How to calculate interest on controlled debt. Debt Controlled: Loan Interest Accounting
Interdependence
According to paragraphs. 1 p. 2 art. 269 of the Tax Code of the Russian Federation, controlled debt will be recognized as a debt of a Russian organization under a debt obligation to a foreign person who is an interdependent person of a Russian organization in accordance with paragraphs. 1, 2 or 9 p. 2 of Art. 105.1 of the Tax Code of the Russian Federation, if such a foreign person directly or indirectly participates in a Russian organization that has a debt obligation to this foreign person.According to the specified provisions of Art. 105.1 of the Tax Code of the Russian Federation, interdependent persons are:
- organizations in the event that one organization directly and (or) indirectly participates in another organization and the share of such participation is more than 25% (clause 1, clause 2 of article 105.1 of the Tax Code of the Russian Federation);
- an individual and an organization if such an individual directly and (or) indirectly participates in such an organization and the share of such participation is more than 25% (subparagraph 2 of paragraph 2 of article 105.1 of the Tax Code of the Russian Federation);
- organizations and (or) individuals in the event that the share of direct participation of each previous person in each subsequent organization is more than 50% (clause 9, clause 2 of article 105.1 of the Tax Code of the Russian Federation).
The foreign organization has an agreement with Organization A. In this case, the foreign organization belongs to:
- 50% of Entity B, which owns 16% of Entity A;
- 60% of Entity B, which owns 20% of Entity A;
- 10% of Organization D, which owns 70% of Organization A.
- through Organization B - 8% (0.5 x 0.16 x 100%);
- through Organization B - 12% (0.6 x 0.2 x 100%);
- through Organization G - 7% (0.1 x 0.7 x 100%).
Thus, the foreign entity indirectly owns 27% of Entity A, which is more than 25%.
Consequently, Foreign Organization and Organization A for the purposes of applying the Tax Code are recognized as interdependent.
Debt obligation of Organization A to a Foreign Organization will be considered a controlled debt for the purposes of applying Art. 269 of the Tax Code of the Russian Federation.
Debt comparability
From the rule provided for in paragraphs. 2 p. 2 art. 269 of the Tax Code of the Russian Federation, there is an exception. It is contained in paragraph 8 of Art. 269 of the Tax Code of the Russian Federation. According to this provision, outstanding debt is not recognized as controlled debt if the following conditions are met:- the debt obligation arose before a Russian organization or an individual who are tax residents of the Russian Federation during the entire reporting (tax) period and are recognized as interdependent persons of a foreign person on the basis of paragraphs. 1, 2, 3 or 9 p. 2 of Art. 105.1 of the Tax Code of the Russian Federation;
- a Russian organization or an individual to whom a debt obligation has arisen during the reporting (tax) period does not have outstanding debts for comparable debt obligations to a foreign person specified in paragraphs. 1 and (or) pp. 2 p. 2 art. 269 of the Tax Code of the Russian Federation.
In addition, paragraph 8 of Art. 269 of the Tax Code of the Russian Federation is applied taking into account the specifics provided for in paragraph 11 of Art. 269 of the Tax Code of the Russian Federation.
This provision of the Code prescribes the rules for determining the comparability of debt obligations. The rules are as follows:
- To determine the comparability of debt obligations, the total amount of these obligations and the period for which they are granted are taken into account.
- If there are several debt obligations under transactions concluded with a foreign person, to determine the total amount of debt obligations, the amounts of such obligations are summed up.
- If the currency of a debt obligation to a foreign person differs from the currency of the debt obligation with which the comparison is made, the debt obligations are reduced to a single currency at the exchange rate of the Bank of Russia at the date of the debt obligation to the creditor.
- If the period for which the debt obligation of the Russian organization is provided does not exceed the period for which the outstanding debt on the debt obligation to a foreign person arose, such periods are considered comparable.
Surety
In accordance with paragraphs. 3 p. 2 art. 269 of the Tax Code of the Russian Federation, the debt will be recognized as controlled under a debt obligation under which the aforementioned foreign person and (or) his related person act as a surety, guarantor or otherwise undertake to ensure the fulfillment of this debt obligation of a taxpayer - a Russian organization. This rule will not work if the following conditions are met simultaneously (clause 9 of article 269 of the Tax Code of the Russian Federation):- the debt obligation has arisen before an organization that is a bank (including organizations recognized by banks in accordance with the legislation of foreign states), which is not recognized as an interdependent person with both a Russian organization and persons acting as a surety, guarantor or otherwise undertaking to fulfill the taxpayer's debt obligation;
- from the moment the taxpayer's debt obligation arises, there has been no termination (performance) of the specified debt obligation both in terms of the amount of the principal debt and in terms of the payment of interest by a foreign person and (or) his related person acting as a surety, guarantor or otherwise undertaking to ensure the fulfillment of the specified debt obligations.
Rules for determining the maximum amount of interest
From 2017, the procedure for determining the maximum amount of interest on controlled debt, accounted for for profit tax purposes, will be established in clauses 3 - 6 of Art. 269 of the Tax Code of the Russian Federation.Special procedure for accounting for interest
A special procedure for accounting for interest will be applied if the amount of controlled debt of a taxpayer is more than three times (for banks and organizations engaged in leasing activities - more than 12.5 times) exceeds the difference between the amount of assets and the amount of liabilities of this taxpayer by the last number of the reporting (tax) period.According to paragraph 3 of Art. 269 of the Tax Code of the Russian Federation states that an organization engaged in leasing activities is an organization in which, in the reporting (tax) period, for the last date of which the maximum amount of interest to be included in expenses is calculated, income from leasing activities taken into account when determining the tax base, make up at least 90% of all taxable income for the specified reporting (tax) period.
