What is it?

As you know, the transfer of something for the company’s own needs is subject to VAT. This is often understood as any transfer of values ​​from one structural division of a company to another. Is this correct?

The Tax Code states that “the transfer of goods on the territory of the Russian Federation (performance of work, provision of services) for one’s own needs, the costs of which are not deductible (including through depreciation deductions) when calculating corporate income tax” is subject to VAT ( subparagraph 2 of Article 146 of the Tax Code of the Russian Federation). However, in practice, this formulation raises many questions, first of all, what kind of operations correspond to the term “transfer for one’s own needs.” The answers to these questions are in our article.

What is meant by the term?

The Tax Code does not define this term. There is no such definition in the documents of the departments - the Ministry of Finance and the Federal Tax Service of Russia. However, after analyzing the official explanations of officials, we can determine the conditions under which the operations performed by the company can be qualified as “transfer of goods (performance of work, provision of services) for its own needs,” and such transfer is subject to VAT. There are two main conditions, and they must be met simultaneously.

Condition one: there was an actual transfer of goods (performance of work, provision of services) between the structural divisions of the company. This conclusion follows, in particular, from letters of the Ministry of Taxes and Taxes of Russia dated January 21, 2003 No. 03-1-08/204/26-B088 and the Ministry of Finance of Russia dated June 16, 2005 No. 03-04-11/132.

Condition two: expenses for the acquisition (manufacturing) of transferred goods (works, services) do not reduce the company’s taxable profit. This conclusion follows directly from the wording given in subparagraph 2 of Article 146 of the Tax Code of the Russian Federation. If at least one of these conditions is not met, do not charge VAT.

Based on the results of audits, several main situations can be identified when the accounting department has a question about whether it is necessary to pay VAT in this case. These are the situations:

– property is transferred from the production to the non-production division of the company;

– property is transferred from one production unit of the company to another;

– there was no transfer of property between the company’s structural divisions, but the costs of purchasing this property are not taken into account when taxing profits.

Let us consider in detail how to resolve the issue of paying VAT in each of these cases.

Transfer from production to non-production division

To decide whether it is necessary to pay VAT when transferring goods (performing work, providing services) to a non-production division of a company, it is necessary to determine how these expenses will be taken into account for tax purposes. The answer to this question will depend, in particular, on the sources from which this non-production division is financed.

Example 1

The paint and varnish plant sells its own products – varnishes and paints for repair work. By decision of the production director, in the first quarter of 2008, 20 cans of paint were transferred for repairs at the recreation center, which is on the balance sheet of the plant.

Option 1

By decision of the founders of the plant, the recreation center is financed from the net profit remaining at the disposal of the company after taxation. The plant's employees rest at the base for free. The recreation center does not conduct any income-generating activities.

Since in this case the activities of the recreation center are not aimed at generating income, the company’s costs for the production of transferred paint cannot be taken into account when calculating income tax (since these costs do not meet the expense criteria established in paragraph 1 of Article 252 of the Tax Code of the Russian Federation, they cannot be recognized as economically feasible). Therefore, the transfer of paint is subject to VAT.

Option 2

The recreation center is financed from the income it receives itself. Both company employees and third-party tourists rest at the base for a fee.

In this case, the activities of the recreation center are aimed at generating income. Consequently, the company's costs for the production of the transferred paint are taken into account when calculating income tax. And if so, the transfer of paint is not subject to VAT.

Please note: if goods (work is performed, services are provided) listed in paragraph 2 of Article 149 of the Tax Code of the Russian Federation are transferred to a structural unit of the company, VAT does not need to be paid. This is directly stated in the same paragraph of the code. Moreover, in this situation, the procedure for financing a structural unit no longer matters.

Example 2

The company is engaged in the production of medical equipment,

in particular tonometers. Tonometers are included in the List of the most important and vital medical equipment, the sale of which in Russia is not subject to VAT (approved by Decree of the Government of the Russian Federation of January 17, 2002 No. 19). In the All-Russian Product Classifier, tonometers are assigned code 94 4130, which is included in the group of medical equipment under code 94 4100 “Measuring devices for functional diagnostics.” When selling tonometers, the company uses VAT exemption in accordance withwith subparagraph 1 of paragraph 2 of Article 149 of the Tax Code of the Russian Federation.

By decision of the production director in the first quarter of 200810 tonometers were donated to a recreation center locatedon the company's balance sheet. In this case, the transfer of tonometers is not subject to VAT. Moreover, regardless of whether or not the taxable profit of the enterprise is reduced by the costs of maintaining the recreation center. The basis is paragraph 2 of Article 149 of the Tax Code of the Russian Federation.

