Taxation

Unified tax payment

UTP from 2023: tax authorities will not collect debts or impose fines for failure to submit notifications

The Federal Tax Service (FTS) has announced that tax inspections should not collect negative balances on the unified tax account, including penalties. The ban will remain in effect until centralized processes for generating user tasks on sending requirements are launched. At the same time, tax authorities have been instructed to conduct individual reconciliations with taxpayers and insurers by March 1.

In addition, tax inspections should not impose fines for:

  • Failure to submit a notification of calculated taxes and contributions until the FTS clarifies when responsibility begins;
  • Failure to pay taxes and withhold tax amounts by the tax agent. The restriction is valid until May 1 and until the end of the declaration campaign for the results of 2022 when the final balance of the UTP is formed. The exception is situations where, as a result of checks, underestimation of the tax base or base for contributions or other incorrect calculation of taxes, fees, contributions was identified.

Letter from the Federal Tax Service of Russia dated January 26, 2023 No. ED-26-8/2@.

The positive balance of a unified tax account can be refunded at any time.

A taxpayer has the right to request a refund of funds that generate a positive balance in the unified tax account. To do this, a request must be submitted. The Tax Code of the Russian Federation does not limit the time frame for disposing of these funds. Therefore, a taxpayer can request a refund regardless of the date on which the balance was formed.

The Federal Tax Service reminded that amounts of taxes, fees, and contributions that are subject to reduction in the declaration or calculation, including adjustments, are not taken into account when determining the size of the overall obligation if more than 3 years have passed since the payment deadline. Therefore, these amounts will not be included in the positive balance.

Letter of the Federal Tax Service of Russia dated 31.01.2023 No. BS-3-11/1179@

VAT

VAT on advances: clarified how to handle deductions if goods are shipped at different rates

The Ministry of Finance considered a situation where VAT was paid on a prepayment at a single rate of 20/120, but the goods needed to be taxed at rates of 10 and 20%. According to the agency, only the tax calculated at the time of shipment can be deducted. The difference can be credited or refunded according to the general rules for overpayment.

It should be noted that the Central District Tax Service in 2018 adhered to the same approach: if VAT was paid on advances at 18%, but calculated at 10 and 18% during shipment, only the tax calculated at the time of shipment can be deducted. The Supreme Court of the Russian Federation did not revise this conclusion.

Letter from the Ministry of Finance of Russia dated 14.11.2022 N 03-07-11/110368

Deduction of VAT accrued by a tax agent (Article 161 of the Tax Code of the Russian Federation) in connection with the introduction of the ENS

Starting from 2023, the conditions for applying deductions of VAT amounts for organizations and individual entrepreneurs who pay this tax, including as tax agents, have changed. The relevant amendments were introduced by Federal Law No. 565-FZ of December 28, 2022 into Article 171 of the Tax Code of the Russian Federation.

Until 2023, paragraphs 2.2 and 3 of Article 171 of the Tax Code of the Russian Federation provided that deductions were due, including amounts of VAT paid by the taxpayer as a tax agent in accordance with Article 161 of the Tax Code of the Russian Federation.

From January 1, 2023, these provisions have been amended to provide that deductions are due for VAT amounts calculated by the taxpayer as a tax agent, rather than actually paid.

In addition, amendments to Article 172 of the Tax Code of the Russian Federation provide that tax deductions are applied based on documents confirming the calculation of VAT amounts by tax agents. Previously, documents confirming the payment of VAT as a tax agent were required.

The introduction of these changes is due, in part, to the fact that starting from 2023, the deadline for submitting a VAT return has been set for the 25th day of the month following the reporting quarter, and the payment deadlines for VAT have been moved to the 28th day of each of the three months following the end of the quarter.

The necessary changes related to the amendments to the Tax Code of the Russian Federation for VAT tax agents from 2023 in connection with the introduction of the ENS will be supported with the release of the next versions of “1C: Enterprise 8”.