In addition, when determining the size of a taxpayer's controlled debt, the amount of controlled debt arising from all the obligations of this taxpayer specified in paragraph 2 of Art. 269 of the Tax Code of the Russian Federation, in aggregate.
Calculation of limit percentages
The rules for calculating the maximum interest will be established in paragraph 4 of Art. 269 of the Tax Code of the Russian Federation, but the calculation formula itself remains the same:The maximum interest rate is determined by the last day of each reporting (tax) period by dividing the amount of interest accrued by the taxpayer in each reporting (tax) period on controlled debt by the capitalization ratio calculated as of the last reporting date of the corresponding reporting (tax) period.
From the next year, the capitalization ratio is calculated by dividing the amount of the corresponding outstanding controlled debt by the amount of equity capital corresponding to the participation interest of the related foreign entity specified in paragraphs. 1 p. 2 art. 269 of the Tax Code of the Russian Federation, in a Russian organization, and dividing the result by three (for banks and organizations engaged in leasing activities - by 12.5).
In this case, equity capital is understood as the difference between the amount of assets and the amount of the taxpayer's liabilities.
When calculating the amount of equity capital, the amount of debt liabilities in the form of tax and levy arrears is not taken into account, including current arrears in taxes and levies, the amount of deferrals, installments and an investment tax credit.
In addition, since 2017, in the event of a change in the capitalization ratio in the subsequent reporting period or based on the results of the tax period compared to previous reporting periods, the maximum interest rate to be included in expenses on controlled debt for the previous reporting period is not subject to change.
Dividend
Starting next year, the positive difference between accrued interest and marginal interest, as now, is equated to dividends, but is taxed either under paragraph 3 of Art. 224 of the Tax Code of the Russian Federation, or according to clause 3 of Art. 284 of the Tax Code of the Russian Federation (at present, the difference is taxed according to clause 3 of Art. 284 of the Tax Code of the Russian Federation).So, according to paragraphs. 3 clause 3 of Article 284 of the Tax Code of the Russian Federation for taxation of income received by a foreign organization in the form of dividends, a 15% rate is provided.
Under the new rules of Art. 269 of the Tax Code of the Russian Federation, the specified foreign person will also be understood as a foreign individual.
When paid to a foreigner who is not a tax resident who has received dividends from equity participation in the activities of Russian organizations, taxation will be made in accordance with paragraph 3 of Art. 224 of the Tax Code of the Russian Federation at a rate of 15%.
However, the legislators say that a foreigner, like a citizen of the Russian Federation, for the purpose of calculating personal income tax, may turn out to be a resident of the Russian Federation.
And in paragraph 3 of Art. 224 only indicates which rate to apply to a foreigner, non-tax resident, which received dividends from equity participation in the activities of Russian organizations (15%).
Therefore, it remains unclear what rate in this case should be applied to interest-dividends paid to a foreigner who is a tax resident of the Russian Federation.
Transition period
From January 1 to December 31, 2016 the outstanding debt specified in paragraph 2 of Art. 269 of the Tax Code of the Russian Federation, is not recognized as a controlled debt if two conditions are met simultaneously.- the debt obligation has arisen before a bank (including a foreign bank), which is not recognized as an interdependent person with both a Russian organization and persons acting as a surety, guarantor or otherwise undertaking to fulfill the taxpayer's debt obligation.
- from the moment the taxpayer's debt obligation arose, there was no termination (performance) of the specified debt obligation both in terms of the amount of the principal debt and in terms of the payment of interest by a foreign organization specified in paragraph 2 of Art. 269 of the Tax Code of the Russian Federation, and (or) an affiliate of this foreign organization, acting as a surety, guarantor or otherwise undertaking to ensure the fulfillment of this debt obligation.
As of September 30, 2017, the organization has not repaid two loans from a foreign company with a 50% stake in its authorized capital, in the amount of RUB 500,000 and RUB 700,000.
In the third quarter of 2017, interest was accrued on these loans in the amount of RUB 20,000.
The indicator of line 1300 of the balance sheet as of September 30, 2017 is 50,000 rubles, and the credit balance for account 68 "Calculations for taxes and fees" is 100,000 rubles.
The amount of controlled debt will be 1,200,000 rubles. (RUB 500,000 + RUB 700,000).
The organization's equity capital is 150,000 rubles. (50,000 rubles + 100,000 rubles).
The ratio of controlled debt to equity capital is 8 (RUB 1,200,000 / RUB 150,000).
Accordingly, interest on controlled debt is included in tax expenses at the rate.
The capitalization ratio is 5.33 (RUB 1,200,000 / (RUB 150,000 x 0.5) / 3).
The maximum amount of interest is 3752.35 rubles. (20,000 rubles / 5.33), which is less than the actually accrued amount (3752.35 rubles.< 20 000 руб.).
Consequently, only RUB 3,752.35 can be taken into account in tax expenses in the third quarter of 2017.
The remaining 16,247.65 (20,000 rubles - 3,752.35 rubles) are not included in expenses and are recognized as dividends.
For various reasons, incl. lack of own funds, companies resort to borrowing. These borrowings can be in various forms, for example, in the form of loans and borrowings, commodity and commercial loans. Under certain conditions, when foreign companies participate in the borrowings of a Russian organization, controlled debt arises, the accounting of expenses for which for profit tax purposes is carried out according to special rules.
What is controlled debt to a foreign person?