Transfer from one productiondivisions to another

In this case, as a rule, there are no grounds for charging VAT in accordance with subparagraph 2 of paragraph 1 of Article 146 of the Tax Code of the Russian Federation (when transferring for one’s own needs). Of course, provided that the company’s expenses for the acquisition (production) of transferred goods (works, services) reduce its taxable profit.

Example 3

The woodworking plant sells its own products - furniture and interior doors. By decision of the production director, in the first quarter of 2008, three furniture sets manufactured by the plant were transferred to the company’s trading division for the design of a sample room. Subsequently, after conducting an inventory, it was decided to write off these products because they had lost their consumer qualities.

Expenses for participation in exhibitions, fairs, expositions,for the design of shop windows, sales exhibitions, sample rooms and showrooms are classified as advertising expenses and are included in other expenses associated with production and sales (clause 4 of Article 264 of the Tax Code of the Russian Federation).

Thus, if the finished product is transferred to decorate the sample room, its cost is taken into account when taxing profits. This means that there is no need to charge VAT when transferring such products.

Let’s assume that the cost of one furniture set is50,000 rub. The working Chart of Accounts of the plant (approved as an annex to the accounting policy) stipulates that, in particular, the following sub-accounts are opened for account 43 “Finished Products”:

– “Finished products in warehouse”;

– “Finished products in the sample room.”

Then the plant’s accounting department should reflect the corresponding transactions as follows:

DEBIT 43 subaccount “Finished products in the sample room” CREDIT 43 subaccount “Finished products in the warehouse”

– 150,000 rub. (RUB 50,000 x 3 pcs.) – finished products are transferred to the sample room;

DEBIT 44 CREDIT 43 subaccount “Finished products in the sample room”

– 150,000 rub. – the cost of finished products is written off as advertising expenses of the plant.

Accountants often ask the following question: is it necessary to charge VAT on the cost of surplus materials identified during inventory and transferred for production purposes to another division of the company? We answer: no, it’s not necessary.

The fact is that the value of surpluses identified during inventory is taken into account when taxing profits. True, expenses do not include their entire cost, but only part of it (clause 2 of Article 254 of the Tax Code of the Russian Federation). It is calculated as follows: the amount of non-operating income that was reflected in tax accounting when capitalizing the surplus is multiplied by the income tax rate (24%). The result obtained is the amount that can be taken into account in tax expenses.

Thus, there is no need to charge VAT on the transfer of surplus. A similar point of view is reflected in the letter of the Ministry of Finance of Russia dated September 1, 2005 No. 03-04-11/218.

If there is no transmission

If there is no fact of transfer, there are no grounds for charging VAT in accordance with subparagraph 2 of paragraph 1 of Article 146 of the Tax Code of the Russian Federation. Even if the purchase price does not reduce the company’s taxable profit.

The transfer of goods for your own needs is subject to VAT if they are transferred to your structural unit in the Russian Federation and the costs for them are not taken into account in income tax expenses. Calculate the VAT amount as the product of the tax base and the tax rate. In this case, determine the base on the day of transfer of goods. When transferring goods for your own needs, prepare an invoice in one copy and register it in the sales book. “Input” VAT on goods for your own needs is deductible in the general manner.

What is the transfer of goods for one’s own needs for VAT purposes?

The transfer of goods for one’s own needs for VAT purposes refers to situations where the following conditions are simultaneously met:

• you transferred goods between your structural divisions. If the goods are received and registered immediately by the division, then transfer for its own needs does not occur;
• You formalized the transfer of goods with primary documents (for example, an invoice for internal movement between departments (Form N TORG-13), a demand invoice (Form N M-11));
• the goods are transferred to the division for final consumption, which is not associated with the further production and sale of goods (work, services).

The transferred goods can be received either from third parties or produced by you yourself.

This conclusion can be drawn from the analysis of paragraphs. 2 p. 1 art. 146 of the Tax Code of the Russian Federation, Letters of the Ministry of Finance of Russia dated June 16, 2005 N 03-04-11/132, Resolutions of the FAS Volga District dated May 22, 2018 N F06-33390/2018, FAS Moscow District dated July 21, 2014 N F05-9599/2011, dated 05/22/2013 N A40-84838/12-108-102.

An example of the transfer of goods for the organization’s own needs

On the balance sheet of the Alpha organization there is a recreation center (a separate division). Employees of the organization rest there for free. The recreation center is maintained at the expense of the organization.

The Alpha organization is engaged in the production and sale of food products. The organization transfers part of the produced products to the recreation center for free meals for vacationing workers.

The organization also regularly purchases household equipment and household goods from the Beta organization. These goods are transferred to the recreation center to support its activities.

Thus, the transfer of food, household equipment and household goods to the recreation center is a transfer of goods for the own needs of the Alpha organization.

