Value added tax

Value added tax (VAT)- indirect tax, a form of withdrawal to the state budget of a part of added value, which is created at all stages of the process of production of goods, works and services and is contributed to the budget as they are sold.

Externally, VAT resembles a turnover tax: the seller adds it to the cost of goods, works or services sold. However, the buyer has the right to deduct from the amount due for payment to the budget the amount of tax that he paid for these goods (works, services). Thus, this tax is indirect, and its burden ultimately falls not on traders, but on the final consumers of goods and services. This tax system is designed to avoid paying taxes due to the fact that goods and services travel a long way to the consumer; Under the VAT system, all goods and services incur only the tax that is levied upon the final sale of the goods to the consumer. The interest rate may vary depending on the type of product. In payment documents, VAT is highlighted as a separate line.

VAT was first introduced on April 10, 1954 in France. His invention belongs to the French economist Maurice Lauret (in 1954, director of the Directorate for Taxes, Duties and VAT of the French Ministry of Economy, Finance and Industry). Currently, 137 countries levy VAT. Among developed countries, VAT is absent in countries such as the United States, where it is replaced by a sales tax at a rate of 3% to 15%.

Russia

The tax period (Article 163 of the Tax Code of the Russian Federation) is established as a quarter.

Tax rates (Article 164 of the Tax Code of the Russian Federation)

1. A 0% rate is applied, for example, when selling goods exported under the customs export procedure.
2. A rate of 10% is applied, for example, when selling certain food products, goods for children, and medical goods.
3. The rate of 18% is the basic rate, applied in all other cases.

The procedure for calculating tax (Article 166 of the Tax Code of the Russian Federation)

When determining the tax base, the amount of tax is calculated as the percentage share of the tax base corresponding to the tax rate, and in case of separate accounting - as the amount of tax obtained as a result of adding the amounts of taxes calculated separately as the percentage shares of the corresponding tax bases corresponding to the tax rates. The moment of determining the tax base (Article 167 of the Tax Code of the Russian Federation) is the earliest of the following dates:

1. day of shipment (transfer) of goods (works, services), property rights;
2. day of payment, partial payment for upcoming deliveries of goods (performance of work, provision of services), transfer of property rights.
3. transfer of title for the purposes of this chapter is equivalent to its shipment.
4. When a taxpayer sells goods transferred to him for storage under a “warehouse storage agreement” with the issuance of a warehouse certificate, the moment of determining the tax base for these goods is determined as the day the warehouse certificate is sold.
5. the day of assignment of a monetary claim or the day of termination of the corresponding obligation

The taxpayer has the right to reduce the total amount of tax by established tax deductions (Article 171 of the Tax Code of the Russian Federation). Subject to deductions are tax amounts presented to the taxpayer when purchasing goods (work, services), as well as property rights on the territory of the Russian Federation, or paid by the taxpayer when importing goods into the territory of the Russian Federation and other territories under its jurisdiction, in customs procedures for release for domestic consumption , temporary import and processing outside the customs territory or when importing goods transported across the border of the Russian Federation without customs clearance.

Procedure and deadlines for paying taxes to the budget (Article 174 of the Tax Code of the Russian Federation)

The tax period for VAT is set as a quarter. Payment of tax on transactions recognized as an object of taxation on the territory of the Russian Federation is made at the end of each tax period based on the actual sale (transfer) of goods (performance, including for one’s own needs, work, provision, including for one’s own needs, services) for the expired tax period in equal shares no later than the 20th day of each of the three months following the expired tax period. The VAT tax return form was approved by order of the Ministry of Finance of the Russian Federation dated October 15, 2009 No. 104n.

Tax refund procedure (Article 176 of the Tax Code of the Russian Federation)

If, at the end of the tax period, the amount of tax deductions exceeds the total amount of tax calculated on transactions recognized as the object of taxation, the resulting difference is subject to compensation (offset, refund) to the taxpayer. After the taxpayer submits a tax return, the tax authority verifies the validity of the amount of tax claimed for reimbursement when conducting a desk tax audit in accordance with the procedure. Upon completion of the audit, within seven days, the tax authority is obliged to make a decision on the reimbursement of the appropriate amounts, if during the desk tax audit no violations of the legislation on taxes and fees were identified.