For example, for “Accounting for Enterprise CORP”, version 3.0, the release of version 3.0.133 is scheduled for March 17, 2023.

Federal Law No. 565-FZ of December 28, 2022.

Amendments to the Treaty on the Eurasian Economic Union (EEU) have been ratified. The changes, among other things, affect the rules for paying value-added tax (VAT) for works and services listed in paragraph 4 of section 29 of the procedure for collecting indirect taxes.

Thus, if an organization purchases works or services for its branch or representative office, which are located or operate in another member state, then the place of implementation of the works, services will be the territory of that country.

Federal Law of December 29, 2022, No. 574-FZ. Effective date January 9, 2023.

The Federal Tax Service (FTS) has warned taxpayers that starting from March 1, 2023, the rules for filling out declarations for excise taxes on tobacco and tobacco products, as well as declarations for indirect taxes (VAT and excise taxes), will change.

In its letter dated February 3, 2023, No. SD-4-3/1221@, the FTS reminds that Federal Law No. 1-FZ of January 27, 2023, amended Article 181, paragraph 1 of the Tax Code of the Russian Federation, according to which, starting from March 1, 2023, the following are not considered excisable goods:

  • Electronic nicotine delivery systems;
  • Devices for heating tobacco.

Therefore, in the March 2023 reporting period, taxpayers should not indicate the codes for types of excisable goods “470” and “473” in the following declarations:

  • Declaration for excise taxes on tobacco (tobacco products), tobacco, electronic nicotine delivery systems, and liquids for electronic nicotine delivery systems, approved by the FTS Order No. MMV-7-3/95@ of February 15, 2018;
  • Declaration for indirect taxes (VAT and excise taxes) when importing goods into the territory of the Russian Federation from the territories of the EAEU member states, approved by the FTS Order No. SA-7-3/765@ of September 27, 2017.

Effective date: March 1, 2023.

Federal Law No. 1-FZ of January 27, 2023.

Starting from January 1, 2024, it will be allowed not to submit paper documents to confirm a zero VAT rate. Currently, exporters must submit documents on paper and in the form of electronic registries. From 2024, only registries can be submitted, which will include information on the goods from the contract and declaration. The moment of determining the VAT tax base will also become uniform. It will be determined on the last day of the quarter in which the package of documents confirming the zero rate is collected.

Effective from January 1, 2024. Federal Law dated 19.12.2022 № 549-FZ.

The Russian government has made changes to the list of medical goods that are exempt from VAT when sold and imported.

The list has now been expanded to include additional self-service and care products for people with disabilities.

Effective from April 1, 2023. Government Resolution dated December 22, 2022 No. 2374.

The Federal Tax Service (FTS) has clarified the form of the VAT declaration, the procedure for filling it out, and the format for submission. Compared to the previous version, the following innovations can be highlighted:

In section 3, line 120, the list of cases when reflected VAT deductions were adjusted (clause 9 of changes in the procedure for filling out). For example, deductions for connecting to gas distribution networks have been added.

New operation codes have been introduced: 1011215 – for the sale of digital assets, 1011456 and 1011457 – for providing temporary accommodation, etc. (Appendix 3 to the order). Earlier, tax authorities recommended using the same codes for both the first and second cases.

Starting from the VAT declaration for the first quarter of 2023. Order of the FTS of Russia dated 12.12.2022 N ED-7-3/1191@.

Services for providing temporary accommodation in hotels and other accommodation facilities are subject to a VAT rate of 0% only if they are provided in tourism industry facilities. Shift camps and trailer houses are not included in such facilities. Therefore, a VAT rate of 20% applies to services for accommodation in them.

It should be noted that earlier the FNS reported that a sanatorium also cannot apply a zero VAT rate to temporary accommodation services.

Letter of the Ministry of Finance of Russia dated 12.12.2022 N 03-07-11/121385

Zero VAT rate can be applied even if a building is rented out as a hotel.