When the transfer of goods for own needs is subject to VAT

The transfer of goods for one’s own needs is subject to VAT if the following conditions are simultaneously met (clause 2, clause 1, article 146 of the Tax Code of the Russian Federation):

• you transferred the goods on the territory of the Russian Federation, that is, when the transmitting and receiving structural units are located in the Russian Federation;
• costs of transferred goods cannot be taken into account as income tax expenses.

There is no need to impose VAT on the transfer of goods for your own needs if you could have included the costs of them in income tax expenses, but did not do so (Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated June 19, 2012 N 75/12);

• the transfer of such goods is not exempt from VAT under clause 2 or clause 3 of Art. 149 of the Tax Code of the Russian Federation.

Calculate the amount of VAT on the transfer of goods for your own needs as the product of the tax base and the tax rate (clause 1 of Article 166 of the Tax Code of the Russian Federation).

Tax base in this case, is the cost of the transferred goods, which is equal to (clause 1 of article 159 of the Tax Code of the Russian Federation):

• the price at which you sold identical or similar goods in the previous quarter (if there were no sales of identical ones);
• market price, if in the last quarter you did not sell identical and similar goods to third parties.

As the market price, you can take the price at which you sold similar goods to other non-interdependent persons (clause 3 of Article 105.7 of the Tax Code of the Russian Federation).

If you have not had such transactions, use prices for similar property from any open sources.

In both cases, include excise taxes in the price (for excisable goods) and do not take into account VAT (clause 1 of Article 154, clause 1 of Article 159 of the Tax Code of the Russian Federation).

Determine the tax base and charge VAT on the day of transfer of goods with which the primary documents were drawn up (clause 11 of Article 167 of the Tax Code of the Russian Federation).

Bid when calculating VAT, use depending on the type of goods transferred: 10% or 18% (clauses 2, 3 of Article 164 of the Tax Code of the Russian Federation).

Invoice for transfer of goods for own needs

When transferring goods for your own needs, you need to draw up an invoice in one copy, taking into account the following features (clause 1, clause 3, article 169 of the Tax Code of the Russian Federation).

In lines 2, 2a and 2b (name, address, TIN and KPP of the seller) and lines 6, 6a and 6b (name, address, TIN and KPP of the buyer) indicate information about the same person - your organization (p.p. “c” - “e”, “i” - “l” of the Rules for filling out an invoice).

In practice, it is sometimes suggested to put dashes in lines 6, 6a and 6b instead of the data of your organization.

Register the invoice in the sales book in the period in which the day of transfer of goods falls (clause 11, article 167 of the Tax Code of the Russian Federation, clause 3 of the Rules for maintaining the sales book).

VAT deduction when transferring goods for your own needs

“Input” VAT on goods that you transferred for your own needs can be deducted if the following conditions are met (clause 2, clause 1, article 146, clause 1, clause 2, article 171, clause 1, article 172 of the Tax Code RF, Letter of the Ministry of Finance of Russia dated 09/04/2015 N 03-03-06/51162):

• transfer of goods for own needs is subject to VAT;
• the goods have been accepted by you for accounting;
• you have a properly executed invoice.

For accounting purposes, the cost of finished products (concrete) transferred for one’s own needs (in your case, for concreting a service area) is recognized as an expense for ordinary activities (clauses 5, 7 of PBU 10/99 “Organization expenses”, approved . by order of the Ministry of Finance of Russia dated May 6, 1999 No. 33n). At the same time, an entry is generated in accounting (see Instructions for using the Chart of Accounts for accounting financial and economic activities of organizations, approved by order of the Ministry of Finance of Russia dated October 31, 2000 No. 94n):

Debit of cost accounting accounts Credit 43 - reflects the transfer of finished products for the needs of own production.

To document this operation, in our opinion, you can use the primary document “Demand-invoice” (for example, in form No. M-11, provided for by Decree of the State Statistics Committee of Russia dated October 30, 1997 No. 71a).

Income tax

For profit tax purposes, your organization has the right to take into account the cost of concrete (finished products) used for concreting the service area as material expenses as part of costs associated with production and sales (clause 4 of article 252, clause 1 of clause 2 of article . 253, paragraph 2, paragraph 1, paragraph 4 of Article 254 of the Tax Code of the Russian Federation), or as other expenses associated with production and sales (paragraph 4 of paragraph 2 of Article 253 of the Tax Code of the Russian Federation).

VAT

When transferring concrete for concreting a service area, the organization does not have an object of VAT taxation provided for by subparagraph 2 of paragraph 1 of Article 146 of the Tax Code of the Russian Federation.