Controlled debt is the outstanding debt of a Russian organization under its promissory note (clause 2 of article 269 of the Tax Code of the Russian Federation):
1) in front of a foreign person interdependent with her in accordance with paragraphs. 1, 2, 9 p. 2 Art. 105.1 of the Tax Code of the Russian Federation;
2) in front of a person who, in accordance with paragraphs. 1 - 3, 9 p. 2 Art. 105.1 of the Tax Code of the Russian Federation is interdependent in relation to the foreigner specified in clause 1 (the exception is provided for in clause 8 of article 269 of the Tax Code of the Russian Federation, subject to the requirements of clause 10 of article 269 of the Tax Code of the Russian Federation);
3) to other persons, but under this obligation, any of the persons specified in clause 1 and (or) clause 2 acts as a surety, guarantor or otherwise ensures its execution (the exception is provided for in clause 9 of article 269 of the Tax Code of the Russian Federation, subject to the requirements Clause 10 of Art.269 of the Tax Code of the Russian Federation).
How is interest on controlled debt accounted for?
In order to answer this question, it is necessary to compare the last number of the borrower's own capital (that is, the difference between assets and liabilities according to accounting data) and the amount of controlled debt. It should be borne in mind that when calculating equity capital, liabilities do not take into account the amount of debt on taxes and fees, incl. current debt on payment of taxes and fees, the amount of deferrals, installments and an investment tax credit (Letter of the Ministry of Finance dated December 27, 2017 No. 03-03-06 / 1/87340 (p. 1)).
If the amount of equity capital turns out to be negative or equal to zero, then the interest on the loan is not taken into account at all as part of "profitable" expenses, but is equated to dividends (Letters of the Ministry of Finance of 06/26/2017 N 03-08-05 / 40069, of 08/10/2016 N 03 -03-06 / 1/46720). When paying them, it is necessary to withhold income tax and transfer it to the budget as a tax agent (clause 3 of article 284, clause 2 of article 310 of the Tax Code of the Russian Federation).
If the controlled debt does not exceed equity capital or exceeds it, but no more than 3 times (for banks and leasing companies - no more than 12.5 times), then the accountant uses the general rules for accounting for interest (clause 1 of Art.269 Tax Code of the Russian Federation) - actually accrued interest can be taken into account in expenses. Otherwise, a special procedure applies.
Special Procedure: 3 Steps to Accounting for Interest
On the last day of each reporting (tax) period for controlled debt, which exceeds more than 3 times the organization's own capital, the accountant needs to perform the following actions.
Step 1: Find the amount of equity capital, which corresponds to the share of direct or indirect participation of a foreign organization in the authorized capital of the borrower (SK e).
1. For the purposes of this chapter, debt obligations are understood as loans, commodity and commercial loans, loans, bank deposits, bank accounts or other borrowings, regardless of the method of their registration.
On debt obligations of any kind, income (expense) is recognized as interest calculated on the basis of the actual rate, unless otherwise provided by this article.
For debt obligations of any type arising from transactions recognized in accordance with this Code as controlled transactions, income (expense) is the percentage calculated based on the actual rate, taking into account the provisions of Section V.1 of this Code, unless otherwise provided by this Article.
1.1. For a debt obligation arising as a result of a transaction recognized in accordance with this Code as a controlled transaction, the taxpayer has the right to:
(see text in previous edition)
to recognize as income the interest calculated on the basis of the actual rate on such debt obligations, if this rate exceeds the minimum value of the range of limit values established by paragraph 1.2 of this article;
to recognize as an expense the interest calculated on the basis of the actual rate on such debt obligations, if this rate is less than the maximum value of the interval of limit values established by paragraph 1.2 of this article.
If the conditions established by paragraphs one - three of this clause are not met, for debt obligations arising as a result of transactions recognized in accordance with this Code as controlled transactions, income (expense) is the percentage calculated based on the actual rate, taking into account the provisions of Section V.1 of this Of the Code.
(see text in previous edition)
(see text in previous edition)
2. For the purposes of this article, controlled debt is the outstanding debt of a taxpayer - a Russian organization for the following debt obligations of this taxpayer (unless otherwise provided by this article):
1) under a debt obligation to a foreign person who is an interdependent person of a taxpayer - a Russian organization in accordance with subparagraph 1 or 9 of paragraph 2 of Article 105.1 of this Code, if such a foreign person directly or indirectly participates in a taxpayer - a Russian organization specified in paragraph one of this item;
3) under a promissory note in which the foreign person specified in subparagraph 1 of this paragraph and (or) its related person specified in subparagraph 2 of this paragraph act as a surety, guarantor or otherwise undertake to ensure the fulfillment of this debt obligation of a taxpayer - a Russian organization unless otherwise provided by paragraph 9 of this article.
(see text in previous edition)
3. In the event that the amount of controlled debt of a taxpayer is more than 3 times (for banks and organizations engaged in leasing activities - more than 12.5 times) exceeds the difference between the amount of assets and the amount of liabilities of this taxpayer (hereinafter in this article - equity) as of the last day of the reporting (tax) period, when determining the maximum amount of interest to be included in the expenses of this taxpayer, the rules established by paragraphs 4 of this article are applied. When determining the amount of controlled debt of a taxpayer for the purposes of this article, the amount of controlled debt arising from all the obligations of this taxpayer specified in paragraph 2 of this article shall be taken into account in aggregate.
For the purposes of this article, an organization engaged in leasing activities is an organization in which, in the reporting (tax) period, on the last date of which the maximum amount of interest to be included in expenses is determined, income from leasing activities, taken into account when determining the tax base in accordance with with this chapter, constitute at least 90 percent of all income taken into account when determining the tax base in accordance with this chapter for the specified reporting (tax) period.
(see text in previous edition)
4. The maximum amount of interest to be included in the composition of expenses on controlled debt is calculated by the taxpayer by the last day of each reporting (tax) period by dividing the amount of interest accrued by this taxpayer in each reporting (tax) period on controlled debt by the capitalization ratio calculated as of the last reporting date of the corresponding reporting (tax) period. At the same time, in the event of a change in the capitalization ratio in the subsequent reporting period or based on the results of the tax period in comparison with the previous reporting periods, the maximum amount of interest to be included in the composition of expenses on controlled debt for the previous reporting period is not subject to change.