The Ministry of Finance has considered the situation where non-residential premises or premises containing hotel rooms are leased out. A 0% VAT rate can be applied to rental services if the objects:

  • were commissioned after January 1, 2022. The same rule applies to reconstruction;
  • belong to types of tourist industry objects from the list;
  • are included in the register of tourist industry objects.

Letter of the Ministry of Finance of Russia dated November 2, 2022 No. 03-07-11/106726.

The Central District Arbitration Court deemed the position of a taxpayer who accumulated “input” VAT and claimed it as a deduction only upon the completion of the construction of a house to be unlawful. This should have been done as acts of acceptance of completed works were signed, invoices from contractors were received, and work was taken into account. It is from this moment that the three-year period for deduction should be counted.

It should be noted that such an approach has long been established by the courts, including the Supreme Court of the Russian Federation. The Ministry of Finance also shares this view.

Decision of the Central District Arbitration Court dated 20.12.2022 in case No. A83-18712/2021.

The obligation to submit a declaration for a tax or reporting period arises on the day following the end of the period. If there is no primary documentation, the data in the declaration, which was submitted before the end of the period, is presumptive or imaginary. Such a declaration has no legal significance. It does not correspond to the concept of a tax declaration and is not subject to verification. The Supreme Court of the Russian Federation refused to transfer the complaint.

It should be noted that earlier the Moscow District Arbitration Court pointed out that submitting a declaration before the end of the tax period is not prohibited.

Decision of the Supreme Court of the Russian Federation dated February 1, 2023 N 305-ES22-25615.

Transfer of property for public use is not sales

By order of the regional authorities, a building was confiscated from the company. The parties concluded a corresponding agreement. In exchange for the organization, the market value of the property was compensated. It was determined by an appraiser. However, the tax authorities decided that it was a sale and charged the company VAT.

The judges disagreed with the additional charges. Compensation for the property seized for state or municipal needs is compensation for damages, not the sale of property. Such a transaction is not subject to VAT.

Ruling of the Arbitration Court of the Urals District of 07.11.2022 in case No. A50-688/2022.

Salary, insurance contributions, and personal income tax

Housing for out-of-town employees: Ministry of Finance insists on contributions from expense reimbursements

If an employer compensates out-of-town employees for housing expenses, contributions must be paid. This applies to situations where the compensation is provided under a local NPA or employment contract, rather than under the law (including regional) or municipal act.

However, courts sometimes take a different approach: the payment may be considered social, and therefore not subject to contributions. For example, the Arbitration Courts of the North-Western and Volga Districts have come to such a conclusion.

Letter of the Ministry of Finance of Russia dated 08.09.2022 N 03-04-05/87274

Free meals for shift workers: Ministry of Finance reminds to pay contributions

Finance experts have clarified that shift workers are entitled to three meals a day, but it is not legislatively established that it should be free. If the employer pays for meals or provides food products under a local act, contributions must be charged.

The Ministry of Finance has already expressed a similar opinion. The Federal Tax Service agrees as well.

Regarding the issue of meals for ordinary employees, courts often hold a different opinion. For example, the Supreme Court of the Russian Federation agreed with the conclusions of lower courts: subsidies for meals are not subject to contributions. We believe that this approach can also be applied to free meals for shift workers.

Letter from the Ministry of Finance of Russia dated 25.10.2022 N 03-15-06/103218

Insurance premiums for which a deferment was granted in 2022 can be paid in installments.

Starting from March 1, 2023, rules for providing installment payments for insurance premiums for which organizations and individual entrepreneurs were previously granted a one-year deferment will come into effect. This applies to insurance premiums for the periods of April-June and July-September 2022.

The outstanding amount can be paid in equal monthly installments until May 28, 2024. The monthly payment deadline is no later than the 28th of each month (which may be shifted due to weekends and holidays).

An application for installment payment must be submitted via the TCS form, which the FNS will post on its website. The deadline for submission is no later than April 28, 2023.

If an organization or individual entrepreneur received a deferment for both the April-June and July-September periods of 2022, a separate application must be submitted for each period.