You can get detailed information about accounting for finished products in "1C: Accounting 8" in the "Directory of Business Operations. 1C: Accounting 8" section "Accounting and Tax Accounting" in IS ITS

The ITS information system is updated every day and contains ready-made advice on accounting, tax and personnel records. It is quite possible that the answers to the specific practical questions that you are currently looking for are already in the section

TATYANA IVCHENKO, auditor, tax consultant, general director of 000 "Audit-Expert"

With the help of amendments to legislation and decisions of arbitration courts, previously rather controversial issues of accounting for operations on construction and installation work for one’s own consumption have become much more logical and clearer.

Tax legislation does not contain a definition of “construction and construction work for own consumption”. By virtue of paragraph 1 of Art. 11 of the Tax Code of the Russian Federation, one should be guided by the definitions contained in the regulations of Rosstat (see Letters of the Ministry of Taxes of the Russian Federation dated March 24, 2004 No. 03-1-08/819/16, Federal Tax Service for Moscow dated January 31, 2007 No. 19-11/8073 and dated 02/25/05 No. 19-11/11713).

Correct Qualification

In accordance with the Decree of the State Statistics Committee of Russia dated December 24, 2002 No. 224, Rosstat dated December 16, 2005 No. 101 and Rosstat Order dated November 12, 2008 No. 278, for construction and installation work (including installation and adjustment of equipment necessary for the operation of buildings, for example installation and installation of equipment for heating, ventilation, elevators, electrical, gas and water supply systems, etc.), performed in an economic way, includes work carried out for its own needs, by the organization’s own resources, including work for which the organization allocates construction funds workers of the main activity with the payment of wages to them according to construction orders, as well as work performed by construction organizations for their own construction (not under contract agreements, but, for example, during the reconstruction of their own office, the construction of their own production base, a warehouse for storing building materials, etc.) p.).

When carrying out construction and installation work in an economic way, the manufacturer and customer of construction work are the same legal entity. To carry out construction and installation work by an organization that is not a construction contractor, it is necessary to carry out a number of rather costly preparatory measures. Before starting construction using an economic method, you need to create your own production base, purchase or rent construction machines and mechanisms, tools and equipment, etc. In addition, the structure of the enterprise must provide a special unit that will directly deal with construction, hire the necessary specialists with payment of wages according to construction orders, have a license for the right to carry out the relevant construction and installation works (Resolution of the Federal Antimonopoly Service dated April 25, 2007 No. A57-11919/06-6). Since 2010, it is necessary to be a member of the relevant SRO, having paid membership fees, entrance fees and contributions to the compensation fund.

Moreover, from para. 3 clause 22 of Rosstat Resolution No. 2 and from decisions of a number of arbitration courts (for example, Resolution of the Federal Antimonopoly Service of the West Siberian District dated April 30, 2008 No. Ф04-2723/2008(4424-А0З-41) in case No. А0З-6547/2007-14 ) it follows that if, during construction using an economic method, individual works are performed by contractors, then the cost of these works is not included in the cost of construction and installation work for own consumption. It is also necessary to separate construction and installation work from equipment installation. Construction and installation work is of a capital nature; its result is either the creation of a new fixed asset, including real estate, or an increase in the initial cost of an existing object. If during installation work there are no construction elements, then the accounting of the work is carried out according to other rules.

A fixed asset can be built for own consumption in three ways:

Contractor (if the work is carried out by third-party contractors);

Economic (if the company carries out construction independently);

In a mixed way.

In accounting, the initial cost of fixed assets built by any of these methods is the sum of all the costs of their construction and commissioning (costs of purchasing materials, purchasing and installing equipment, paying workers, etc.).

The same rule applies in tax accounting, but only under one condition - construction is carried out by contract (Clause 1, Article 257 of the Tax Code of the Russian Federation).

After the work is completed, an act is drawn up indicating the estimated cost of construction.

If an organization enters into an agreement with a customer-developer for the investment of a real estate property being built for it, then accounting is carried out in accordance with Federal Law No. 39-FZ dated February 25, 1999 (as amended on July 24, 2007).

Funds for construction financing, transferred in accordance with the terms of agreements concluded with developers, are taken into account by investors as a debit to account 76 in a subaccount specially opened for this purpose. These funds are thus taken into account throughout the entire construction. Upon completion of construction, after receiving, in accordance with the established procedure, documents from the developer confirming the costs incurred during the construction process and the amount of value added tax paid, investors take into account the cost of construction of the received share using the following entries:

The actual construction costs in terms of the share transferred by the developer to the investor may differ from the amount of the investment contribution.

If construction costs are greater than the amount of the investment contribution according to the estimate, then the parties must determine at whose expense the difference will be covered. If the developer covers the difference, he can do this at his own expense, without taking them into account for tax purposes. If the customer is a customer, then you can agree on an addition to the estimate and take into account additional costs also as part of invoice 08.