If violations of the legislation on taxes and fees are detected during a desk tax audit, authorized officials of the tax authorities must draw up a tax audit report. The report and other materials of the desk tax audit, during which violations of the legislation on taxes and fees were revealed, as well as objections submitted by the taxpayer (his representative) must be considered by the head (deputy head) of the tax authority that conducted the tax audit. Based on the results of consideration of the materials of the desk tax audit, the head (deputy head) of the tax authority makes a decision to hold the taxpayer accountable for committing a tax offense or to refuse to hold the taxpayer accountable. Simultaneously with this decision, the following is made:

• decision to reimburse the full amount of tax claimed for reimbursement;
• decision to refuse to reimburse the full amount of tax claimed for reimbursement;
• a decision to partially reimburse the amount of tax claimed for reimbursement, and a decision to refuse to partially reimburse the amount of tax claimed for reimbursement.

If the taxpayer has arrears on taxes, other federal taxes, debts on the corresponding penalties and (or) fines subject to payment or collection, the tax authority independently offsets the amount of tax to be reimbursed to pay off the said arrears and arrears on penalties and (or) ) fines.

Latvia

The VAT Law came into force in 1995; At the same time, the turnover tax was abolished.

Israel

The following main acts of EU secondary law in this area are identified:

• First Council Directive 67/227/EEC of 11 April 1967 on the harmonization of the laws of the Member States with regard to turnover taxes (not in force). This act was adopted with the aim of replacing the multi-level cumulative system of indirect taxation in EU member states and ensuring the achievement of a significant degree of simplification of tax calculations and neutrality of the indirect tax factor in relation to competition in the EU. Moreover, the introduction of VAT, replacing other turnover taxes, has become an obligation for member states.

• Second and Third Council Directive 68/227/EEC of 11 April 1967 and 69/463/EEC of 9 December 1969 “On the harmonization of the legislation of the Member States with regard to turnover taxes - introduction of value added tax in the Member States” ( It does not work). These acts provided a number of deferments for the introduction of VAT in some member states.

• Sixth Council Directive 77/388/EEC of 17 May 1977 “On the harmonization of the legislation of the Member States with regard to turnover taxes - a common value added tax system: a uniform calculation base” (not in force). The provisions of this act reflect the basic principles of the functioning of the VAT system. This act had a huge number of changes and additions. It was a full-fledged tax act. Separately, it is necessary to note his harmonization of VAT rates in the member states.

• Eighth Council Directive 79/1072/EEC of 6 December 1979 “On the harmonization of the laws of the Member States with regard to turnover taxes - Provisions on the reimbursement of value added tax to taxable persons not established in the territory of the country” (the provisions of this act allow a taxpayer of one state -member to receive a VAT refund in another member state). From 01/01/2009 a new Directive is in force.

• Thirteenth Council Directive 86/560/EEC of 17 November 1986 “On the harmonization of the laws of the Member States with regard to turnover taxes - Provisions on the reimbursement of value added tax to taxable persons not established in the Community” (this act allows a third-country taxpayer to receive VAT refund in an EU Member State). From 01/01/2009 a new Directive is in force.

• Council Directive 2006/112/EC of 28 November 2006 on a common value added tax system can be considered a triumph for European tax integration. In force since January 1, 2007, this act was adopted to replace the current integration legislation in the field of VAT regulation (in particular the famous Sixth Directive) without introducing significant changes to it. The changes affected mainly the logical structure of the document. The act consists of 15 chapters, 414 articles and 14 annexes, it defines: subject and scope of application (Chapter 1); territory of application (Chapter 2), taxable persons (Chapter 3), taxable transactions (Chapter 4); place of taxable transactions (Chapter 5), incurrence of tax liability and collection of VAT (Chapter 6), taxable amount (Chapter 7), rates (Chapter 8), exemptions/tax benefits (Chapter 9), deductions (Chapter 10), obligations of taxable persons persons and certain categories of non-taxable persons (Chapter 11), special tax schemes (Chapter 12), derogation provisions (Chapter 13), other provisions (Chapter 14), final provisions (Chapter 15).