If an organization or individual entrepreneur does not want to use the installment plan, then last year’s premiums must be paid no later than the 28th of the month to which the payment deadline was postponed. For example, insurance premiums for April 2022 must be paid no later than May 29, 2023 (the deadline is shifted due to a holiday).

Special rules apply to insurance premiums calculated by individual entrepreneurs for 2021 from income exceeding 300,000 rubles.

Government decree of January 17, 2023, No. 28.

In 2023, an employee under the Individual Pension Capitalization program may receive sick leave and child benefits. The condition is that in 2022, they worked under an employment contract and at least 4,833.72 rubles were paid in contributions to the Pension Fund.

Starting from January 1, 2023, this provision is established by Article 2 of Law No. 255-FZ and clarified by the letter from the Ministry of Labor and Social Protection of the Russian Federation dated August 5, 2022, No. 17-1 / B-103.

Starting from January 1, 2023, the obligation to provide a certificate of salary under 182n has been cancelled. Information about previous employers’ payments should be provided by the Pension Fund of the Russian Federation.

This is in accordance with Article 9 of Law No. 237-FZ and Article 14.1 of Law No. 255-FZ, as well as Order No. 677n issued by the Ministry of Labor on October 19, 2022.

Property tax

Property tax is levied on real estate that is reflected on the organization’s balance sheet as fixed assets in the manner established for accounting purposes.

From January 1, 2022, capital expenditures are recognized as fixed assets in the manner established by Federal Standard of Budgetary Accounting 26/2020 “Capital Expenditures” (approved by the order of the Ministry of Finance of Russia of September 17, 2020 No. 204n).

According to paragraph 5 of Federal Standard of Budgetary Accounting 26/2020, an organization’s expenses on the improvement and/or restoration of fixed assets are recognized as capital expenditures. In accordance with paragraph 18 of Federal Standard of Budgetary Accounting 26/2020, capital expenditures are considered fixed assets after the completion of their intended purpose, that is, after the object of the capital expenditures is brought into a state and location suitable for use for the planned purposes.

In the letter dated December 14, 2021 No. 03-05-05-01/101648, the Ministry of Finance of Russia clarified that if the costs of inseparable improvements to leased real estate meet the requirements of Federal Standard of Budgetary Accounting 26/2020 and are recognized as fixed assets upon completion, they are subject to property tax on the tenant until they are removed from the composition of fixed assets.

Tax inspections

Breaking down business: explained how to determine actual tax liability

The Federal Tax Service (FTS) clarified to lower authorities how to account for taxes paid by participants in a scheme, calculate fines and penalties. Here are the most important points:

When calculating taxes under the general system, penalties and fines for the organizer of the scheme take into account taxes paid by scheme participants from income from artificially divided activities. They are taken into account along with income, expenses, and undeclared VAT deductions. The Supreme Court of the Russian Federation applies a similar approach. See more in the material.

The tax paid under a special regime is primarily taken into account as an additional tax on profits. Based on specific dates of “payment”, penalties and fines for corporate profits tax are recalculated.

Any unaccounted balance is credited when determining other arrears resulting from checks, including indirect taxes. The dates of their “payment” are recognized as the date of the decision on the check. Such accounting does not affect the amount of the fine. After all, it is calculated based on the initial arrears. Penalties will stop accruing in part.

The limitation period for returning overpayment is not applied. At the same time, recalculation and accounting of amounts are carried out only within the framework of the verification period.

Scheme participants will be informed that taxes on income from artificially divided activities were taken into account when determining the actual tax liabilities of the scheme organizer.

The FTS draws attention: if the scheme did not compensate for the damage to the budget, the overpayment will not be returned. The Supreme Court of the Russian Federation has come to a similar conclusion.

Letter of the FTS of Russia dated 14.10.2022 N BV-4-7/13774@

Clarification after an act: the court recognized the inspection’s decision on the primary declaration during the desk audit as lawful

After the desk audit, the inspection drew up an act. Before making a decision, the organization corrected the data and filed a clarification. However, the decision was made based on the indicators of the initial declaration. The organization considered the inspectors’ actions unlawful. After submitting the clarification, they were supposed to complete the check of the primary declaration.

