Restoration of VAT when writing off OS. Fixed asset write-off: VAT
LLC sells fixed assets as unusable due to obsolescence and physical deterioration. Should LLC recover VAT upon write-off? 10-91.01, at what price? on the market? And if subsequently the materials were sold with VAT.
paragraph 3 of article 170 tax code RF. The write-off of fixed assets is not mentioned in this paragraph. The Tax Code of the Russian Federation does not provide for other grounds for VAT recovery.
Receive materials at the market price.
Record the sale of materials as other income. Write off the cost of materials sold to other expenses. The lines will be like this:
Debit 62 Credit 91-1
- reflected the proceeds from the sale of materials;
Debit 91-2 Credit 10
- written off the cost of materials.
However, if during the liquidation of fixed assets scrap is accounted for, which will be further sold, the following must be taken into account. On the basis of paragraphs 2 and 3 of Article 170 of the Code, value added tax is subject to recovery in cases where the purchased goods (works, services), including fixed assets, are not used in activities subject to value added tax. The amounts of tax that were previously legally accepted for deduction on a fixed asset in respect of its part, which is credited to the warehouse as scrap and sold using the exemption established by , are subject to recovery. Such clarifications are given in Letter No. 03-07-11/25579 of the Ministry of Finance of Russia dated 04.05.2016.
Rationale
Is it necessary to restore input VAT in case of early write-off of fixed assets for which depreciation has not been fully accrued?
No no need.
The organization must restore the tax deduction only in cases expressly specified in paragraph 3 of Article 170 of the Tax Code of the Russian Federation. The write-off of fixed assets is not mentioned in this paragraph. The Tax Code of the Russian Federation does not provide for other grounds for VAT recovery.
In addition, the input VAT on fixed assets was previously accepted for deduction in the full amount legally. The Tax Code of the Russian Federation does not require the application of a deduction, provided that fixed assets are fully depreciated. The main thing is that the organization should use them to some extent to perform VAT-taxable operations. This follows from article 171 and paragraph 3 of clause 1 of article 172 of the Tax Code of the Russian Federation.
The correctness of this point of view is confirmed by numerous arbitration practice (see, for example, the decision of the Supreme Arbitration Court of the Russian Federation of October 23, 2006 No. 10652/06, the determination of the Supreme Arbitration Court of the Russian Federation of January 29, 2010 No. VAS-17594/08, of August 31, 2009 No. VAS-11530/09, dated December 24, 2008 No. VAS-16624/08; Resolutions of the Federal Antimonopoly Service of the West Siberian District of August 27, 2013 No. A27-19496/2012, of the Moscow District of April 27, 2010 No. KA- A40 / 2005-10, dated January 13, 2009 No. KA-A40 / 12259-08, Volga District dated September 23, 2010 No. A12-1810 / 2010, dated May 14, 2009 No. A55-4292 / 2008, North - Caucasian District dated September 24, 2009 No. A32-14927 / 2008-51 / 113).
Similar conclusions can be drawn from the letters of the Federal Tax Service of Russia of June 17, 2015 No. GD-4-3/10451 and of May 21, 2015 No. GD-4-3/8627. In both documents tax office relies on the position of the Supreme Arbitration Court of the Russian Federation, set out in the decision of October 23, 2006 No. 10652/06, and on the letter of the Ministry of Finance of Russia of November 7, 2013 No. 03-01-13/01/47571.
Sergei Razgulin, Acting State Councilor of the Russian Federation, 3rd class
How to reflect in accounting the posting and sale of materials (scrap) received during the liquidation of a fixed asset
As a rule, when the fixed asset is disposed of, materials, such as scrap metal, remain. Receive them at the market price. In the future, materials can be used in production or sold.
The receipt of materials during the liquidation of the fixed asset reflect the posting:
Debit 10 Credit 91-1
- materials received during the liquidation of the fixed asset are capitalized.
Record the sale of materials (scrap) as other income. Write off the cost of sold materials (scrap) to other expenses. The lines will be like this:
Debit 62 Credit 91-1
- reflects the proceeds from the sale of materials (scrap);
Debit 91-2 Credit 10
- written off the cost of materials (scrap).