Tax rate table

Russia

EU countries

A country	Bid		Abbreviation	Name
	Standard	Reduced
Austria	20 %	12% or 10%	USt.	Umsatzsteuer
Belgium	21 %	12% or 6%	BTW TVA MWSt	Belasting over de toegevoegde waarde Taxe sur la Valeur Ajoutée Mehrwertsteuer
Bulgaria	20 %	7 %	DDS = DDS	Dank Added Stoinost
Great Britain	20 %	5% or 0%	VAT	Value Added Tax
Hungary	27 %	5 %	ÁFA	általános forgalmi adó
Denmark	25 %		moms	Merværdiafgift
Germany	19 %	7 %	MwSt./USt.	Mehrwertsteuer/Umsatzsteuer
Greece	23 %	13% or 6.5% (For the islands of the Aegean Sea basin the tax rate is reduced by 30%: 13%, 6% and 3%)	ΦΠΑ	Φόρος Προστιθέμενης Αξίας
Ireland	21 %	13.5%, 4.8% or 0%	CBL VAT	Cain Bhreisluacha Value Added Tax
Spain	21 %	8% or 4%	IVA	Impuesto sobre el valor añadido
Italy	21 %	10%, 6%, or 4%	IVA	Imposta sul Valore Aggiunto
Cyprus	17 %	8% or 5%	ΦΠΑ	Φόρος Προστιθεμένης Αξίας
Latvia	21 %	10% since 2011 12%	PVN	Pievienotās vērtības nodoklis
Lithuania	21 %	9% or 5%	PVM	Pridėtinės vertės mokestis
Luxembourg	15 %	12%, 9%, 6%, or 3%	TVA	Taxe sur la Valeur Ajoutée
Malta	18 %	5 %	TVM	Taxxa tal-Valur Miżjud
Netherlands	19 %	6 %	BTW	Belasting over de toegevoegde waarde
Poland	23 %	8%, 5% or 0%	PTU/VAT	Podatek od towarów i usług
Portugal	23 %	13% or 6%	IVA	Imposto sobre o Valor Accrescentado
Romania	24 %	9% or 5%	TVA	Taxa pe valoarea adăugată
Slovakia	20 %	10 %	DPH	Daň z pridanej hodnoty
Slovenia	20 %	8,5 %	DDV	Davek na dodano vrednost
Finland	23 %	17% or 8%	ALV Moms	Arvonlisävero Mervärdesskatt
France	19,6 %	7% or 5.5% or 2.1%	TVA	Taxe sur la Valeur Ajoutée
Sweden	25 %	12% or 6% or 0%	Moms	Mervärdesskatt
Czech	20 %	14 %	DPH	Daň z přidané hodnoty
Estonia	20% (until July 1, 2009 - 18%),	9 %	km	käibemaks (literally "turnover tax")