The capitalization ratio for the purposes of this article is determined by dividing the amount of the corresponding outstanding controlled debt by the amount of equity capital corresponding to the share of participation of the interdependent foreign entity specified in subparagraph 1 of paragraph 2 of this article in a Russian organization, and dividing the result by 3 (for banks and organizations engaged in leasing activities - by 12.5).
When determining the amount of equity capital, the amount of debt liabilities in the form of tax and levy arrears, including current arrears in taxes and levies, the amount of deferrals, installments and an investment tax credit, are not taken into account.
(see text in previous edition)
5. The structure of expenses includes interest on controlled debt in an amount not exceeding the maximum amount of interest to be included in the composition of expenses calculated in accordance with paragraph 4 of this article, but not more than actually accrued interest.
In this case, the rules established by paragraph 4 of this article shall not apply to interest on borrowed funds, if the outstanding debt on the corresponding debt obligation is not controlled.
6. The positive difference between the accrued interest and the maximum interest calculated in accordance with paragraph 4 of this article is equated for tax purposes with dividends paid to the foreign person specified in subparagraph 1 of paragraph 2 of this article, and is taxed in accordance with the second paragraph of paragraph 3 Article 224 or paragraph 3 of Article 284 of this Code.
7. An outstanding debt under a debt obligation is not recognized for a taxpayer - a Russian organization as a controlled debt, if the calculation and withholding of the tax amount from the interest income of a foreign organization paid under such a debt obligation is not performed by the tax agent in accordance with subparagraph 8 of paragraph 2 of Article 310 of this Code ...
7.1. An outstanding debt on a promissory note is not recognized as a controlled debt for a taxpayer - a Russian organization, provided that the following conditions are met:
the monetary funds constituting the specified outstanding debt are directed exclusively to financing an investment project being implemented by a taxpayer on the territory of the Russian Federation;
the terms of the agreement, in accordance with which the debt obligation specified in this clause arose, provide for the commencement of the repayment of the amount of outstanding debt on such a debt obligation not earlier than five years after its occurrence;
the aggregate share of direct and indirect participation of an interdependent foreign person specified in subparagraph 1 of paragraph 2 of this article in a Russian organization does not exceed 35 percent;
the place of registration (place of tax residence) of the person to whom the debt obligation has arisen is a foreign state with which an agreement (agreement, convention) has been concluded for the avoidance of double taxation.
For the purposes of this clause, an investment project is the creation in the territory of the Russian Federation of a new production complex for the production of goods and (or) the provision of services. An industrial complex is recognized as new if it was put into operation after January 1, 2019 and was not previously in operation.
In the event of failure to fulfill one of the conditions established by this paragraph, the provisions of this article shall apply to the outstanding debt under the debt obligation specified in this paragraph without taking into account the provisions of this paragraph from the date of occurrence of the corresponding debt obligation.
8. The outstanding debt specified in subparagraph 2 of paragraph 2 of this article is not recognized as a controlled debt for a taxpayer - a Russian organization, provided that the following conditions are met (taking into account the specifics established by paragraph 11 of this article):
1) a debt obligation has arisen before a Russian organization or an individual who, in accordance with this Code, are tax residents of the Russian Federation during the entire reporting (tax) period and are recognized interdependent persons of a foreign person specified in subparagraph 1 of paragraph 2 of this article, on the basis of subparagraph 1 ,, or 9 paragraph 2 of Article 105.1 of this Code;
2) the Russian organization or individual, to whom the debt obligation arose, during the reporting (tax) period does not have outstanding debts for comparable debt obligations to a foreign person specified in
If the organization has a debt to a foreign company or an affiliated Russian company, then before reflecting in expenses the interest paid on this debt, it should be determined whether it is controlled. The fact is that interest on controlled debt is recognized in the income tax base within the limits of special rules. How to define these norms and in which case they should be applied, we propose to understand in detail.
The procedure for accounting for expenses in the form of interest on controlled debts to foreign organizations is provided for in paragraphs 2-4 of Art. 269 of the Tax Code of the Russian Federation. First, we will find out in which cases the debt will be controlled, then we will consider the general rules for calculating the maximum amount of expenses, and after that we will move on to some difficult situations related to accounting for interest.
What debt is recognized as controlled
According to paragraph 2 of Art. 269 of the Tax Code of the Russian Federation, a controlled debt is an outstanding debt of a Russian organization under a debt obligation:
To a foreign organization that directly or indirectly owns more than 20% of the authorized (pooled) capital (fund) of this Russian organization;
Before a Russian organization recognized in accordance with the law as an affiliate of the specified foreign organization;
In respect of which the affiliated person and (or) this foreign organization act as a surety, guarantor or otherwise undertake to ensure the fulfillment of the debt obligation of the Russian organization.
Please note that both direct and indirect interest is taken into account in determining whether a debt is controlled. And if everything is clear with direct participation, then the procedure for calculating the share of indirect participation may raise questions.
Recall that in order to calculate the share of indirect participation, it is necessary to determine (clause 3 of article 105.2 of the Tax Code of the Russian Federation):
All sequences of participation of one organization in another organization through the direct participation of each previous organization in each subsequent organization of the corresponding sequence;
Shares of direct participation of each previous organization in each subsequent organization of the corresponding sequence;
Sum up the products of the shares of direct participation of one organization in another organization through the participation of each previous organization in each subsequent organization of all sequences.
Example 1
Vesna LLC has outstanding debts to the foreign company Invest. The participants of Vesna LLC are an individual (70% share) and Zima LLC (30% share). Invest owns 40% of the authorized capital of Zima LLC. Let's find out whether the debt of Vesna LLC to Invest is controlled.