The court did not support the organization. According to the Tax Code of the Russian Federation, the inspection is terminated if a clarification is submitted before its completion. In this case, a new declaration is checked. The general rule for the end of the inspection is the expiration of the 3-month period. If the inspection is completed earlier, the date from the act is used.

The organization filed a clarification after the end of the inspection and the drawing up of the act. The inspection has no reason not to consider the inspection materials.

Resolution of the Northwest District Arbitration Court dated 05.10.2022 in case No. A66-10775/2021.

The court declared the request for documents without specifying the transaction and counterparty outside of a tax audit illegal.

Tax officials received information from the Ministry of Internal Affairs that the company was working with “one-day firms.” Outside of an audit, they demanded that documents and information be provided for the past 3 years.

The organization challenged the actions of the inspection. The court supported it. Tax officials requested general information about the taxpayer’s work. They did not specify specific transactions or counterparties in the demand. The necessary information could have been requested by the inspection during the tax audit, and without it, only for a specific transaction.

It should be noted that earlier, the AC of the Central District recognized the request for documents outside of an audit in general for the counterparty as illegal, not for a specific transaction. The Constitutional Court of the Russian Federation clarified the nuances regarding the request for documents for a transaction outside of an audit.

Ruling of the AC of the Moscow District dated 31.10.2022 in case No. A40-74731/2022.

Unscheduled cash register inspections will resume in 2023

The Ministry of Economic Development reminded that the restriction on unscheduled inspections is in effect until the end of 2022. Extending it is not advisable. Therefore, from January 1, 2023, general rules for cash register inspections apply.

Letter from the Ministry of Economic Development of Russia dated November 15, 2022 No. D24i-37133.

Despite submitting the declaration two years later, the courts still reduced the penalty

An organization submitted reports for the property tax for organizations with a delay of more than two years and a year. The inspection calculated a penalty at the maximum rate of 30% of the amount due. However, the courts reduced the penalty by 2 times.

The following circumstances were considered as mitigating:

  • The organization has been operating since 2002, regularly and timely submitting all tax reports;
  • The tax and penalties were paid in full based on the declarations, which was a significant amount for the taxpayer;
  • The size of the penalty is disproportionate to the consequences of the organization’s actions.

Decision of the Arbitration Court of the Moscow District dated December 14, 2022, in case No. A40-277862/2021.

Accounting

The form for applying to restrict access to accounting data from the information resource has been approved

Starting from January 1st, to restrict or resume access to data from the accounting information resource (GIR BO), it is necessary to submit an application in the FNS form. The application must include the following information:

  • Organization name;
  • Reason for restriction;
  • Periods for which access should be restricted or resumed;
  • Date from which this should be done.

The format and procedure for submitting the application have also been approved.

Access to information contained in the state information resource of accounting (financial) reporting (hereinafter – state information resource) may be restricted in the following cases:

a) the organization is included in the consolidated register of defense industry organizations provided for by the Resolution of the Government of the Russian Federation of February 20, 2004 No. 96 “On the consolidated register of defense industry organizations”;

b) the organization is included in the list of strategic enterprises and organizations provided for by Article 190, paragraph 2 of the Federal Law “On Insolvency (Bankruptcy)”;

c) the organization is included in the list of residents provided for by paragraph 4.2 of Article 19 of the Federal Law “On Currency Regulation and Currency Control”.

d) The organization is included in the list of persons to whom restrictive measures introduced by foreign states, state associations and/or unions and/or state (interstate) institutions of foreign states or state associations and/or unions may be applied, are applied, or extended to in accordance with the rules for forming the list of persons to whom restrictive measures introduced by foreign states, state associations and/or unions and/or state (interstate) institutions of foreign states or state associations and/or unions may be applied, established by the Government of the Russian Federation;

e) The decision to restrict access to information contained in a state information resource has been made.