3. LETTER OF THE MINISTRY OF FINANCE OF RUSSIA DATED 04.05.2016 No. 03-07-11/25579
Letter
On the restoration of VAT and the application of corporate income tax upon disposal of property
Question Due to physical obsolescence and inexpediency of further repairs, the company at OSNO wrote off a partially depreciated fixed asset. After this fixed asset was decommissioned, separate components and spare parts were credited to the balance sheet, which the Company plans to partially use in repairs of similar fixed assets, and partially sell them to third parties. The remaining part of the decommissioned fixed asset was credited as scrap metal and subsequently sold to an enterprise for the procurement, processing and shipment of scrap and waste of ferrous metals.1. Is the Company obliged in this specific situation recover VAT from the residual value of the decommissioned fixed asset.2. Does the Company have the right to take into account the amount of restored VAT from the residual value of the decommissioned fixed asset in expenses that reduce tax base on income tax.
In connection with the letters on the restoration of value added tax and the application of corporate income tax upon disposal of property in the situation and under the conditions set forth in the letter, we inform you that, in accordance with the Regulations on the Department of Tax and Customs Tariff Policy, approved by order of the Ministry of Finance of Russia dated 11 July 2005, No. 169, the appeals of organizations assessing specific business situations are not considered in the Department and consulting services are not provided. presented to the taxpayer upon acquisition in the territory Russian Federation goods (works, services) used to carry out transactions subject to value added tax. On the basis of paragraphs 2 and 3 of Article 170 of the Code, value added tax is subject to recovery in cases where the purchased goods (works, services), including fixed assets , are not used in activities subject to value added tax. Thus, the tax amounts that were previously legally deductible on a partially depreciated fixed asset, in relation to its part, which is credited to the warehouse as scrap and is sold using the exemption established by subparagraph 25 of paragraph 2 articles 149 of the Code are subject to restoration. At the same time, it should be borne in mind that in relation to fixed assets (part of a fixed asset), tax amounts are subject to recovery in the amount proportional to the residual (book) value, excluding revaluation. As for accounting for the recovered amounts of value added tax, then on the basis of subparagraph 2 of paragraph 3 Article 170 of the Code, the indicated amounts of value added tax are accounted for as other expenses in accordance with Article 264 of Chapter 25 "Corporate Profit Tax" of the Code. This letter does not contain legal norms or general rules specifying normative prescriptions, and is not a normative legal act. In accordance with
LETTER OF THE MINISTRY OF FINANCE OF RUSSIA DATED 15.01.2015 No. 03-07-11/422
On the recovery of VAT upon the sale of a fixed asset
In connection with the letter on the issue of restoring value added tax on the sale of fixed assets, the Department of Tax and Customs Tariff Policy informs. According to subparagraph 1 of paragraph 1 of Article 146 of the Tax Code of the Russian Federation (hereinafter referred to as the Code), one of the objects of taxation with value added tax is recognized as operations for the sale of goods in the territory of the Russian Federation. On the basis of paragraph 2 of Article 171 of the Code, amounts of value added tax on goods are subject to deductions (works, services) acquired for carrying out transactions subject to taxation by this tax. In accordance with subparagraph 2 of paragraph 3 of Article 170 of the Code, the amounts of value added tax previously accepted for deduction by the taxpayer for goods, including fixed assets, in the manner prescribed by the Code, are subject to recovery in the event of further use of such goods, including fixed assets, for tax-free transactions. Considering the foregoing, when carrying out an operation to sell a fixed asset subject to value added tax, the amount of tax previously accepted for the deduction by the taxpayer for this fixed asset in the manner prescribed by the Code should not be restored. This letter does not contain legal norms or general rules specifying regulatory requirements, and is not a regulatory legal act. In accordance with the letter of the Ministry of Finance of Russia dated 07.08.2007 No. 03-02-07 / 2-138, the sent letter is of an informational and explanatory nature on the application of the legislation of the Russian Federation on taxes and fees and does not prevent one from being guided by the norms of the legislation on taxes and fees in the understanding, different from the interpretation set forth in this letter.