There is no direct participation of Invest in the authorized capital of Vesna LLC. Therefore, we will calculate the share of indirect participation.
The share of Invest's direct participation in the authorized capital of Zima LLC is 0.4. And the share of direct participation of Zima LLC in the authorized capital of Vesna LLC is 0.3. Multiplying these indicators, we get the share of Invest's indirect participation in the authorized capital of Vesna LLC, it is equal to 0.12 (0.4 x 0.3), or 12%. This is less than 20%, which means that the debt of Vesna LLC is not controllable.
How to determine the interest limit if the conditions are met
Interest expense paid on outstanding controlled debt is accounted for within normal limits. We will tell you how to calculate this rate further. But first, let us clarify that this procedure for determining the maximum amount of interest is applied only in the case when the controlled debt is more than three times (for banks, as well as organizations engaged exclusively in leasing activities - more than 12.5 times) exceeds the difference between the amount assets and the amount of the taxpayer's liabilities as of the last day of the reporting (tax) period.
So, if the specified conditions are met, then the following formula can be used to calculate the maximum amount of interest:
PP = NP: Kk,
where PP is the maximum amount of interest;
NP - the accrued amount of interest;
Кк - capitalization ratio.
In turn, the capitalization ratio is calculated as follows:
Kk = Z: (SK x D): 3,
where Z is the amount of outstanding controlled debt;
SK is the organization's own capital;
D - the share of a foreign company in the authorized capital.
This formula applies to all organizations except banks and leasing companies. Banks and leasing organizations calculate the capitalization ratio using the following formula:
Kk = Z: (SK x D): 12.5.
The company's equity (IC) can be calculated using the following formula:
SK = A - O + HC,
where A is the amount of assets;
О - the amount of obligations;
НС - debts on taxes and fees.
Please note that these indicators are taken from the financial statements for the last day of the reporting (tax) period. In addition, in determining the amount of arrears in taxes and fees, arrears in insurance contributions to extrabudgetary funds and in social security contributions in case of injuries are not taken into account. This is confirmed by the Ministry of Finance of Russia (letter dated 07.03.2013 No. 03-03-06 / 1/6908).
After the calculations of the limit value of interest, the amount of accrued interest that does not exceed this indicator can be taken into account in expenses. The amount in excess of the ceiling must be treated as dividends paid to the third party. They will be subject to income tax in accordance with paragraph 3 of Art. 284 of the Tax Code of the Russian Federation (clause 4 of Article 269 of the Tax Code of the Russian Federation). The same clarifications are contained, in particular, in the letters of the Ministry of Finance of Russia dated June 17, 2013 No. 03-03-06 / 1/22382 and dated January 28, 2013 No. 03-03-06 / 1/37.
Example 2
LLC Polet had, as of October 1, 2014, an outstanding debt to a foreign company in the amount of RUB 10,256,000. The amount of interest accrued on this debt for 92 days of using borrowed funds is 307,680 rubles. The share of a foreign company in the authorized capital of Polet LLC is 35%. The main activity is the production of furniture. The financial statements as of October 1, 2014 are as follows:
Amount of assets - RUB 25,300,800;
The amount of liabilities is 23,400,950 rubles, including the tax and levy arrears amounting to 423,400 rubles.
How much interest on a debt obligation to a foreign company can the organization take into account in expenses that reduce the tax base?
Since the share of a foreign company in the authorized capital of Polet LLC is more than 20%, the debt is controlled. Polet LLC is not a bank and does not engage in leasing activities, therefore, it is necessary to determine the maximum percentage based on the capitalization ratio, provided that the debt to a foreign company exceeds equity capital by more than three times.
Let's calculate the amount of equity capital.
SK = RUB 25,300,800 - 23 400 950 rubles. + 423 400 rub. = 2 323 250 rubles.
Now let's calculate the ratio of controlled debt to equity capital, we get 4.41 (10,256,000 rubles: 2,323,250 rubles). This is more than three, therefore, it is necessary to determine the maximum amount of interest, taking into account the capitalization ratio.
Кк = 10,256,000 rubles. : (2 323 250 rubles x 0.35): 3 = 4.204.
The maximum amount of interest expenses will be:
Pp = 307 680 rubles. : 4.204 = 73 187 rubles.
The organization has the right to reflect this amount in income tax expenses. Interest accrued to the foreign company in excess of this, in the amount of 234,493 rubles. (RUB 307,680 - RUB 73,187) will be treated as dividends paid to a foreign company. That is, when paying them, it will be necessary to withhold income tax and transfer it to the budget at a rate of 15% (clause 6 of article 275 and clause 3 of article 284 of the Tax Code of the Russian Federation).
How to account for interest if conditions are not met
If the amount of controlled debt does not exceed more than three times (for banks and leasing companies - more than 12.5 times) the organization's own capital, then the method for calculating the maximum percentage specified above does not apply. This is also confirmed by the Ministry of Finance of Russia (see letters dated 11.01.2012 No. 03-03-06 / 1/2 and dated 14.07.2010 No. 03-03-06 / 1/459). In this case, the limit value of interest should be calculated in accordance with paragraphs 1 and 1.1 of Art. 269 of the Tax Code of the Russian Federation. That is, the ceiling is calculated based on the average rate on debt obligations taken on comparable terms, or the refinancing rate of the Central Bank of the Russian Federation. The method of calculation depends on the accounting policy chosen and the existence of liabilities on comparable terms.
