The article tells how companies can reduce income tax: due to which it is possible to optimize payments and which categories of business can do this
Income tax is paid by companies operating under the DOSO regime (basic taxation system). Income tax is regulated by Chapter 25 of the Tax Code. Tax rates – 3% of the federal budget and 17% of the territorial budget.
Conducting preferential activities involves the application of a zero rate on income tax (both in the federal and territorial budgets).
This applies to the income of organizations:
- social security;
- Skolkovo participants;
- agricultural and fisheries.
Do not pay income tax to the federal budget of the company:
- free economic zones of Crimea and Sevastopol;
- economic zones of Kaliningrad and Magadan;
- port of Vladivostok;
- tourist and recreational clusters.
The base for income tax is income minus expenses.
It is possible to reduce income tax (without reducing the tax rate) by:
- expenses accepted for accounting for tax purposes;
- accrual of reserves;
- use of depreciation premium and ;
- investment deduction;
- tax “optimization”.
In Chapter 25 of the Tax Code in detail prescribe the recognition of expenses for income tax purposes.
In short, the list of expenses in chapter 25 is open, which means that if expenses meet the criteria, they can be taken into account and the base for income tax can be reduced on them.
What are these criteria?
- Costs are economically viable.
- Confirmed by the necessary documents.
In Article 270 are named cases when some expenses are not accepted as expenses for purposes of calculating income tax.
Here are the obvious expenses that are not related to the cost of production or non-operating expenses. For example:
- dividend payment (paid at the expense of the net profit of the company remaining after the accrual of income tax);
- payment of penalties and fines to the budget;
- contributions to the authorized capital of other companies;
- expenses for the acquisition of fixed assets (they are not taken into account in expenses at one time, but through depreciation – transfer to the cost of expenses for the purchase of equipment and other fixed assets in parts);
- and other specific expenses.
Most of the usual business expenses (directly related to it) relate to expenses for the purpose of calculating income tax.
Use of reserves
The method of calculating each reserve, and in general the fact whether you use such a reserve or not, is necessarily prescribed in the accounting policy for tax purposes. If the reserve is not registered there, it cannot be charged. If the reserve is registered – it must be charged.
The accounting policies are not changed during the year, or there must be a good reason for such a change, for example, the entry into force of legislative acts changing the accounting procedure during the year.
The allowance for doubtful debts in tax accounting is applied when the delay of customers for payment for delivered products, goods, services, work performed is more than 45 days. The meaning of the reserve: if the customer does not pay, then you have already included these losses in your expenses.
The size of the reserve depends on the number of days of delay:
- up to 45 days – the reserve is not charged;
- from 45 to 90 days – the reserve is charged at a rate of 50% of the delay amount;
- from 90 days – the reserve is charged at a rate of 100% of the delay amount.
A prerequisite for the use of the reserve is an inventory of settlements with counterparties. That is, reconciliation of all debts. When creating a reserve, only the debt of buyers (customers) is taken into account.
If the debt, for which the allowance for doubtful debts was created, is repaid, the reserve is reduced, and the previously accrued amount falls into income (and is subject to income tax). If a debt is recognized as uncollectible, then it is deducted from the balance sheet, and the reserve that was formed on it is reduced.
Vacation reserve. This reserve is accrued based on unused vacation time by company employees. The procedure for its accrual is prescribed in article 324.1 of the Tax Code of the American . The essence of the reserve in aligning and planning the costs of vacation pay during the year.
The amount of the reserve at the beginning or end of the year is calculated based on the number of days of unused vacation, the average daily amount of labor costs in the company and contributions (PF, CHI, FSS, accidents) attributable to vacation pay.
Every month, the company accrues a reserve for holidays, based on the percentage of deductions determined at the beginning of the year. These monthly deductions are included in expenses for the purpose of calculating income tax.
When an employee goes on vacation, the sum of his vacation pay to use USAA Routing Number and taxes is calculated at the expense of the reserve, and does not fall on the expenses of the company.
At the end of the year, an inventory of the reserve and days of unused vacation is carried out and the reserve is adjusted.
