VAT for "teapot". All about VAT for dummies

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

Value added tax is obligatory for payment for any enterprise engaged in the production, sale of goods, provision of services. In this article, we will talk about tax rates, objects of taxation, the VAT calculation system and the importance of filling out a tax return.

VAT concept

Value added tax is indirect. It is transferred to the state budget by the seller, but at the end it is paid by the consumer. VAT is included in the price of any product and is always paid by the last buyer.

VAT components

It will be easier to understand the essence of VAT for a "teapot" if you understand the concepts of a tax credit and an obligation, the difference between which is the actual amount to be paid to the state treasury:

• Tax credit is the amount by which you can reduce the tax liability in this reporting period, since it has already been paid earlier.
• Tax liability - the total amount of tax for the reporting period. For example, a seller wants to sell a product worth $10,000. with a surcharge of 15%, that is, for 11500 c.u. The VAT rate for it is 20%, that is, the tax is 2300 USD

Documentation of payments forGoods and services happen with the help of tax invoices. In addition to them, there is another important document - an invoice, which is issued in two copies: one is for the seller, the other for the buyer. If you purchase a product, then register your invoice in the purchase book, if you sell, then in the sales book.

VAT calculation for the "teapot" will be easy if you save all tax documentation. If there is no, incorrectly executed or lost invoice from the seller, you are not en titled to a tax credit, which means you overpay VAT, since you have nothing to deduct from the tax liability.

Calculation

VAT accounting for "dummies" begins with the registration of invoices in the sales book and the purchase book. The difference between the tax liability and the total tax credit for the reporting period is VAT payable. If you carefully maintain accounting documentation, it is very easy to calculate VAT. For dummies, postings can be very difficult, so a professional should make entries, since they are the basis for the final tax calculation at the end of the reporting period.

The rate of value added tax depends on the activities carried out by the enterprise, as well as on its annual cash turnover. Let us explain the calculation of VAT using the example of the production and sale of women's dresses in the Russian Federation, for which VAT is 18%. The manufacturer purchased fabric and accessories in the amount of 20,000 rubles, and also paid VAT of 3,600 rubles. He received an invoiceadded to the shopping book. 3600 rub. is a tax credit in this case.

10 dresses were produced from the raw materials, which are planned to be sold at a price of 3500 rubles. each, that is, the total markup on the goods will be 15,000 rubles. The tax liability is calculated as follows: (350010)18/100=6300 rubles. The formula for mandatory VAT for the "teapot" is simple: a tax credit is deducted from the tax liability. In our example, you need to do the following: 6300-3600=2700 rubles. The entrepreneur must pay VAT in the amount of 2700 rubles, since 3600 rubles. he had already contributed when he purchased the fabric and fittings.

Taxpayers and objects of taxation

Individual entrepreneurs, organizations and persons transporting goods across the state border are VAT taxpayers. What is it for dummies? This means that you can find out if you will pay value added tax in the following way: you need to determine your status in accordance with the Tax Code of the country where your business is registered.

The following transactions are subject to taxation in the Russian Federation:

• Sale of goods and services on the territory of the Russian Federation. They also include the transfer of property rights and collateral.
• Performance of construction and installation works.
• Transfer of goods, services or works for own needs. When calculating VAT for the "teapot", it is worth considering that the costs of such operations are not deductible.
• Importgoods to the territory of the Russian Federation.

Tax rates in Russia

VAT for "dummies" (2014) - these are 3 rates: 0%, 10% and 18%, determined depending on the type of activity of the enterprise. 0% value added tax is levied on the sale of the following goods, services or works:

• Obligations fulfilled by organizations of pipeline transportation of oil products, natural gas.
• International goods transportation services.
• Provision of railway rolling stock.
• Sale of goods that were exported under the customs procedure for export.

The full list of objects of taxation is set out in Art. 164 of the Tax Code of the Russian Federation. 10% VAT is paid on the sale of food products:

• meat, poultry, seafood, fish;
• eggs;
• s alt, sugar;
• grains, cereals;
• pasta;
• dairy products;
• baked goods;
• vegetables;
• baby and diabetic nutrition.

10% will be charged on the following baby products:

• clothes and shoes;
• beds and mattresses;
• diaper;
• carriages;
• stationery.

Book products of an educational nature related to science or culture, as well as printed periodicals are subject to VAT at a rate of 10%. This does not apply to printed products of an erotic or promotional nature. Medical goods: drugs and medical productsdestinations are also included in the goods subject to 10% VAT.

In all other cases, the tax rate of 18% applies. If we are talking about goods imported into the territory of the Russian Federation, then they are subject to value added tax in the amount of 10% or 18%.