Recall that the method for calculating the maximum amount based on the average rate is applied if it is specified in the accounting policy and there are at least two obligations taken in the same quarter on comparable terms. In this case, the expenses include interest that does not deviate from the average level by more than 20%. The method of calculation based on the refinancing rate is used if it is specified in the accounting policy, or the organization does not have several obligations on comparable terms. Expenses reflect the amount of interest that does not exceed those calculated based on the refinancing rate of the Central Bank of the Russian Federation, increased by 1.8 times, if the liability is in rubles. For foreign exchange liabilities, the maximum amount of interest is calculated based on the refinancing rate of the Central Bank of the Russian Federation, multiplied by a coefficient of 0.8.
We emphasize once again that the new procedure applies to the case when the controlled debt does not exceed more than three (or 12.5 for banks and leasing organizations) times the amount of equity capital. If it exceeds, then the maximum percentage on controlled debt in 2015 will also be calculated taking into account the capitalization ratio (clause 2 of article 269 of the Tax Code of the Russian Federation).
For your information
Article 269 of the Tax Code of the Russian Federation, as amended, which will enter into force on January 1, 2015, deals with the calculation of the maximum amount of interest on controlled transactions and controlled debt. Note that these are different concepts. Transactions between related parties listed in Art. 105.14 of the Tax Code of the Russian Federation. A controlled debt will be a debt to a foreign company that owns a share in the authorized capital of the organization exceeding 20%, as well as in some other cases (clause 2 of article 269 of the Tax Code of the Russian Federation).
Example 3
Let's use the conditions of example 2, changing them. Suppose that the total assets of Polet LLC as of October 1, 2014 amounted to RUB 30,380,000. How to take into account the accrued interest on a debt obligation to a foreign company in expenses if the organization has no other debt obligations?
According to the condition, the debt to a foreign company is controlled (the company's share in the authorized capital is more than 20%). Equity capital as of October 1, 2014 is equal to:
SK = 30,380,000 rubles. - 23 400 950 rubles. + 423 400 rub. = RUB 7 402 450
Let's calculate the ratio between controlled debt and equity capital, we get 1.385 (10,256,000 rubles: 7,402,450 rubles). This is less than three, so the interest limit does not need to be calculated using the capitalization ratio.
Since LLC Polet has no other debt obligations, the maximum amount should be calculated based on the refinancing rate of the Central Bank of the Russian Federation (clause 1.1 of article 269 of the Tax Code of the Russian Federation). As a reminder, the refinancing rate of 8.25% has been in effect since September 14, 2012 (Bank of Russia directive No. 2873-U dated September 13, 2012). Therefore, the maximum amount of interest for 92 days of using borrowed funds will be 383,883 rubles. (10,256,000 rubles x 8.25%: 365 days x 92 days x 1.8). This is more than the actually accrued interest. Consequently, LLC Polet will be able to take into account the entire amount of accrued interest in expenses - 307,680 rubles.
Do you need to make adjustments if the share of a foreign company has changed at the end of the year
Consider this situation. At the beginning of the year, the share of a foreign company in the authorized capital of a Russian organization that is not engaged in leasing was more than 20%. The debt was recognized as controlled. Since the ratio of debt to authorized capital was more than three, the rules for calculating the maximum amount of interest using the capitalization ratio were applied in the first three reporting periods of the year. However, in October, the foreign company sold its stake. Question: how to account for the interest on a debt obligation to this company based on the results of the tax period (calendar year)?
In the first three reporting periods, the share of a foreign company was more than 20%, the ratio was met, therefore, the rules for calculating the maximum interest set for controlled debt (clause 2 of article 269 of the Tax Code of the Russian Federation) were applied. At the end of the year, the share of the foreign company in the authorized capital of the organization is zero. This means that the debt has ceased to be controlled. Consequently, the specified procedure for calculating the maximum amount of interest based on the results of the year does not apply.
The maximum amount of interest accrued for the IV quarter of 2014 should be determined in accordance with paragraphs 1 and 1.1 of Art. 269 of the Tax Code of the Russian Federation. That is, to calculate based on the average rate on debt obligations taken on comparable terms, or the refinancing rate, depending on the chosen accounting policy and the availability of obligations on comparable terms.
Note that if everything was done correctly, then there is no need to recalculate the expenses recorded in the reporting periods at the end of the year. This procedure is not provided for in paragraph 2-4 of Art. 269 of the Tax Code of the Russian Federation. The Ministry of Finance of Russia also agrees with this (letter dated 04/14/2010 No. 03-08-05).
The same approach is used in the case when, on the contrary, the share of the foreign company increased and the debt became controlled only by the end of the year. The procedure for calculating the maximum amount of interest specified in paragraph 2 of Art. 269 of the Tax Code of the Russian Federation, is applied only in those reporting (tax) periods at the end of which the debt was recognized as controlled and the required ratio was met. Otherwise, the maximum amount of interest should be calculated based on the refinancing rate of the Central Bank of the Russian Federation or the average rate. And there is no need to recalculate previously accounted expenses.
In addition, there is no need to recalculate the expenses reflected in the tax base if at the end of the year the debt to the foreign company has been paid off (letter of the Ministry of Finance of Russia dated 15.03.2010 No. 03-03-06 / 1/139). The courts are of the same opinion (decisions of the Federal Antimonopoly Service of the Moscow District of September 24, 2013 No. A40-88761 / 12-99-495 and of February 28, 2013 No. A40-65284 / 11-91-279).
How to account for expenses if there is no equity capital
To calculate the interest limit using the capitalization ratio, an organization's equity metric is required. But what if the amount of equity capital turned out to be zero or negative?
According to the Ministry of Finance of Russia (see letters dated 30.05.2011 No. 03-03-06 / 1/319 and dated 16.07.2010 No. 03-03-06 / 1/465), in this situation, the maximum interest is zero. Indeed, with a negative or zero value of equity capital, it is impossible to calculate the capitalization ratio. Accordingly, interest on controlled debt is not included in the expense. And the entire accrued amount is considered as dividends paid to the third-party company. In addition, some courts share the point of view of the financial department (ruling of the Eleventh Arbitration Court of Appeal dated June 10, 2013 No. A72-9214 / 2012).
