Civil Code protects personal property, especially if it is necessary for living.
For what needs is issued
As for the subject of lending, it is most often this way that the income tax is extinguished, the payment terms of which are very expensive to violate. Sanctions in the form of a penalty will inevitably follow, and with a long delay, fines. With the volume of payments that are inherent to him, all these amounts are poured into significant funds.
It is noteworthy that the state took care that this list was not too extensive. In addition to income tax, only certain types of regional and local payments to the budget can be credited.
What is the mechanism
Investment tax credit has a very specific mechanism. The organization to which it is provided may, as we have said, reduce payments for the reporting period. However, the end point of the contractual relationship is the moment when the amount of underpaid tax is equal to the amount of the loan. As a result, such an agreement looks like a permit for the presence of debts.
In addition, payments can only be reduced to a certain limit. Legislation has set this bar at 50% of the amount of tax paid under ordinary conditions.
Such a loan should have a certain time frame. The minimum term is one year, the maximum is five years. During this time, it is understood that the problems will be resolved.
In this case, a situation may arise when the organization had to pay taxes less than planned, or even received losses. Then there is a surplus on credit resources. It's simple: the amount of money saved is then transferred to a new reporting period.
Of course, the organization issuing the investment tax credit should be prepared for increased control by the tax authorities. Firstly, when preparing the contract, she will have to prepare a solid justification and submit detailed reports on her financial activities. Secondly, they will check the organization much more often than usual. This always happens when using public funds.