If construction costs are less than the amount of the investment contribution, then the resulting difference is either returned to the investor or remains at the disposal of the developer as his income on the basis of an appropriate agreement between the parties to the contract.

After registering the ownership of the received share in the construction project, this share is included in the organization’s fixed assets.

With the economic method, the company carries out construction work independently (that is, without involving third-party contractors). In this case, all costs associated with construction (cost of building materials, depreciation of fixed assets used for construction, wages of workers, etc.) are also recorded as the debit of account 08.

This is reflected in accounting as follows:

Dt08-3 – Kt10 (02,70,69...) - reflects the costs of construction work performed on our own.

The cost of construction and installation work for the organization's own consumption is subject to VAT. In this case, the amount of tax accrued when performing work is subject to deduction.

For income tax purposes, the share received by the investor upon completion of construction, from the moment of filing documents for state registration, is included in fixed assets (depreciable property) at the actual cost of construction.

The amount of VAT received from the developer under a consolidated invoice can be taken as a tax deduction in accordance with clause 6 of Art. 171 Tax Code of the Russian Federation.

In tax accounting, the initial cost of constructed, manufactured fixed assets is determined by:

As the sum of all actual costs associated with the construction and production of an object, with the exception of VAT and excise taxes (clause 1 of Article 257 of the Tax Code of the Russian Federation). This refers to the situation when an organization initially creates (builds) an object of fixed assets for its own needs;

As the cost of finished products, if the organization decides to use part of the produced fixed assets for its own needs (clause 2 of Article 319 of the Tax Code of the Russian Federation). This refers to a situation where an organization produces fixed assets as part of marketable products and, for example, decides to keep some objects for its own consumption.

In conclusion, it should be noted that fixed assets, the rights to which are subject to state registration in accordance with the legislation of the Russian Federation, are included in the corresponding depreciation group from the moment of the documented fact of filing documents for registration of these rights (clause 11 of Article 258 of the Tax Code of the Russian Federation).

Depreciation for tax purposes is accrued from the 1st day of the month following the month the fixed asset was put into operation.

VAT

In accordance with sub. 3 p. 1 art. 146 of the Tax Code of the Russian Federation, construction and installation work performed for one’s own consumption is subject to VAT. Until 2009, VAT on construction and installation work performed for one’s own consumption was deducted as VAT was paid to the budget, that is, in the next quarter.

Starting with the submission of the VAT return for the first tax period of 2009, in accordance with clause 9 of Art. 2 of Federal Law No. 224-FZ dated November 26, 2008, it reflects both the amounts of tax calculated when performing construction and installation work for one’s own consumption, and the amounts of this tax subject to deduction. The Federal Tax Service of the Russian Federation also stated this in Letter No. ШС-22-3/216@ dated March 23, 2009 (agreed with the Ministry of Finance of the Russian Federation).

In accordance with the standards set out in paragraph 4 of Art. 166 of the Tax Code of the Russian Federation, the total amount of tax is calculated based on the results of each tax period in relation to all transactions recognized as an object of taxation in accordance with subparagraph. 1 -3 p. 1 tbsp. 146 of the Tax Code of the Russian Federation, the moment of determining the tax base of which, established by Art. 167 of the Tax Code of the Russian Federation, refers to the corresponding tax period, taking into account all changes that increase or decrease the tax base in the corresponding tax period.

According to paragraph 10 of Art. 167 of the Tax Code of the Russian Federation, the moment for determining the tax base when performing construction and installation work for one’s own consumption is the last date of each tax period.

Consequently, the accrual of VAT payable on construction and installation works for one’s own consumption and the deduction of these amounts will be carried out in the same tax period.

Amounts of VAT not accepted for deduction, which are calculated by the taxpayer for construction and installation work for his own consumption, carried out in the period from 01.01.06 to 01.01.09, are accepted for deduction in the previously valid procedure (clause 13 of article 9 of the Federal Law). That is, if the organization did not have time to deduct the VAT accrued on the cost of construction and installation work in the period from 01/01/06 to 01/01/09, then it must be paid to the budget, and only then can it be accepted for deduction. In the general case (if no errors were made when calculating the tax base and you transferred VAT to the budget on time), this provision applies only to amounts accrued for construction and installation work performed in the fourth quarter of 2008.

Therefore, for example, the amount of VAT accrued in December 2008 could be deducted only in the 1st quarter of 2009 (after paying VAT to the budget on the declaration for the 4th quarter of 2008). Accordingly, the second copy of the invoice, issued in December 2008, must be registered in the purchase book only after the tax has been paid to the budget.