Note that one should agree with the Ministry of Finance of Russia and the courts on this issue. Indeed, if the capitalization ratio cannot be calculated, then the maximum amount of interest and, accordingly, the amount of expenses taken into account will be equal to zero.
What to do if the ratio of controlled debt to equity changes during the year
Another situation. During the year, the ratio of controlled debt to the organization's equity capital changes. Do I need to recalculate previously recorded costs?
The answer is negative. On the one hand, according to paragraph 3 of Art. 318 of the Tax Code of the Russian Federation in the case when expenses are accounted for within the limits of the norms, the basis for calculation must be calculated on an accrual basis from the beginning of the tax period, that is, the calendar year (clause 1 of Art. 285 of the Tax Code of the Russian Federation). On the other hand, in the opinion of the main financial department, this approach does not apply to a situation where interest on controlled debt is taken into account.
The Ministry of Finance of Russia believes that expenses in the form of interest on controlled debt should be determined discretely, that is, discontinuously (see, for example, letters dated 05.24.2012 No. 03-03-06 / 1/271 and dated 16.09.2010 No. 03-03- 05/158). In addition, the position of the Ministry of Finance of Russia was supported by the Supreme Arbitration Court of the Russian Federation (Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation of September 17, 2013 No. 3715/13). The judges indicated the following.
Based on the provisions of Chapter 25 of the Tax Code of the Russian Federation, only previously unrecognized expenses are normalized. In paragraph 2 of Art. 269 of the Tax Code of the Russian Federation states that to calculate the maximum amount, indicators are calculated for the last day of each reporting period. And the summation of these indicators is not provided. Therefore, the reference in determining the costs of controlled debt to paragraph 3 of Art. 318 of the Tax Code of the Russian Federation is insolvent.
Local courts also adhere to the opinion of the Supreme Arbitration Court of the Russian Federation (see, for example, the resolution of the Federal Antimonopoly Service of the Moscow District of January 17, 2014 No. A40-16818 / 13). Therefore, there is no point in arguing with the regulatory authorities on this issue, it is better to agree.
On this basis, interest expenses on controlled debts should be calculated for the last date of each quarter. And there is no need to recalculate the previously accounted amounts in case of any changes in the following quarters. The same applies to the amounts of excess interest accounted for as dividends paid to a third-party company.
For your information
On August 6, 2014, the Federal Constitutional Law of 04.06.2014 No. 8-FKZ “On Amendments to the Federal Constitutional Law“ On Arbitration Courts in the Russian Federation ”and Article 2 of the Federal Constitutional Law“ On the Supreme Court of the Russian Federation ”" (hereinafter - Law No. 8-FKZ). In accordance with it, the Supreme Court of the Russian Federation is recognized as the only highest judicial body in civil, criminal, administrative and other cases, as well as in economic disputes. In addition, in Part 1 of Art. 3 of Law No. 8-FKZ states that the resolutions of the Plenum of the Supreme Arbitration Court of the Russian Federation remain in force until the relevant decisions are made by the Plenum of the Supreme Armed Forces of the Russian Federation. Law No. 8-FKZ does not specify whether the resolutions of the Presidium of the Supreme Arbitration Court of the Russian Federation may become invalid.
What will be included in the accounting if an agreement on the avoidance of double taxation is concluded with a foreign state
When accounting for interest on controlled debt, as a rule, we are talking about a debt to a company registered in another state. And between this state and the Russian Federation, an agreement on the avoidance of double taxation can be concluded. In the Tax Code of the Russian Federation, there is the following rule on this matter. If an international treaty of the Russian Federation, which contains provisions on taxation, establishes rules that differ from those provided for by law, then the norms of the international treaty should be applied (Article 7 of the Tax Code of the Russian Federation). In agreements with some states, the following rule is established. Income paid by a company of one state to a company incorporated in another contracting state must be accounted for with the first company under the same conditions as if paid to a resident of the first mentioned state.
Question: is it necessary to calculate the maximum amount of interest using the capitalization ratio, if interest is accrued on controlled debt, the conditions given in paragraph 2 of Art. 269 of the Tax Code of the Russian Federation are fulfilled, but between the state in which the foreign company is registered and the Russian Federation there is an agreement on the avoidance of double taxation?
Yes need. This opinion is set forth in the letters of the Ministry of Finance of Russia, for example, dated 26.06.2012 No. 03-08-13 and dated 06.10.2011 No. 03-08-05 / 1. The Treasury holds the position that the purpose of international double taxation treaties is to prevent tax evasion. And the provisions of these agreements in no way limit the application, in particular, Art. 269 of the Tax Code of the Russian Federation.
The same point of view is shared by the Supreme Arbitration Court of the Russian Federation. In the decree of the Presidium of the Supreme Arbitration Court of the Russian Federation of 15.11.2011 No. 8654/11, the provision of clause 2 of Art. 269 of the Tax Code of the Russian Federation in relation to debt to a foreign company, with the state of which there is an agreement on the avoidance of double taxation. In the opinion of the Supreme Arbitration Court of the Russian Federation, restrictions on the accounting of interest are not discriminatory. After the issuance of this decision, the arbitration courts also began to adhere to a similar point of view (see, for example, the resolution of the FAS of the Central District of 05/30/2013 No. A68-7455 / 2012).
Note that earlier the arbitration courts adhered to the opposite position (see, in particular, the resolution of the Federal Antimonopoly Service of the Moscow District dated 09.23.2009 No. KA-A40 / 9453-09-2).
Controlled debt to a foreign organization- outstanding debt on a Russian organization to an interdependent foreign organization or a person interdependent with this organization.