Other countries

A country	Bid		Local name
	Standard	Reduced
Albania	20 %
Azerbaijan	18 %		ƏDV (Əlavə Dəyər Vergisi)
Australia	10 %	0 %	GST (Goods and Services Tax)
Argentina	21 %	10.5% or 0%
Belarus	20 %	10 %	PDV (padatak na dadadzena vartastsya)
Bosnia and Herzegovina	17 %		PDV (porez na dodatu vrijednost)
Venezuela	11 %	8 %	IVA (Impuesto al Valor Agregado)
Vietnam	10 %	5% or 0%	GTGT (Gia Tri Gia Tang)
Guyana	16 %	14 %
Georgia	18 %	0 %	დღგ (DHG)
Island	3 %	0 %	GST (Goods and Sales Tax)
Dominican Republic	6 %	12% or 0%
Iceland	24,5 %	14 %	VSK (Virðisaukaskattur)
	12,5 %	4%, 1% or 0%
Israel	16 %		Ma'am (מס ערך מוסף)
Kazakhstan	12 %		ҚҚС (kosylgan құн salygy)
Kyrgyzstan	12 %	0 %
Canada	from 5% to 13%	0 %	GST (Goods and Services Tax) / TPS (Taxe sur les produits et services)
China	17 %	2,3,4,6,13 %	增值税
Lebanon	10 %
Macedonia	18 %	5 %	DDV (Danok on Dodadena Vrednost)
Malaysia	5 %
Mexico	15 %	0 %	IVA (Impuesto al Valor Agregado)
Moldova	20 %	8% or 6% or 0%	TVA (Taxa pe Valoarea Adăugată)
New Zealand	15 %		GST (Goods and Services Tax)
Norway	25 %	14% or 8%	MVA (Merverdiavgift) (unofficial) moms)
Paraguay	10 %	5 %	IVA (Impuesto al Valor Agregado)
Peru	18 %		IGV (Impuesto General a las Ventas)
Salvador	13 %		IVA (Impuesto al Valor Agregado)
Serbia	18 %	8% or 0%	PDV (Porez na dodatu vrednost)
Singapore	5 %		GST (Goods and Services Tax)
Thailand	7 %
Trinidad and Tobago	15 %
Türkiye	18 %	8% or 1%	KDV (Katma değer vergisi)
Uzbekistan	20 %	0 %	VAT (value added tax)
Ukraine	20 %	0 %	PDV (tax for additional income)
Uruguay	23 %	14 %	IVA (Impuesto al Valor Agregado)
Philippines	12 %		RVAT (Reformed Value Added Tax) / karagdagang buwis
Croatia	22 %	0 %	PDV (Porez na dodanu vrijednost)

The cost excluding VAT for the sale of goods is indicated only in certain cases. The presence of VAT depends on whether the goods are subject to VAT and whether the seller is a payer of this tax. As a general rule, the cost of goods should be indicated including VAT. However, in some cases, the seller may indicate the price excluding VAT and not issue invoices. When the cost of goods is indicated with VAT (excluding VAT), we will consider in this article.

When the price is indicated including tax

As a general rule, when selling goods, works, or services, the seller must present the amount of tax to the buyer for payment in addition to their price (clause 1 of Article 168 of the Tax Code of the Russian Federation).

We talk in more detail about what is subject to VAT in this section.

To do this, the price of goods is multiplied by the tax rate (20 or 10%). As a result, the buyer is presented with the amount of tax in the cost of goods.

In settlement and primary documents, in invoices, the corresponding amount of tax should be highlighted as a separate line (clause 4 of Article 168 of the Tax Code of the Russian Federation).

At the same time, there are situations when the contract does not specify whether the price includes VAT or not. In order to avoid disputes with tax authorities and your partner about the final price of the contract, we advise you to pay special attention to this condition. On this issue there is an opinion of the Plenum of the Supreme Arbitration Court of the Russian Federation (clause 17 of the resolution dated May 30, 2014 No. 33). The judges indicated that if the contract does not indicate the inclusion of VAT in the price, then the amount of tax is allocated by the seller from the price established in the contract. This position is beneficial to the buyer, since he is protected from the seller’s demands to pay VAT above the agreed price. At the same time, this position is useful for the seller in case of claims from the tax authorities - VAT does not need to be paid at his own expense in excess of the contract price.

The seller is exempt from paying VAT in accordance with Art. 145 Tax Code of the Russian Federation

VAT-exempt companies can list the price of their goods excluding VAT.

Small organizations can receive VAT exemption. This category includes companies whose revenue for the 3 previous consecutive calendar months does not exceed 2 million rubles. excluding VAT. To obtain an exemption, you must submit a special notification to the tax office.

Read how to get a VAT exemption in 2019.