When deciding on the legality of the tax authority’s refusal to deduct the VAT amounts paid to the contractor for construction and finishing work, the lower courts were guided by the provisions of paragraph 1 of Art. 166, para. 1 and 2 clauses 6 art. 171, paragraph 5 of Art. 172, art. 173, para. 1 item 2 art. 259 of the Tax Code of the Russian Federation.

Based on para. 3 paragraph 6 art. 171 of the Tax Code of the Russian Federation, concerning tax deductions when performing construction and installation works for one’s own consumption, the courts considered that the company did not have the right to deduct VAT, since Art. 171 of the Code makes this right dependent on the right to include the cost of completed construction and finishing work as expenses when calculating income tax. In other words, the courts classified the taxpayer’s expenses for paying for construction and finishing work performed by contractors as construction and installation work for their own consumption and indicated that since the company (taxpayer) does not have ownership of the property, its expenses for the production of inseparable capital improvements into this property (subsequently rented) cannot be taken into account as expenses for income tax purposes, and therefore it cannot be granted the right to a tax deduction for VAT.

However, the Supreme Arbitration Court of the Russian Federation did not agree with this logic and recognized the taxpayer’s right to deduct VAT, regardless of whether there was a civil legal formalization of relations for the production of inseparable improvements within the framework of a lease agreement for real estate. In the absence of the subject of the real estate lease agreement, the consent of the lessor cannot legally take place. Probably, this position of the Supreme Arbitration Court of the Russian Federation regarding the legality of deducting “input” VAT in relation to inseparable improvements, consent to which is given by a person who is not the lessor of the real estate object (before its state registration), can also be extended to justify the right to deduction when lack of landlord's consent.

The contracting method involves the involvement of construction companies from outside. It is clear that in this situation the organization will pay VAT as part of the payment for the contractor’s services. He will have to pay the budget for this tax. The customer will receive the opportunity to deduct in accordance with clause 6 of Art. 171 of the Tax Code of the Russian Federation. Note that in no other context is contract construction mentioned in Chapter 21 of the Code.

The situation is not so clear with regard to the taxation of construction and installation works when they are carried out in a mixed way. There is no concept of “mixed method” for VAT in the Tax Code of the Russian Federation at all. Because of this omission, two years ago the Ministry of Finance of the Russian Federation issued very unfavorable explanations for payers on how to calculate VAT in this case. According to financiers, this had to be done by analogy with the “economic” method. That is, pay tax on the full amount of construction costs, both using your own and external resources (Letter of the Ministry of Finance of the Russian Federation dated January 16, 2006 No. 03-04-15/01). Moreover, the Federal Tax Service of the Russian Federation immediately began to use the position of the Ministry of Finance, bringing it to its territorial divisions for further use by inspectors and payers (Letter of the Federal Tax Service of the Russian Federation dated January 25, 2006 No. MM-6-03/63).

Thus, organizations carrying out construction and installation work for their own consumption were required to pay tax not only for themselves, but also for the contractor. Despite the fact that the latter is already obliged to remit VAT on the implementation of construction work. What should be done with the “contractor” deduction, which is due to a company under construction under clause 6 of Art. 171 of the Code, the tax authorities did not explain.

Fortunately, this controversial situation did not last long. In March 2007, at the request of one of the organizations, the Supreme Arbitration Court of the Russian Federation, in decision dated 03/06/07 No. 15182/06, declared the part of the mentioned letter of the Ministry of Finance of the Russian Federation invalid. The one that talks about charging a “contract” tax during construction for one’s own needs. The Ministry of Finance tried to defend its position in arbitration courts, but they did not support it.

The Presidium of the Supreme Arbitration Court of the Russian Federation, in Resolution No. 7526/07 dated October 09, 2007, recognized the legality and validity of the initial court decision. Thus, when constructing for your own needs, it is necessary to charge and pay VAT only on your own part of the costs.

The right to deduct “input” tax on materials purchased for capital construction does not depend on the fact of filing documents for state registration of rights to the object.

Not so long ago, one of the conditions for deducting input VAT was its payment to the supplier. There have been quite a lot of disputes between taxpayers and tax authorities on this matter. One can recall the sensational Determinations of the Constitutional Court of the Russian Federation dated April 8, 2004 No. 169-O and November 4, 2004 No. 324-O, in which the “reality” of the costs incurred by the buyer (at the expense of one’s own, and not at the expense of borrowed funds) was put forward as a prerequisite for deduction of “input” tax.

The topic has not lost its relevance today. At the end of last year, the Presidium of the Supreme Arbitration Court of the Russian Federation had to return to it (see Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated October 2, 2007 No. 3969/07).

