How is VAT refunded and who needs it at all?

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

How do market participants see the VAT refund, that is, subjects of various forms of ownership? Some evaluate it as the most important source that ensures the filling of the state budget, while others argue that this category is not entirely adapted to the realities of domestic business. In other words, the latter insist that there are very serious problems with the payment and return of the said tax.

What is a VAT refund? This is the return of a certain part of the financial resources that were transferred in the form of a fee of the same name in excess of the required one. The need for such a return arises for many payers. But the undisputed champions in this matter are leasing companies, as well as organizations involved in various kinds of export-import operations.

On the difficulties VAT from the budget? Here, first of all, we are talking about tax audits. The relevant fiscal authorities, when accepting declarations with a request to return the excess, in most cases initiate an audit of the activity of the applicant. Giventhe act seems very logical: what kind of state wants to part with the funds already transferred to the budget? Checks are initiated to make sure that the declaration of the enterprise is lawful and justified. At the same time, it is necessary to check whether it is clean before the law.

Accordingly, any organization that has issued a return application must prepare (or put in full order) all its financial and accounting records, contracts, and so on. Otherwise, any flaw found by the tax authorities not only cancels the VAT refund, but also causes the imposition of additional pen alties by the state. With this, he definitely, as they say, will not rust. Leasing companies are in the zone of special attention from the mentioned regulatory authorities. They very often face the question of the return of the type of tax in question. The fact is that each of these companies receives its income in the long term, and the value added tax is obliged to pay immediately. Hence the need arises. The Federal Tax Service very carefully studies the declarations submitted by such organizations, because it reasonably believes that many lessors deliberately underestimate their income.

Accordingly, the receipt of compensation by such figures is not justified.

On exportsVAT refunds for exports deserve special consideration. And all because domesticlegislation in this area is characterized by a certain vagueness of wording and definitions, which give rise to a lot of questions and difficulties. As a result of confrontation between business entities and the state, the decision on whether there will be a VAT refund or not is decided by the arbitration court. As for the procedure for the return of funds, the procedure is standard. First, the organization submits a declaration. After that, a desk audit of its activities is carried out, as a result of which a decision is made on the possibility or impossibility of a return. It is noteworthy that this can either be a transfer of excess funds to the company's current account, or a credit for the amount paid for future tax periods.