The seller applies a special regime

Organizations under a special regime (STS, UTII, Unified Agricultural Tax, PSN) can indicate the cost of goods sold excluding VAT. They are exempt from the obligation to calculate and pay VAT.

At the same time, if such a company nevertheless issues a VAT invoice, it will have to pay tax to the budget (clause 5 of Article 173 of the Tax Code of the Russian Federation).

Read more about VAT during simplification.

Goods, works, services not subject to VAT

The Tax Code of the Russian Federation provides for VAT benefits for certain types of goods, works, and services. For such transactions, organizations indicate the cost without VAT. The list of preferential transactions is given in Art. 149 of the Tax Code of the Russian Federation. For example, sales of:

• medical goods;
• educational services;
• passenger transportation services;
• scrap of ferrous and non-ferrous metals;
• banking operations, etc.

For more details, see the materials:

• “Transactions not subject to VAT: types and features” ;
• “What goods that are not subject to VAT are enshrined in the Tax Code?” .

Results

As a general rule, when selling goods, works, or services, the seller must present the amount of VAT to the buyer for payment in addition to their price. Only VAT non-payers, as well as persons who sell tax-free goods (work, services), are exempt from this obligation. It must be remembered that if a company that does not have to present VAT to the buyer nevertheless issues an invoice with VAT, then it will have to pay tax to the budget. This is directly stated in paragraph 5 of Art. 173 Tax Code of the Russian Federation.

I am glad to welcome you again, dear friends! Blog author Ruslan Miftakhov is in touch. I think that today almost everyone has heard, and even personally encountered, when making purchases in stores, with such an abbreviation as “VAT”.

But not everyone understands what these letters mean and where they come from. That's why I decided to explain what VAT is in simple words. At the end of the article you will find a cool video about a mother with a computer, watch it, you won’t regret it :)

This article will be useful and interesting both to ordinary people who are interested in this tax, and to those who already have or are planning to start their own business in the future in order to understand how to work with it. Let's get started.

So, value added tax (VAT explanation) is a fee paid by organizations that create an additional, additional market price for a product or service.

It is a small portion of the added value that arises from the difference between the revenue that the selling company received after selling goods or services and the amount of costs that it incurred to purchase specific raw materials, supplies, or products.

At the same time, this organization can produce products from purchased raw materials, or simply resell the goods, naturally at a higher price.

Value added tax appeared about a hundred years ago, replacing a sales tax paid on all revenue. However, in Russia it began to operate in 1992.

Why is it needed? The answer to this question is quite simple: today VAT is the main source of formation of the state budget, and the calculation of its final value (which we will consider in more detail a little later) frees organizations from double payment of fees to the budget.

What is the value of this bet?

According to Russian legislation, VAT is calculated at three percentage rates:

1. Zero means that this fee is not charged on all products produced for export (gas, oil, precious metals, space industry).
2. 10% - refers to the so-called preferential categories of goods: essential goods, socially significant (children's goods, medications, a number of food products).
3. 18% is the most common rate, applicable to most goods and services (everything not included in the first two points).

Who pays it?

I wonder who really pays this tax, for whom is this tax burden? Of course, enterprises do this directly. But the statement that this burden falls only on business is incorrect.

Who pays for the product when it goes to retail?

That's right - the buyer, that means you and me. The company submits declarations to the tax office, and ultimately the buyer pays a higher price, increased by the amount of this fee, thereby indirectly reimbursing the costs incurred by the seller.

Let's take a closer look at the essence of value added tax by considering the logical chain of its definition:

1. When one company buys materials, components, or simply finished goods from another, it pays them to the supplier, taking into account VAT included in their price.
2. Then, when the future price of the product is determined, the cost includes the cost of previously purchased products (materials), reduced by the amount of tax (paid in the first point). This deductible amount of the fee is recorded as a tax credit, or, in other words, it is input VAT, an amount to be deducted in the future.
3. When determining the final selling price of a product (taking into account the cost, desired profit, excise taxes) to the final buyer, VAT is added to the final price (this is what you and I pay, as buyers).
4. Then, 18% is calculated from the revenue received for the product (the rates were discussed above), and a value called the tax liability is obtained.
5. As a result, the company must pay the state an amount equal to the difference between the obligation (point 4) and the tax credit (point 2).

