Investment tax credits are

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

At the moment, there are almost no organizations that would not use borrowed funds in their activities for production modernization, replenishment of working capital or raw materials. Loans are usually issued in banking institutions of various kinds. However, there is a truly unique type of lending that can help solve the problem of lack of funds. Here we are talking about such a phenomenon as investment tax credits. They are under the control of the state. You should figure out what it is.

General characteristics

In accordance with the Tax Code adopted in the Russian Federation, an investment tax credit is not a loan, but a kind of deferred payment. It does not provide for the actual receipt of funds by the organization, but only the registration of the possibility of paying taxes to the state in a noticeably moresmall size. The terms of lending for the most part repeat the conditions under which loans are issued by various credit institutions, namely banks and fund organizations. The agreement is concluded with the state structure.

Like regular bank loans, investment tax credits have a fixed period of validity, interest, often very low interest, and maturity dates. In addition, the contract defines property liability for non-payment, and also provides a guarantee that both parties will fulfill their obligations.

Features

Quite often, tax debts are noted not only in large companies, but also in individual enterprises that also need support in resolving problems with budget payments. However, investment tax credits are something that is only available to legal entities. This feature consists in the principles of property liability of the borrower to the creditor. All pledged property can be withdrawn from the organization even without a corresponding court decision. And to deprive an ordinary citizen of his housing is almost impossible in a similar situation. The Civil Code of the Russian Federation clearly spells out the points on the protection of private property, especially if it is necessary for permanent residence.

Lending purposes

An investment tax credit can be granted to an organization thatFor example, to pay income tax. In case of violation of the terms of its payment by the state, various sanctions, pen alties, and fines are often imposed. That is why, in order to avoid the need to pay significant amounts of funds to the treasury, it is required not to violate the deadlines for paying taxes. Investment tax credits can be used for a not so extensive list of purposes, which the state has taken care of. Together with income tax, regional and local budgetary payments are credited.

Action

Investment tax credits, like other types of lending, have their own specific mechanism of action, through which the organization, as mentioned above, can reduce payments for the past period. And the contractual relationship between the parties will be completed when the amount of underpaid tax reaches the same level as the loan amount. Such an agreement from the outside looks like permission from the state to have debts. The organization does not have the right to reduce payments indefinitely. The government has set a limit of 50% of the total tax payable under normal circumstances. Investment tax credits provide for time frames that are traditional for all other loans. And here we are talking about most banking products. The investment tax credit is granted for a period of 1-5 years. This is usually enough time to resolve the organization's financial problems.

Features of work

Investment tax credit could begranted to any organization, and there are cases when such a company receives losses in a certain period or must pay a smaller amount of taxes than expected. In this case, there is a so-called surplus of credit resources. It is very easy to get out of this situation - all the savings must be transferred to the next period.

Despite the fact that an investment tax credit can be granted for a period of 1-5 years, all this time the tax authorities are quite scrupulously controlling the organization that issued it. It must not only prepare a very solid justification for the need for such a reduction in tax payments, but also provide throughout the life of the loan detailed reports on the financial activities carried out. In addition, the organization will be constantly checked by the tax authorities, much more often than usual. This is quite natural, since the state is aimed at the strictest control over the spending of funds from the budget.

Subtleties of the process

An investment tax credit is a good opportunity for a taxpayer to reduce their tax payments within certain limits within a specified period in order to make payments in stages not only of the loan itself, but also of interest accrued on it in the future. This type of loan is available for income tax, as well as for some local and regional.

Investment tax credit can be granted on corporate income tax. At the same time, the organizationwho received it, has the right to reduce their tax payments during the validity of the contract. The reduction will be made for the corresponding tax on each payment. This is done until the funds not paid by the company due to such reductions are equal to the amount of the loan that was granted under the relevant agreement. The document itself provides for all the points regarding the specific procedure for reducing tax payments.

Several contracts

If the company has several concluded agreements for the provision of the corresponding loan, the validity of which has not expired at the time of the next payment, the accumulated loan amount will be determined separately for each of them. In this case, its increase is carried out in order, starting with the contract that was concluded first, after the amount on this document reaches the established limits, the organization will have the opportunity to increase the accumulated amount under the next contract.

While an investment tax credit may be granted on income tax, its amount cannot exceed half of the total amount of tax. If the amount of savings on the loan exceeded these 50%, then the difference between the amount received and the maximum allowable is transferred to the next reporting period. In the event that for a separate reporting period the organization had losses based on the results of its activities, then the surplus of the accumulated amount is transferred to the next period, but at the same time it is recognizedaccumulated loan amount in the first reporting period.

To whom is it provided?

In accordance with article 67 of the Tax Code of the Russian Federation, an investment tax credit can be granted if the company meets certain requirements:

- The organization is engaged in research, development work or technical re-equipment of its production, including those aimed at creating jobs for people with disabilities, as well as protecting the environment from industrial waste pollution. In such a situation, investment tax credits are granted in an amount that is 30% of the value of the purchased equipment intended for all specified purposes.

- For organizations that conduct innovative or innovative activities, including those involved in the creation of new or improvement of applied technologies, the creation of new types of materials or raw materials. In this case, investment tax credits can be provided for amounts that will be negotiated by the organization and the authorized body.

- For organizations that are engaged in the implementation of orders for socio-economic development of particular importance, as well as providing especially important services to the civilian population. In this case, the loan amount will also be determined by the agreement of the parties.

Contract clause

In a contract or agreementon granting a loan, the following items must be included:

- the order according to which tax payments will decrease;

- loan amount;

- validity period;

- an indication of the tax for which the described loan will be provided;

- the amount of interest that will be charged on the loan amount;

- repayment order;

- responsibility of the parties.

Related Documents

Investment tax credits will not be granted unless a pledge on property or a suretyship agreement is issued. In this regard, it is required to attach to the contract documents about the property that will serve as the subject of collateral. In addition, the agreement must specify provisions to prevent, during its validity, the transfer of possession or sale of equipment or other property if its acquisition has become one of the points for providing the organization with the described loan.

Conclusions

In relation to local or regional tax authorities, their own conditions for the provision of an investment tax credit are established. At the same time, the legislation is allowed to establish its own conditions for granting a loan and the grounds for this, as well as to change the allowable terms for the loan.