Fixed assets are written off in accounting gradually, and sometimes fail or become unnecessary even before the end of the depreciation period. In this case, according to the Ministry of Finance, the "input" VAT, previously accepted for deduction, must be restored. At least in the part in which the OS has not served its purpose. But is it really so?
When acquiring fixed assets intended for operations subject to VAT, the "input" tax on them is deductible (subclause 1, clause 2, article 171 of the Tax Code of the Russian Federation). But if the taxpayer liquidates (dismantles) the fixed asset, it means that it will no longer be used in VAT-taxable transactions. If the term beneficial use The OS has expired by this point and the fixed asset is depreciated, there will be no problems. The OS has served its purpose - and the deduction of the "input" VAT is justified in full. Otherwise, the tax previously accepted for deduction, according to the Ministry of Finance, must be restored in the part that falls on the residual value of the fixed assets (clause 2, clause 2, clause 3 of article 170 of the Tax Code, Letters of the Ministry of Finance dated February 17, 2016 N 03 -07-11/8736 , March 18, 2011 N 03-07-11/61). The amount of VAT to be restored is calculated according to the formula and taken into account in other expenses at the date of restoration (clause 1, clause 7, article 272 of the Tax Code, Letter of the Ministry of Finance dated May 4, 2016 N 03-07-11 / 25579):
The amount of VAT recoverable on the liquidated fixed assets = The amount of VAT previously accepted for deduction on fixed assets x residual value Fixed assets (according to accounting data, excluding revaluation) as of the date of approval of the asset write-off act / Initial cost of fixed assets (according to accounting data, excluding revaluation).
Example. The initial cost of the fixed asset, according to accounting data, is 300,000 rubles. By decision of the commission, the OS is written off due to obsolescence. Amount accrued linear way(method) depreciation, according to accounting data, is 120,000 rubles. When acquiring fixed assets, VAT in the amount of 54,000 rubles was accepted for deduction.
The amount of VAT recoverable will be:
54 000 rub. x (300,000 rubles - 120,000 rubles) / 300,000 rubles = 32,400 rubles.
Given the position of the Ministry of Finance, this is the safest option for those who want to exclude any disputes with the inspection. But another way is also possible.
Not the case
The list of cases when VAT is subject to recovery is given in paragraph 3 of Art. 170 of the Tax Code. Among other things, the basis for VAT recovery is the further use of goods (works, services), including fixed assets and intangible assets, for the operations specified in paragraph 2 of Art. 170 of the Code, to which, as a rule, officials refer. This norm just lists transactions that are not subject to VAT, namely:
Operations not subject to or exempt from VAT (clause 1 clause 2 article 170 of the Tax Code);
In which the territory of the Russian Federation is not a place of sale (clause 2, clause 2, article 170 of the Tax Code);
Within the framework of activities exempted from VAT in connection with the application (subclause 3, clause 2, article 170 of the Tax Code);
Not recognized by the implementation (clause 4, clause 2, article 170 of the Tax Code).
But the fact is that when an OS object is liquidated, it ceases to be used in principle, and not only in transactions subject to VAT. And this means that in the listed operations it is not used further. Therefore, this basis for the restoration of tax in such a situation is not suitable. At the same time, the Tax Code does not contain a requirement to restore VAT on fixed assets written off before the expiration of their useful life. And the list of such cases in the Code is actually exhaustive. So, if the property is liquidated and it can no longer be used, then there is no need to restore VAT. This has been repeatedly noted by the courts (clause 3 of article 170 of the Tax Code, Decision of the Supreme Arbitration Court of May 19, 2011 N 3943/11, Resolution of the AC of the North Caucasus District of October 29, 2014 N A53-17381 / 2013, FAS of the West Siberian district dated June 26, 2014 N A27-10310 / 2013, FAS of the Moscow district dated March 23, 2012 N A40-51601 / 11-129-222).
The judges point out that the fact of retirement of fixed assets from circulation by itself is not enough to restore VAT. Based on paragraphs. 2 p. 3 art. 170 of the Tax Code, in this case, the fact of using this fixed asset in transactions that are not subject to taxation must be proved (Resolution of the Central Administrative District of February 24, 2016 N A09-4959 / 2015).