To make it even clearer, let's look at the calculation of this tax using a simple example:

The company bought doors from the manufacturer for the amount of 10,000 rubles. The amount of input VAT paid to the manufacturer will be equal to: 10,000 * 18% = 1,800 rubles.

Then this company sold the doors to customers in the store at a new price, taking into account its profit, and received revenue equal to 20,000 rubles. The amount of the obligation will be: 20,000 * 18% = 3,600 rubles.

Thus, this organization must pay the state: 3,600 – 1,800 = 1,800 rubles. Agree, it is not as difficult to understand as it seems.

Features of tax deduction

All companies are required to submit reporting – a tax return – every quarter, and no later than the established deadline (before the 25th of the next month). In case of delays, you will have to pay fines and penalties.

To fill out the quarterly report and to determine the amount that needs to be paid to the budget, as mentioned above, determine:

• tax base (all company revenue);
• tax deduction (or tax credit);
• the amount of tax to be reimbursed.

Tax deductions reduce the amount paid to the budget, since they have already been paid to the supplier. But they are accepted for deduction only if the following conditions are met:

1. All purchased products for sale are subject to this fee.
2. The organization has all correctly filled out primary documents (delivery notes for products) and invoices (these are provided by the supplier, from whom you need to require them to fill them out correctly).
3. All products have passed accounting records in this company.

We’ve cleared up the deductions, now let’s figure out what the concept of VAT for reimbursement means.

As we have already said, the amount that needs to be paid to the state is found by subtracting the deduction amount from the tax liability. So, if for a given quarter (by the way, there are 4 quarters in a year, as well as the season of the year) the amount of deduction is higher than the calculated tax, this will mean that this organization has actually overpaid the tax.

And therefore, she will have the right to reimburse this overpayment from the budget by submitting the appropriate declaration. After the inspection verifies the correctness of all calculations and documents, a decision will be made to reimburse the overpaid tax.

Funny video of a typical mom at the computer

I suggest taking a little break from such a boring topic of taxation and watching a cool video to cheer you up :) Reminds me of my mother in some way when you try to explain something to her on a computer or smartphone =))

This concludes today's article. Have you managed to deal with this, as it seems at first glance, difficult collection and burden? I hope so. I will also be waiting for your feedback, comments, and ratings. Thank you all and see you again!

Best regards, Ruslan Miftakhov

When anyone, even an experienced accountant, hears the word “VAT,” there is a certain trepidation. And there are objective reasons for this, because this is one of the most complex taxes, the calculation and payment of which is regulated by multiple regulatory documents. Let's try to understand the basics of VAT today.

Value added tax is indirect, for the reason that its actual payer is the final consumer. To put it very simply, the end result is that VAT is imposed on ordinary consumers who purchase goods in a store or order any services or work. Let's figure out how this happens?

VAT represents “added” value or, even more simply, a markup in the percentage established by law on goods produced, services provided and work performed. Moreover, the “added” value increases at each stage.

A good example

To understand the “intricacies” of this insidious tax, you need to understand for yourself its mechanism and its meaning.

In order to imagine the whole chain, let’s look at this point using a specific example. To do this, we will trace all stages of production and subsequent sale, for example, of shampoo.

The first stage is the enterprise that supplies raw materials for the cosmetics production plant, i.e. When selling raw materials, the first “added” value was formed, which the manufacturer included in the selling price. Next, the cosmetics manufacturing plant produced the shampoo, packaged it, and sold it to a retailer. Now the price of the product is made up of the cost of purchased raw materials, costs and a percentage of the planned profit of the plant and VAT, which was added by production for “its” part in the price.