Based on the results of a desk audit, the inspectorate decided to deny the joint-stock company the application of a VAT deduction. The basis was that the company paid its partners partly with funds received under the loan agreement, and partly with money received from the sale of its own shares. According to the inspectors, in this case, the company’s expenses did not correspond to the concept of “real”, since the loan had not been repaid at the time of drawing up the VAT return, and the organization sold the securities to a future supplier. That is, according to the inspectors, the offset of the tax from the budget was illegal.

But the Presidium of the Supreme Arbitration Court of the Russian Federation did not agree with the arguments of the tax authorities. First of all, the judges pointed out that when the company made payments to its counterparties, “there was a real movement of funds in settlement accounts.” At the same time, goods and services were purchased for VAT-taxable transactions. In addition, all funds - both borrowed and received from the sale of shares - are the property of the company, and it has the right to dispose of them at its own discretion. At the same time, the company made payments to repay the loan without delay, within the terms established by the contract. In addition, among the conditions established in the Tax Code of the Russian Federation for obtaining a VAT deduction, there is no condition for full payment of borrowed funds.

The judges of the Supreme Arbitration Court found the ways for the company to attract additional capital to be completely justified and economically feasible. And this removes from the company suspicions of dishonesty and the focus of its actions solely on obtaining a VAT deduction. At the same time, the judges recalled one important provision from the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated October 12, 2006 No. 53 “On the assessment by arbitration courts of the validity of a taxpayer receiving a tax benefit.” According to paragraph 9 of this document, it is impossible to draw unambiguous conclusions regarding the methods of raising capital about the “unreasonability” of a tax benefit (in this case, a VAT deduction). Therefore, the company has every right to the deduction presented in the declaration for the disputed period.

Taxpayers, by virtue of paragraph. 3 paragraph 6 art. 171 of the Tax Code of the Russian Federation, has the right to count on a tax deduction, provided that construction and installation work is related to property intended for carrying out operations taxable in accordance with Chapter 21 of the Tax Code of the Russian Federation, the cost of which is subject to inclusion in expenses (including through depreciation deductions) when calculating corporate income tax.

If, when carrying out construction and installation work, an organization intends to subsequently use the facility on which the work is being carried out for VAT-free activities, then the VAT accrued on the cost of construction and installation work cannot be deducted. If it has not yet been determined for what types of activities the object will be used, or if it is planned to conduct both taxable and non-VAT-taxable transactions in the future, then the taxpayer has the right to deduct the entire amount of tax accrued on the cost of construction and installation works. Then, in the period when VAT-free transactions appear in accounting, you will have to restore part of the tax accepted for deduction.

The Federal Tax Service of the Russian Federation in Letter dated November 28, 2008 No. ШС-6-3/862@ also gave the corresponding explanations, agreed with the Ministry of Finance in Letter dated November 13, 2008 No. 03-07-15/116. In the situation under consideration, VAT accrued on the cost of construction and installation work performed for one’s own needs is subject to deduction in the generally established manner. After the object is put into operation (that is, when it begins to be used for operations subject to and not subject to VAT), the previously legally deductible VAT must be restored.

The tax is subject to restoration and payment to the budget in the manner prescribed in paragraphs 4 and 5 of clause 6 of Art. 171 Tax Code of the Russian Federation. In particular, at the end of each calendar year (within 10 years counting from the year in which the object begins to depreciate), the VAT return submitted to the inspectorate at the taxpayer’s place of registration for the last tax period must reflect the restored tax amount.

The amount of tax to be restored and paid to the budget is calculated based on 1/10 of the amount of tax accepted for deduction in the corresponding share. The specified share is determined by the cost of goods shipped (work performed, services rendered), transferred property rights that are not taxed and specified in clause 2 of Art. 170 of the Tax Code of the Russian Federation, in the total cost of goods (work, services), property rights shipped (transferred) for the calendar year. The restored amount of tax is not included in the cost of this property, but is taken into account as part of other expenses in accordance with Art. 264 of the Tax Code of the Russian Federation.

As for the tax deduction of “input” VAT on materials used for construction, the Federal Tax Service of the Russian Federation indicated that VAT presented by contractors (customers-developers) on goods (works, services) purchased for construction and installation work is accepted for deduction in in full, regardless of how this object will be used in the future. This conclusion directly follows from the provisions of the Tax Code of the Russian Federation, because self-employed construction is a VAT-taxable operation, therefore, the taxpayer can offset the VAT claimed by suppliers of materials used during construction. To do this, it is necessary that goods (work, services) be registered and that the organization has primary documents, as well as invoices of suppliers and contractors, properly executed. Of course, payment is not required to accept VAT as a deduction.

If an organization creates or builds an object of fixed assets for activities not subject to VAT, then the amount of tax is not deductible and is included in the initial cost of the object.