But what if, during the dismantling of the OS, ferrous and non-ferrous scrap was formed, which the taxpayer sells?
There is no reception against scrap?
The sale of non-ferrous metal scrap and waste on the territory of the Russian Federation is not subject to VAT (clause 25 clause 2 article 149 of the Tax Code). Thus, in the case of the sale of such scrap formed during the dismantling of fixed assets, the position of the Ministry of Finance on the further use of the fixed asset in VAT-free operations plays with new colors. In particular, in Letter No. 03-07-11/25579 dated May 4, 2016, the officials indicated that VAT, previously deductible on partially depreciated fixed assets, is subject to recovery in the part that comes to the warehouse as scrap and is sold using exemption from VAT.
However, firstly, in the situation under consideration, the taxpayer does not sell the OS itself, but the scrap metal left during its dismantling. Secondly, this scrap metal is not a specially manufactured product and an independent product. The taxpayer purchased fixed assets that were used in VATable activities, and upon dismantling received metal parts originally purchased as part of fixed assets. Therefore, it is not necessary to restore the VAT previously accepted for deduction when writing off an under-depreciated fixed asset, even if the organization sells ferrous and non-ferrous scrap metal formed during the dismantling of this OS. This is how the judges argue (Resolutions of the FAS of the North-Western District of March 21, 2013 N A44-5530 / 2012, FAS of the West Siberian District of April 1, 2013 N A27-15357 / 2012).
However, it should be borne in mind that such an approach is not applicable if, before being sold as scrap, the property, in fact, was not accepted for accounting as fixed assets or was used in activities subject to VAT. The judges of the Arbitration Court of the Volga-Vyatka District, in Resolution No. Ф01-649/2015 of March 23, 2015, considered that in this case the VAT is subject to recovery. And by the Ruling of the Supreme Court of July 17, 2015 N 301-KG15-7324, the transfer of this case for review was refused.
An organization may write off a fixed asset from the balance sheet before the property is fully depreciated. Since such property will no longer be used in the activities of the taxpayer, the question arises whether it is necessary to restore VAT that was previously deductible. The Russian Ministry of Finance responded in a letter.
According to the financial department, an organization that has written off a fixed asset before the expiration of its useful life should restore the tax. This is due to the fact that VAT amounts are accepted for deduction on goods (works, services) that are used in activities subject to VAT ().
Since the underdepreciated fixed asset is not used by the taxpayer for transactions subject to VAT, the "input" tax on the basis must be restored.
The Ministry of Finance of Russia gave similar explanations earlier (see letter). However, this position is not indisputable. Thus, there are a number of court decisions recognizing the organization's right not to recover VAT in this situation (see Resolution of the Federal Antimonopoly Service of the Moscow District dated March 23, 2012 No. A40-51601 / 11-129-222).
For more information about VAT recovery when writing off underdepreciated fixed assets, see.
VAT deduction on fixed assets or equipment purchased for use in economic activity permitted by the Tax Code of the Russian Federation in full. However, for the application of the VAT deduction on fixed assets, the legislation provides for a number of conditions. Consider the basic rules and nuances of application tax deduction in various cases.
Moment of deducting VAT on fixed assets
The peculiarity of accepting a VAT deduction for fixed assets lies in the correct determination of the moment of this operation. One of the conditions for presenting tax for deduction, in accordance with paragraph 1 of Art. 172 of the Tax Code of the Russian Federation, is the acceptance of an object for accounting as a fixed asset. But in the Tax Code of the Russian Federation there are no clear characteristics on the basis of which an object can be taken into account as a fixed asset. Therefore, the question of the moment of deduction is not unambiguous.
Thus, initially the regulatory authorities insisted that when purchasing fixed assets, VAT deduction is possible only after the property is reflected on account 01 “Fixed Assets” (see, for example, letters of the Ministry of Finance of the Russian Federation dated February 12, 2015 No. 03-07-11 / 6141, dated January 24 .2013 No. 03-07-11/19). Later, the position of the Ministry of Finance changed - see "Deduction for fixed assets on account 08 is not a problem." Now officials consider it possible to accept VAT for deduction within 3 years after setting it on account 08 (letter of the Ministry of Finance dated 11.04.2017 No. 03-07-11 / 21548).