Naturally, the trading company marked up the shampoo and also added VAT on it. And now the shampoo has hit the sales counter, the consumer has bought it and paid the cost, including VAT at all stages. Each of the participants in this chain paid their part of the VAT to the budget, and reimbursed it by including it in the sales price.

Now let’s present this same illustrative example, in numbers, and assume that:

• The cost of raw materials is 118 rubles (in this cost, VAT at a rate of 18% is 18 rubles);
• The selling price of shampoo at the factory for a trading enterprise is 236 rubles (in this cost, VAT at the rate of 18% is 36 rubles);
• The selling price of shampoo in a trading enterprise is 302 rubles (of this price, VAT at the rate of 18% is 46 rubles).

Being the primary source, the manufacturer of raw materials for shampoo will pay VAT to the budget in the amount of 18 rubles on the entire sales amount. A cosmetics production plant will already be able to deduct the amount of “input” VAT on raw materials of 18 rubles, which means that VAT will be payable (36 - 18) = 18 rubles. Now a trading enterprise, it will accept for deduction the amount of VAT in the amount of 36 rubles presented by the cosmetic factory in the VAT invoice, and accordingly, will pay 10 rubles (46 - 36) to the budget.

And now, according to the theory presented above, by paying VAT by each participant in the chain, we should get the amount of this tax in the final price of the product.

The amount of VAT in the final price of the product is 46 rubles = 18 rubles (supplier of raw materials) + 18 rubles (cosmetic factory) + 10 rubles (trading enterprise).

We have dealt with the essence of this tax, and now with a full understanding of the matter we can move on to the aspects of the legislation that regulate its payment.

Payers and object of taxation

VAT payers are organizations and entrepreneurs who have chosen the OSNO form of taxation. The object of accrual of this tax is the following operations in accordance with the norms of Article 146 of the Tax Code of the Russian Federation:

• Sale of works, goods and services, collateral and transfer of property rights on the territory of the Russian Federation;
• Transfer of works, goods and services for own needs on the territory of the Russian Federation;
• Construction and installation work carried out for one’s own needs;
• Import of goods into the territory of the Russian Federation.

In case of import of goods, VAT payers become entrepreneurs and organizations that apply other forms of taxation, except for OSNO.

VAT rates

VAT rates are regulated by . There are three bets in total:

• 18% is the largest amount and is set for most tax objects;
• 10% - this rate applies to the bulk of food products, as well as children's products;
• 0% - this rate is applied by exporters who have documented the fact of an export transaction by submitting the necessary set of documents to the tax authorities.

Deductions

When calculating tax, the tax base is the entire amount of revenue, but we remember the principle of this tax, which is the added value generated at each stage. So, in order for the VAT payer to transfer exactly his “added” value to the budget, there is a deduction.

The deduction is the amount of “input” VAT, i.e. VAT paid by you on the purchase of services, goods and works in the course of your business activities. Dedicated to deductions.

Let's return to our example with milk. For a dairy plant, the amount of “input” VAT is the VAT on raw materials from the agricultural enterprise. Those. Taking your revenue for a sold product as a tax base and calculating VAT on it, the amount of VAT paid on the purchase of raw materials will be deducted. Thus, VAT will be payable only on that part of the revenue that was generated at the plant itself. The same thing will happen in a trading enterprise: having charged VAT on the proceeds for sold milk, it will deduct the VAT amount of the dairy plant, and, accordingly, only the VAT amount from the trade margin will have to be paid.

Payment procedure

The timing and frequency of VAT payment are established by Article 174 of the Tax Code of the Russian Federation. The reporting period is a quarter and transfers to the budget of this tax must be made no later than the 20th day of the month that immediately follows the previous quarter. For the first quarter of the year it is April 20, for the second - July 20, for the third - October 20, and for the fourth - January 20 of the next calendar year.

VAT refund

There is also a situation when the amount of calculated VAT is less than the amount of VAT to be deducted. In this case, you are entitled to compensation for the resulting difference. To do this, you need to submit a declaration to the tax authorities in the prescribed form, undergo a desk audit, and if as a result the amount to be refunded is confirmed, then you will be returned to the current account eligible for VAT refund.