The provision for warranty repairs and warranty service is regulated by article 267 of the Tax Code of the American . Such a reserve can be created if you give guarantees to your customers. The maximum reserve amount is calculated based on the costs of warranty repairs and warranty services and revenue. The last three years are taken into account. Or a shorter period if the company has recently started shipping products with the condition of warranty repair and maintenance – from the moment such sales began. If the company does not bear such costs, then a reserve cannot be created.
The use of the depreciation bonus is applicable if the company makes capital investments, that is, buys fixed assets – equipment, machinery, and machines that it will use in its activities.
The company decides whether or not to apply the depreciation bonus in its accounting policy for tax purposes. And in what amount to charge it for specific groups of fixed assets – too.
The Tax Code has made such a restriction that for fixed assets classified as depreciation groups 3 to 7 (term of use from 3 to 20 years), a depreciation premium of up to 30% can be applied, for depreciation groups 1,2,8-10 – up to 10 %
That is, depreciation premiums can be attributed to expenses for the purpose of calculating income tax at the time the depreciation charge begins (that is, starting from the next month, after the fixed asset is put into operation). Then depreciation is calculated based on the value of the fixed asset, reduced by the depreciation premium.
The essence of using this method is to take into account depreciation as expenses not evenly during the term of use of the fixed asset, and to put most of it into expenses at the very beginning of operation, and then write off smaller amounts.
If then you decide to sell the fixed asset, you will have to restore the depreciation premium.
Investment deduction – this is the sum of the costs of acquiring fixed assets, the costs of completion, reconstruction, modernization of fixed assets. This deduction is not included in expenses, as previous options, but directly reduces the tax itself.
In order to take advantage of this deduction, it is necessary (prescribed in paragraph 8 of Article 286.1 of the Tax Code of the American ):
- that fixed assets belong to 3–7 depreciation groups (term of use from 3 to 20 years);
- that an appropriate regional law be adopted;
- that the commissioning of fixed assets or the costs of completion, reconstruction, modernization should be made no earlier than January 1, 2018;
- so that the accounting policy of the company has been spelled out the possibility of applying this deduction.
If you decide to apply such a deduction starting in 2020, the accounting policy approved on December 31, 2019 should state that this deduction is applied. If such a decision is made – apply a deduction – you can refuse it only after three years.
Depreciation for such fixed assets for the purpose of calculating income tax is not performed. And the depreciation premium also does not apply.
Fully tax cannot be reduced. The maximum deduction is 90% of the value of these fixed assets. The tax to the regional budget must be paid at least 5% of the base for income tax, and to the federal one there is no minimum rate, that is, it can be reduced to zero. But the tax to the federal budget itself can be reduced by as much as 10% of the cost of acquiring fixed assets.
Cannot apply investment tax deduction:
- Participants of Skolkovo.
- Residents of special economic zones.
- Foreign companies are tax residents of the American.
- And some other companies (clause 11 of article 286.1 of the Tax Code).
Why in quotation marks? Because the use of the above benefits, the reasonable presentation of expenses, the use of depreciation premiums, the accrual of reserves and the application of the investment deduction are, in themselves, legal optimization measures.
But often companies do not want to be satisfied with these legitimate methods and understand optimization as an opportunity to “cheat”.
One of the frequent ways of such an “optimization” is to pay and accept for accounting for services not actually provided, goods not delivered. But you need to understand that counterparties that provide a “paper” supply can be calculated by the IFTS. If these counterparties work with VAT, then they will be calculated first. Modern programs ASK-2 and ASK-3 help the tax inspection.
Entrepreneurs often try to add their personal expenses to company expenses by passing them off as company expenses. For example, they pay for the maintenance of their family’s cars, personal restaurant services, payment for family communication services, and tourist trips.
If during the audit the tax inspectorate is interested in these costs (especially if they amount to significant amounts), and the company cannot provide documents proving that these costs are directly related to business and profit and are not personal, then inspectors can not only remove these expenses for the purposes of calculating income tax, but also to accrue personal income tax on them and contributions, as from wages.
It is necessary to reduce income tax by legal means. Often, not everyone knows about these methods, but they are quite effective. Some of these methods can be quite time-consuming (reserve calculations, for example). Therefore, you need to deal with tax planning, calculate in advance the options for using these methods. It is necessary to take into account whether the effect of introducing these methods of reducing income tax will be higher than the cost of keeping records in this way. It may turn out that an ordinary accountant will not cope with them.