Tax rates in Ukraine

VAT rates in Ukraine today are as follows: 0%, 7% and 20%. The 0% VAT rate applies in the following cases:

• operations for the export of goods from the territory of Ukraine in the customs regime of export;
• delivery of goods for refueling ships in the territorial waters of other states, as well as ships of the Ukrainian Navy;
• supply of goods for refueling or maintenance of aircraft operating international flights or part of the Ukrainian Air Force;
• international transportation of passengers, baggage and cargo by various modes of transport.

The full list of objects of taxation with a rate of 0% is set out in Art. 195 of the Tax Code of Ukraine. A value added tax of 7% is levied on medical products. In all other cases, the VAT rate of 20% applies. In Art. 196 of the Tax Code of Ukraine lists transactions that are not objects of taxation. VAT for "dummies" in 2013 and 2014 was not subject to major legislative changes. In 2015, the main rate may be reduced to 17%.

Paying taxes and reporting

The registration of invoices is the basis for calculating VAT payable. The tax credit and the tax obligation are carried out only in the presence of these documents. It is important that invoices are properly formatted,otherwise they are invalid. In Russia, VAT is deducted to the budget after the end of the reporting period - a quarter, in Ukraine - monthly. The taxpayer has 20 days to process documents reflecting VAT. What is it for "dummies": a declaration that is submitted to the tax office. On its basis, a cameral tax audit is carried out.

Tax refund

If the tax liability is less than the tax credit, then a VAT refund is made. The taxpayer declares to the tax authority the amount to be reimbursed, which is determined during a desk audit. If there are no violations, then after 7 days the tax inspectorate decides on the reimbursement of funds. Within 5 days after the decision is made, the taxpayer is informed about it in writing. The required amount is returned by the territorial body of the federal treasury during the working week.

If violations are revealed during a desk audit, an act is drawn up and sent for consideration to the head of the tax department. He or his deputy shall make a decision on the presence of a tax offense and bringing the taxpayer to the appropriate responsibility. It is worth noting that the amount claimed for a refund can be reimbursed to pay off arrears, debts and federal tax fines.

Rules for filing VAT returns in Russia and Ukraine

At the end of the reporting period, each enterprise registered in the taxinspection, submit a VAT return. For "dummies" we note: in Russia, the reporting period is a quarter, and in Ukraine - a month. The quarterly period for the report is used only if the volume of taxable transactions for the last 12 months does not exceed the amount of UAH 300,000. Within twenty days following the last day of the tax period, the declaration must be submitted to the relevant authorities. Payment of deductions in Ukraine must occur within thirty days after the end of the reporting period, and in Russia - within twenty.

Filing a tax return in Ukraine can be carried out personally by the taxpayer, transmitted electronically or sent by mail as a valuable letter with mandatory notification. In Russia, from 01.01.2014, the VAT return can only be submitted electronically via telecommunication channels. You can choose an electronic document management operator on the regional websites of the Federal Tax Service. It is necessary to conclude an agreement with him, receive cryptographic protection tools and an enhanced qualified electronic signature, which will be used to certify invoices and declarations.

Filling out the VAT return must be carried out in strict accordance with the form established on the date of its submission.

Export VAT

Companies of the Russian Federation that promote their products abroad have a benefit from the state - this is a 0% VAT rate, since the final buyer always pays the full amount of tax for any product (in this case, a foreignconsumer, but to the treasury of his state). Export VAT for dummies: a company that provides goods or services abroad can recover VAT paid earlier on raw materials, production, labor costs, as it often exceeds the VAT recorded in the sales book.

To do this, the exporting company must confirm the legitimacy of accepting a zero VAT rate, the fact of the export operation and the validity of the tax refund. Documents to be submitted to the tax office:

• VAT declaration;
• invoices and invoice copies;
• contract with a foreign partner;
• customs declaration confirming the shipment of goods abroad;
• copies of documents confirming the receipt of goods in another country;
• application for VAT refund.

After that, the tax authority conducts a desk audit and decides on the possibility of returning the claimed amount. If inaccuracies or errors are found in any document, this is fraught not only with a refusal to reimburse the required amount, but also with a fine. To return the funds, it is important to comply with the deadlines and rules for submitting documents, as well as timely respond to requests from the tax office if additional information about the company's activities is needed.

VAT for the state

VAT is a tax that everyone pays. The seller always includes it in the price of the product being sold in order to return his funds, which he has already transferred to the budget. In this way,VAT is a significant and permanent income to the state treasury. The zero VAT rate for exporting companies makes the development of foreign economic relations attractive, and this stimulates the inflow of foreign currency into the budget and stabilizes the country's balance of payments.

The system for the formation and payment of VAT is quite simple, you can read more about this in the Tax Code. Everything about VAT is written in the article, for "dummies" this information is quite enough to understand the essence of the tax in question, as well as the rules for its calculation, deductions to the treasury and the formation of relevant documentation.