Judicial practice proceeds from the fact that the account to which the fixed assets are taken into account does not matter. The thing is that in accounting, acquired property goes through several stages of reflection in accounting before becoming a fixed asset. Property purchase transactions are initially recorded on account 08 “Investments in non-current assets”. The transfer of an object to account 01 is carried out only after its complete formation original cost. Therefore, if the taxpayer decides to receive a deduction for fixed assets placed on account 08, then there is a possibility of a dispute with the tax authorities. However, there are good chances to defend your point of view in court.
VAT deduction on fixed assets that do not require installation
The objects acquired by the enterprise can be immediately suitable for use in production activities and do not require assembly or installation. In this case, the deduction of VAT on fixed assets is carried out in the period of registration of the object.
VAT deduction on fixed assets requiring installation
For objects that require installation to bring them into working condition, the legislation allows deducting tax paid to third-party organizations that perform assembly or installation of objects, as well as suppliers of equipment and materials used in installation and assembly work. This is clearly stated in paragraph 6 of Art. 171 of the Tax Code of the Russian Federation.
Assets requiring installation and assembly are initially accepted in accounting on account 07 “Equipment for installation” with further debiting to account 08 as the equipment is transferred for installation. Posting to account 01 occurs only after the complete readiness of the mounted objects for use. In this case, it is allowed to deduct "input" VAT already at the time the object is reflected on account 07 (letter of the Ministry of Finance of Russia dated January 29, 2010 No. 03-07-08/20).
VAT deduction on fixed assets subject to state registration
Fixed assets subject to state registration deserve special attention: buildings, structures, etc. real estate. As noted above, one of the conditions for obtaining a VAT deduction for fixed assets is the registration of these objects and documentary evidence of this fact, as referred to in paragraph 1 of Art. 172 of the Tax Code of the Russian Federation. A signed act of transfer and acceptance serves as confirmation of the registration of such objects. VAT deduction can be declared in the period of signing the relevant act and not wait for state registration.
When there is no right to deduct VAT on fixed assets
The amounts of "input" VAT are not deductible, but are included in the cost of fixed assets if such items are acquired for operations (clause 2, article 170 of the Tax Code of the Russian Federation):
- not recognized as a sale in accordance with paragraph 2 of Art. 146 of the Tax Code of the Russian Federation;
- carried out outside the territory of the Russian Federation;
- exempt or not subject to VAT;
- carried out by persons who are exempt or who are not tax payers.
With the simultaneous implementation of both taxable transactions and those exempted from the calculation and payment of tax, the enterprise deducts VAT on fixed assets in proportion to the use of acquired objects in these transactions in accordance with paragraph 4 of Art. 170 of the Tax Code of the Russian Federation. The specified proportion is determined on the basis of the value of shipped goods (works, services), property rights, transactions for the sale of which are subject to taxation (exempted from taxation), in the total cost of goods (works, services), property rights shipped during the tax period.
At the same time, the taxpayer is obliged to keep separate accounting of the amounts of tax on acquired fixed assets used to carry out both taxable and non-taxable (tax-exempt) operations.
If the taxpayer does not have separate accounting, the amount of tax on acquired fixed assets is not subject to deduction.
The taxpayer has the right not to apply these rules in those tax periods, in which the share of total production costs non-taxable VAT goods (works, services), property rights does not exceed 5 percent of the total amount of total production costs. In this case, all amounts of "input" tax are deductible.
Results
So, in the event that the fixed asset is acquired for an activity subject to VAT, and there is an invoice with VAT allocated, the deduction is made as follows:
- For fixed assets that do not require installation and assembly work, the deduction is made in the period when the object is registered as a fixed asset. It may well be declared in the period of registration on account 08. In the event of a dispute, you can defend your position in court.
- For fixed assets requiring installation, VAT deduction can be made already in the period the object is reflected on account 07.