The Central Bank of the Russian Federation in relation to organizations submitting accounting (financial) statements to the Central Bank of the Russian Federation;

The Government of the Russian Federation in relation to organizations not mentioned in subparagraphs “a” – “g” of this clause, upon the submission of a federal executive body responsible for implementing a unified state policy in the field of economy in which the organization operates, access to information contained in a state information resource about which the organization is restricted is limited.

Restriction of access to information contained in a state information resource is carried out by the Federal Tax Service within 3 working days from the day of receipt of the application, in case the Federal Tax Service has not made a decision to refuse to restrict access to such information.

Access is restricted (restored) to the following information contained in a state information resource:

a) accounting (financial) statements of the organization:

in the composition established by the Federal Law “On Accounting” and federal and industry accounting standards adopted in accordance with it, including comparative indicators for periods preceding the reporting period;

for the reporting period (reporting periods) specified in the application, or for reporting periods starting from the reporting period specified in the application;

b) audit report on accounting (financial) statements in cases where accounting (financial) statements are subject to mandatory audit.

Order of the Federal Tax Service of Russia of 14.10.2022 N ED-7-1/939@

Other changes

Russian federal authority Roskomnadzor has released requirements for how to confirm the destruction of personal data of citizens starting from March 1, 2023.

The set and content of documents that the operator must create depend on whether automation tools are used in the processing of personal data.

If the operator, for example, applies these tools without simultaneous “manual processing”, they must create:

  • A document on the destruction with mandatory elements;
  • An export from the event log in the personal data information system. The mandatory elements for export can be excluded.

In this case, a digital document certified with an electronic signature will be considered equivalent to a paper document with a handwritten signature.

The document on the destruction and the export will have to be stored for 3 years from the moment of destruction of personal data.

Currently, operators themselves determine how to document the destruction of personal information.

Order of Roskomnadzor dated 28.10.2022 No. 179.

17.03.2023 How to Register Transborder Data Flows in Russia: A Step-by-Step Guide

Starting from March 1, 2023, it will be necessary to use a waybill with updated information.

The Ministry of Transport has approved a new set of information to be included in the waybill and a procedure for completing it. This should be applied from March 1, 2023 until March 1, 2029. The current order of the Ministry of Transport will be repealed.

Instead of information about the owner of the vehicle, information about the person who issued the waybill must be specified. The waybill no longer includes the name and number of the waybill.

The owner of the vehicle will still be able to provide additional information.

The waybill can be issued not only on paper but also in electronic form. The owner of the vehicle is responsible for creating an electronic waybill. If the vehicle is rented with a crew, the lessor completes the waybill.

Medical examination entries in the electronic waybill are certified by a medical professional using an enhanced qualified electronic signature or an enhanced unqualified electronic signature created on the government services portal.

The same signatures certify the marks:

  • The date and time of the release of the vehicle to the line, as well as the date, time, and result of the pre-trip inspection of the technical condition;
  • The date, time, and odometer readings when the vehicle leaves the parking lot and returns to it. The same marks are certified when transferring the vehicle to the subsequent driver in cases where multiple route sheets are drawn up for each driver.

In the first case, the signature is put by the employee responsible for the technical condition and safe operation of the vehicle, and in the second case, by the person appointed by the manager (IP).

Ministry of Transport of Russia Order dated 28.09.2022 N 390.

New product labeling rules will come into effect

Companies will have to label more products. For example, starting from March 1st, bicycles and bicycle frames will require labeling. Retailers will have to report sales of any labeled drinking water to “Honest Mark” and scan labeling codes upon sale. Shoe sellers must complete the re-labeling of their remaining stock by the end of March. In addition, some companies will need to add a “product code” to their receipts, specifically fur traders.

Government order dated April 28, 2018 No. 792-r, Government resolutions dated June 16, 2022 No. 1090, October 19, 2022 No. 1861, No. 1862.

Accounting