The procedure for implementing VAT refunds is regulated.

13Jul

What is VAT

VAT ( Value added tax) - This a type of tax on the consumption of goods and services, in which at each stage of production a mark-up is added in the amount of the VAT rate established in the state.

What is VAT in simple words (explained).

In simple words, VAT is a special form of indirect tax, in which at each stage of production of a product, at the time of its sale, a tax margin is added to its cost until sale to the final consumer. Despite the ornateness of this definition, the essence of VAT is a tax on the direct consumption of goods or services. In turn, this means that no matter how complex and confusing such a tax system may be at first glance, in the end this tax will be paid mainly by the end consumer. In other words, we can say that VAT is the markup that the state receives on almost every item or service sold to the end consumer.

In fact, what an ordinary person (individual, consumer) needs to know about VAT:

• Despite the fact that the definition indicates the addition of a markup at each stage of sales, this does not mean that the final cost of the product will increase depending on the number of such markups. As a result, the price, without taking into account the cost of the product and the manufacturer’s income, will increase only by the amount of the VAT interest rate established by the state. This is due to the VAT compensation system for all taxpayers with the exception of the end consumer.
• The VAT rate is directly relevant to ordinary consumers, since they are the ones who will ultimately pay this tax at the time of purchasing a product or service.
• VAT rates vary depending on the group of goods or services. For example, the rate for medical drugs may be lower than for luxury products. On products that the country exports, as a rule, the VAT rate is 0%.

Why is VAT needed and who pays it?

If you understand why VAT is needed in general, then you should note the important fact that this particular tax plays a very important role in filling the budget of a particular country. And this is very logical, since every day millions of sales or resale transactions are carried out, from which the state receives taxes. In addition, such a tax system allows you to receive taxes from the manufacturer without waiting for the actual sale of the finished product to the final consumer.

Regarding who directly pays VAT ( physically transfers money to the state treasury) and deals with all accounting operations, then these are mainly: Legal entities and Individuals ( individual) entrepreneurs. The end consumer does not need to pay these fees on their own, since they are already included in the final price of the product. Nevertheless, the check indicates in a separate column the amount of maximum allowance that will be paid to the budget for this purchase.

How VAT works

The best option for a general understanding of how VAT works is a simple example:

1. Let's say we have a factory for sewing jeans, and our VAT rate is 20%;
2. In order to sew a pair of jeans, we need to buy material from the manufacturer;
3. Manufacturer of fabric, sells it for 100 USD. but, when selling, in accordance with tax legislation, he must add 20% VAT, in the end we actually buy it for 120 USD;
4. Having purchased fabric including VAT and following all formalities, we have the right to compensation for this tax from the budget. Ideally, the state returns this money to us ( compensation schemes may be different, depending on the legislation of a particular country);
5. We then make jeans from this fabric. Taking into account the cost and our earnings, we form an acceptable price for us at 200 USD. But now we, as entrepreneurs, are subject to the tax law and are forced to include a 20% MDV in the price when selling our jeans. As a result, we sell them for 240 USD. We keep 200 for ourselves, and send 40 to the country’s budget;
6. The buyer who purchased jeans for 240 USD is a private individual and will use them for their intended purpose without reselling them. Thus, he does not need to deduct anything to the tax office, since we did it instead, including the maximum permissible value in the final price of the product.
7. As a result, the consumer paid the tax, and the producers received a VAT refund. Such a production chain may be much longer, but the essence of the scheme will remain the same.

Value added tax in reality.

It should be noted that everything described above quite often works well only on paper. In reality, the operation of this scheme and price formation may differ depending on legislation or other factors. So, for example, the simplest error in an invoice can lead to the fact that the manufacturer is not compensated for VAT. In turn, this trouble can lead to the fact that the manufacturer simply includes its losses in the cost of production. As a result, the final cost of the product will increase.