- For fixed assets requiring state registration, the deduction can be declared already in the period of signing the act of acceptance and transfer of property, without waiting for state registration.
Taxpayers often have to withdraw from circulation and even dispose of property that has become unusable due to the expiration date, moral and physical wear and tear, theft, destruction and other similar reasons.
The write-off of unsuitable for further use or lost fixed assets is carried out in accordance with paragraph 29 of the Regulation on accounting"Accounting for fixed assets" PBU 6/01, approved by Order of the Ministry of Finance of Russia dated 30.03.2001 N 26n. In relation to inventory items, clause 124 of the Methodological Guidelines for Accounting for Inventories, approved by Order of the Ministry of Finance of Russia dated December 28, 2001 N 119n, is applied.
Along with the write-off of property, the question arises: is it necessary to restore the “input” VAT on it, which was previously accepted for deduction?
This issue is controversial. The list of VAT recovery cases is given in paragraph 3 of Art. 170 of the Tax Code of the Russian Federation and is exhaustive. It does not contain such grounds for the restoration of the tax as destruction, damage, theft of property, etc. According to some experts and a number of courts, there is no need to restore VAT on the above grounds. But the opinion of officials is different. Namely, the need to restore VAT depends on the reason for the write-off of property.
When officials demand to restore VAT
According to officials, based on the norms of paragraph 2 of paragraph 3 of Art. 170 of the Tax Code of the Russian Federation, when writing off fixed assets and inventories in connection with obsolescence, unsuitability, shortage, etc., during the write-off period of this property, VAT should be restored that was previously legally deductible (Letters of the Ministry of Finance of Russia dated 05.07.2011 N 03-03-06 / 1/397, dated 04.07.2011 N 03- 03-06/1/387, Federal Tax Service of Russia for Moscow dated 11/25/2009 N 16-15/123920.1).
Note:
If VAT is restored, but later it turned out that the property could be used for taxable transactions (for example, the stolen property was returned), then, according to the Russian Ministry of Finance, an updated tax return for the period in which VAT was restored (Letter dated 01.11.2007 N 03-07-15/175).
When VAT can not be recovered
According to the opinion of the Ministry of Finance of Russia, set out in the Letter of 08.23.2013 N 03-07-11 / 34617, previously deductible VAT does not need to be restored if the following conditions are met at the same time:
- the purpose of writing off and destroying low-quality products is to ensure the safety of production and subsequent sale of high-quality products;
- write-off and destruction of substandard products are carried out by decision of the authorities.
This clarification of the financial department refers to VAT, previously accepted for deduction on products destroyed in order to prevent the threat of the emergence and spread of contagious animal diseases. According to experts, this approach can also be used in other situations when it becomes necessary to destroy products of other hazardous industries (for example, the chemical or nuclear industry).
VAT recovery courts
On this issue, there is the Decision of the Supreme Arbitration Court of the Russian Federation of October 23, 2006 N 10652/06, in which the Supreme Court declared illegal the explanation of the Federal Tax Service on the restoration of VAT in the event of a shortage of goods (Letter of the Federal Tax Service of Russia of October 19, 2005 N MM-6-03 / [email protected]). The Supreme Arbitration Court of the Russian Federation established that the shortage of goods discovered during the inventory of property, as well as theft of goods, do not apply to the cases listed in paragraph 3 of Art. 170 of the Tax Code of the Russian Federation.
The position of the Supreme Arbitration Court of the Russian Federation is shared by the subordinate arbitration courts. For example, the Federal Antimonopoly Service of the Moscow District in the Decree of December 25, 2013 N F05-16440 / 2013, the Federal Antimonopoly Service of the West Siberian District in the Decree of July 18, 2012 N A45-15075 / 201, the FAS of the Far Eastern District in the Resolution of November 2, 2011 N F03-4834 / 2011
It should be noted that prior to the issuance of this Decision of the Supreme Arbitration Court of the Russian Federation, judgments in support of the position tax authorities(for example, Resolution of the Federal Antimonopoly Service of the North Caucasus District dated April 28, 2006 N F08-1521 / 2006-644A).