During construction, the organization may engage contractors to perform certain types of work. In this case, the VAT tax base should not include expenses for the services of contractors.

The invoice previously recorded in the sales ledger should be recorded in the purchases ledger.

The new procedure for deducting VAT on construction and installation work performed on a self-employed basis practically provided taxpayers with the opportunity not to pay VAT to the budget on the cost of this work. This will not only reduce tax payments, but will also make the accountant’s work easier, since he will not have to track the payment of tax to the budget and then accept it for deduction.

Application of the simplified tax system

Based on sub. 22 clause 1 art. 346.16 of the Tax Code of the Russian Federation, the amount of VAT paid to the budget on the cost of construction and installation work is included in expenses when determining the tax base for the tax paid in connection with the use of the simplified taxation system.

The created fixed asset, subject to its payment and commissioning, is recognized as part of tax expenses in equal parts in the corresponding tax period, subject to the application of the “income minus expenses” base.

Thus, if an organization carries out construction and installation work for its own consumption, being in the general regime, and then begins to apply the simplified tax system, then based on the results of the last VAT tax period preceding the transition to the simplified tax system, it will have to calculate VAT on all actual expenses for the implementation construction and installation work during this period and pay it to the budget.

L.A. Elina, economist-accountant

They didn’t recognize their tax expenses: is it necessary to charge VAT “for your own needs”?

Thank you for the suggested article topic. N.A. Pilipenko, Chief Accountant of Soyuzgeoservice LLC, Tyumen.

Often, accountants prefer not to take into account certain “doubtful” expenses that the tax office likes to cling to when calculating income tax. And they are shown only in accounting. But even with such careful accounting, accountants see a danger: what if the tax office suddenly comes and charges additional VAT, having discovered transactions involving the transfer of goods (performance of work or provision of services) for its own needs? And it must be said that there is reason for concern: some tax authorities do just that. Who is right and who is wrong - we will sort it out.

When they can find “their own needs”

VAT is imposed on the transfer of goods (performance of work, provision of services) for one’s own needs, the costs of which are not taken into account for profit tax purposes (including through depreciation deductions) subp. 2 p. 1 art. 146 Tax Code of the Russian Federation. The position of the Ministry of Finance is that transfer for own needs occurs only when:

• <или>goods are transferred from one structural unit to another;
• <или>one division performs work (provides services) for another division.

The court decisions mentioned in the article can be found: section “Judicial Practice” of the ConsultantPlus system

So if there is no transfer of anything between the structural divisions of your organization, then there is no need to charge VAT. Letter of the Ministry of Finance dated June 16, 2005 No. 03-04-11/132. Arbitration courts adhere to the same point of view Resolution of the Federal Antimonopoly Service ZSO dated June 25, 2012 No. A67-3382/2011; FAS MO dated September 28, 2011 No. A40-61104/10-116-271,. Well, if in the organizational structure of your company there are no divisions at all, then there can be no talk of transferring anything between them.

Moreover, it is obvious that services and works purchased externally cannot be transferred for one’s own needs. After all, it is physically impossible for another to “re-provide” services or “over-perform” work from one department to another. Therefore, if you do not take into account the cost of such work (services), an additional VAT item will definitely not arise. Resolutions of the Federal Antimonopoly Service of the Moscow Region dated 04/05/2011 No. KA-A40/1652-11, dated 04/13/2011 No. KA-A40/1689-11.

If it was possible to take into account the expenses, then there is no need to pay VAT

Taking into account the above, it would seem that we can conclude that VAT on “own needs” will have to be charged if at the same time:

• goods are transferred from one department to another;
• the organization, on its own initiative (for fear of a dispute with tax authorities), decided not to take into account the costs of their acquisition for profit tax purposes.

And that's exactly what some tax inspectors think.

Attention

The VAC agreed that there is no need to charge VAT on “unaccounted for” expenses.

However, the courts, led by the Supreme Arbitration Court, do not support this approach. They indicate that if the taxpayer has not exercised the right to include costs associated with the transfer of goods (performance of work, provision of services) for his own needs as expenses for profit tax purposes, then this does not entail the emergence of an object of VAT taxation Resolution of the Presidium of the Supreme Arbitration Court of June 19, 2012 No. 75/12; FAS VSO dated October 30, 2007 No. A33-18423/06-F02-8077/07.

So, VAT “for own needs” arises only if:

• there was a transfer of goods within the organization from one structural unit to another, or one unit performed work or services for another;
• the costs of purchasing transferred goods cannot be taken into account as expenses that reduce income tax. That is, these expenses do not meet the conditions defined in paragraph 1 of Art. 252 of the Tax Code of the Russian Federation.