Optimization (reduction) of taxes Legal methods of reduction of tax base

The policy of the state on a business output from a shadow

The state takes actions for a business output from a shadow, to improvement of administration and collecting of taxes. The staff of FTS already knows the majority of "grey" tax evasion schemes, and new quickly come to light them by means of constantly improved computer programs (ASK "NDS-2", the AIS "Tax-3").

Besides, on July 13, 2017 FTS together with the Ministry of Finance and Investigative Committee was released by methodical recommendations for territorial tax and investigating authorities about establishment during tax and procedural audits of the circumstances testimonial of the intention in actions of officials of the taxpayer directed to non-payment of taxes (charges) (The letter of FTS of 7/13/2017 No. ED-4-2/13650 @). These recommendations are the detailed instruction for inspectors on identification and proof of schemes of avoidance of taxes and also in details describe widespread schemes of deviation from their payment:

• application of dummy transactions;
• crushing of business with the purpose of unreasonable application of the special tax modes, tax benefits, preferential tax rates;
• substitution of the civil relations with the purpose of extraction of tax benefit.

When it is necessary to begin tax optimization

Think of how legally it is worth reducing a tax burden even before company registration, having selected the most profitable system of taxation depending on the planned type of activity of the organization and also from a possibility of application of the special tax modes and legislatively set privileges.

Nevertheless, to begin to perform tax optimization never late. Starting optimization, first of all it is necessary to analyze the relevant legislation on existence of suitable tax benefits proceeding from tax burden of the company:

• reduced rates;
• remission of a tax of separate categories of legal entities;
• target privileges according to state programs;
• a payment deferral on taxes.

On the basis of the obtained and analyzed information it is necessary to create effective account policy of the company for the purposes of taxation. When holding actions for optimization of taxes of the organization usually focus on reduction in tax for profit and the VAT.

Measures for optimization of income tax

On income tax the revenues of the company reduced by the value of the made expenses (Article 247 of the Tax Code of the Russian Federation) are recognized as the taxation object. To reduce income tax, it is necessary respectively either to reduce income, or to increase expenses. The list of expenses which are considered and are not considered when calculating income tax, it is specified in Chapter 25 of the Tax Code of the Russian Federation.

Legal methods of increase in expenses for reduction of a taxable basis on income tax

1. Creation of reserves:

• on doubtful debts (Article 266 of the Tax Code of the Russian Federation), including obligations of other companies outstanding in time. Contributions to this reserve are made monthly or quarterly, but no more than 10% of revenue. The amounts of assignments for the purposes of calculation of income tax are included non-operating expenses;

• on payment of holidays (Article 255 of the Tax Code of the Russian Federation). This reserve allows the companies to include expenses on payment of holidays in the expenses on compensation evenly within a year. The companies applying an accrual method can create this reserve. The order of creation of reserves is defined by the Tax Code of the Russian Federation;

• on fixed asset maintenance (Articles 260 and 324 of the Tax Code of the Russian Federation). Contributions to this reserve are calculated on the basis of the number of replacements and the estimate of repair work which do not exceed the size set for the last three years. Creation of a reserve is forbidden to the companies working less than three years. The amounts of contributions to this reserve join in the expenses connected with production and product sales, works, services.

Creation of reserves allows the company to distribute evenly the costs during the tax period and it is essential to save on advance payments on income tax.

2. Use of an award on depreciation (Article 259 of the Tax Code of the Russian Federation).

Depending on to what group to a depreciation group a new object belongs, the company can once consider when calculating income tax from 10 (for I, II, VIII, IX, X depreciation groups) up to 30 (for the III-VII groups) percent of expenses from project cost. This award is used both upon purchase of new property, and in case of completion, additional equipments, reconstruction, upgrades of earlier purchased fixed assets.

3. Application of investment tax deduction (Article 286.1 of the Tax Code of the Russian Federation).

This deduction since January 01, 2018 can be used by the companies at acquisition or capital improvement of fixed assets of the III-VII depreciation groups. The possibility of its use should be fixed by the regional legislation. The deduction cannot make more than 90% of an expense amount for acquisition, upgrade and reconstruction of fixed assets. It is important that fixed assets on which the investment deduction was applied further will not be able to be amortized. Application of an investment deduction allows to consider once when calculating income tax a considerable part of expenses on acquisition, upgrade and reconstruction of fixed assets.

Measures for optimization of the VAT

The value added tax is an indirect tax which taxable basis is the cost of traded goods, works and services. The order of its calculation and payment is set by Chapter 21 of the Tax Code of the Russian Federation. According to this order, the company pay to the budget a difference between the amount of tax calculated and the amount of tax of paid.

In fact this tax is paid by the buyer as a part of the goods price, and the company only transfers this amount of the budget. The aspiration to reduce the VAT to payment in the budget by the companies is clear. Often they should transfer into the budget on payment of the VAT own means as buyers can not be calculated for goods, works or services in time. Besides, the VAT amount underpaid in the budget increases income of the company which is not assessed with income tax.

Methods of decrease in VAT amount to payment

1. Remission of the VAT at observance of the conditions provided by Article 145 of the Tax Code of the Russian Federation:

• revenue for three previous calendar months should not exceed 2,000,000 rubles excluding VAT;
• the company should not sell excise goods;
• diggings should notify tax authorities on use of the right to release from the VAT.

It is necessary to consider that this method will be unprofitable to those companies which sell goods, perform works or render services to the organizations applying the general system of taxation. In this case the companies will not be able to show the VAT to compensation on the purchased values, works and services.

2. Expansion of a supplier list, VAT which are payers. This method will allow to increase the amount of the "entrance" VAT, thereby having reduced a tax to payment.

3. Application of the option, i.e. signing of the contract on which the company acquires the rights to purchase in the future a certain basic asset (property) at the price recorded in the agreement. Payment of an option premium at the receiver is not assessed with the VAT (Subparagraph 12 of Article 149 of the Tax Code of the Russian Federation).

4. Use of subtleties of different types of agreements and the content of economic transactions for the purpose of optimization of the VAT:

• signing of the contract on intentions;
• providing loan;
• use in calculations of a deposit, pledge, special conditions of transition of the property right;
• etc.

When using this method the risk of retraining of the agreement and content of economic transaction in the illegal scheme is quite high therefore it is important to be based not only on regulations of the Tax Code of the Russian Federation, but also on the last explanations of the Ministry of Finance, FTS and the available modern judicial practice.

The right of legal entities to the choice of an optimal method of taxation is affirmed in the Tax Code and confirmed with the Constitutional court of the Russian Federation. It is important to distinguish "schemes of avoidance of taxes" and reasonable conducting tax accounting. The analysis of tax burden of the company and a number of measures for reduction of tax base it is possible to develop by own forces or to address the third-party consultant to take advantage of a "fresh" professional look from outside and to reduce own labor costs.

See Also

• Taxes in Russia
• SP (individual entrepreneur)
• Economy of Russia
• Privileges for the IT companies in Russia

Notes

Author: Ekaterina Kalinkina, the branch head Intercomp in Ryazan