The term "Controlled debt" in English is Controled debt.
Controlled debt to a foreign organization is regulated by paragraphs 2 - 13 of Article 269 of the Tax Code of Russia.
The main consequence of the emergence of controlled debt is that if its size is more than 3 times (for banks, as well as for organizations engaged exclusively in leasing activities - more than 12.5 times) exceeds the difference between the amount of assets and the value of the taxpayer's liabilities - Russian organization (equity capital) for the last day of the reporting (tax) period, then the taxpayer is obliged to calculate the maximum amount of interest recognized as an expense on controlled debt. This limit value of interest is determined by dividing the amount of interest accrued by the taxpayer in each reporting (tax) period for controlled debt by the capitalization ratio calculated as of the last reporting date of the corresponding reporting (tax) period.
In this case, the capitalization ratio is determined by dividing the amount of the corresponding outstanding controlled debt by the amount of equity capital corresponding to the share of direct or indirect participation of this foreign organization in the authorized (pooled) capital (fund) of the Russian organization, and dividing the result by three (for banks and organizations, engaged in leasing activities - by twelve and a half).
Income tax expense includes the amount of marginal interest on controlled debt, but not more than actually accrued interest. The positive difference between the accrued interest and the marginal interest is equated for tax purposes with dividends paid to a foreign organization (that is, taxed as dividends).
Example
A foreign organization issued a loan to a Russian organization in the amount of EUR 1 million. A foreign organization owns 30% of the shares of a Russian organization. Equity capital at the end of the reporting period of the Russian organization - 400 thousand rubles (10 thousand euros). The amount of accrued interest is 100 thousand rubles.
Since the foreign organization directly owns more than 25% of the authorized capital, the debt on the loan is controlled.
The loan amount is more than 3 times the amount of equity capital, and accordingly, the obligation to calculate the maximum interest arises.
If the amount of marginal interest, for example, is 30 thousand rubles, this means that only 30 thousand rubles can be recognized for income tax expenses, and the remaining 70 thousand rubles of interest should be taxed as dividends.
A comment
Dzhaarbekov Stanislav, tax consultant, lawyer. Website: Taxd.ruThe considered rules for calculating the maximum interest are aimed at preventing foreign companies from using financing using thin capitalization - by replacing dividend payments with interest payments on loans. The fact is that the payment of dividends brings more income to the Russian treasury in comparison with the payment of loans. So, if a Russian company pays dividends in favor of a foreign company, then first it pays income tax on the amount of profit, and then pays tax on dividends (the tax rate depends on agreements between Russia and a foreign state). If a Russian organization pays a foreign organization interest on a loan, then this interest is recognized as an expense, reducing taxable profit. The interest itself, under most double taxation treaties, is taxed in a foreign country.
That is why, in the tax code, a rule has been introduced that if the debt significantly exceeds the amount of equity capital, then part of the interest on the loan can be reclassified into dividends. Many countries have similar rules.
Example
The foreign company plans to invest 100 million rubles in the Russian company.
Option 1
A foreign company can invest 100 million rubles in the authorized capital of a Russian company. In this case, the Russian company will pay profit tax (generally 20%) from the profit made in Russia and pay dividends to the foreign company from the net profit. When paying dividends to a foreign company, a tax of 15% is withheld, but it can be reduced if Russia has a valid one with a foreign state.
Option 2
A foreign company can issue a loan in the amount of 100 million rubles to a Russian company (by creating a company with an authorized capital of 10 thousand rubles). In this case, the amount of interest paid to the foreign organization will reduce the tax base for income tax. If a foreign state with Russia does not withhold tax on interest payments (as provided by many agreements), then the Russian budget will receive almost nothing from foreign investments.
Thin capitalization rules application
From 01.01.2017 - controlled debt is recognized as the outstanding debt of a taxpayer - a Russian organization for the following debt obligations of this taxpayer (FEDERAL LAW dated February 15, 2016 No. 25-FZ):
1) under a debt obligation to a foreign person who is an interdependent person of a taxpayer - a Russian organization in accordance with subparagraph 1, 2 or 9 of paragraph 2 of Article 105.1 of the Tax Code of the Russian Federation *, if such a foreign person directly or indirectly participates in a taxpayer - a Russian organization (subparagraph 1 Clause 2 of Art.269 of the Tax Code of the Russian Federation).
* pp. 1 p. 2 art. 105.1 of the Tax Code of the Russian Federation of an organization in the event that one organization directly and (or) indirectly participates in another organization and the share of such participation is more than 25 percent;
nn. 2 p. 2 art. 105.1 of the Tax Code of the Russian Federation, an individual and an organization if such an individual directly and (or) indirectly participates in such an organization and the share of such participation is more than 25 percent;
nn. 9 p. 2 of Art. 105.1 of the Tax Code of the Russian Federation of organizations and (or) individuals in the event that the share of direct participation of each previous person in each subsequent organization is more than 50 percent;
2) on a debt obligation to a person recognized in accordance with subparagraph 1, 2, 3 or 9 of paragraph 2 of Article 105.1 of the Tax Code of the Russian Federation as an interdependent person of a foreign person specified in paragraph 1 (paragraph 2 of paragraph 2 of Article 269 of the Tax Code of the Russian Federation);
3) under a promissory note in which the foreign person specified in clause 1 and (or) its related person specified in clause 2 act as a surety, guarantor or otherwise undertake to ensure the fulfillment of this promissory note by a taxpayer - a Russian organization (clause 3 Clause 2 of Art.269 of the Tax Code of the Russian Federation).
Clauses 7 - 12 of Article 269 of the Tax Code of the Russian Federation define special cases when the debt is not recognized as controlled.
At the same time, the rule is indicated that the court can recognize the outstanding debt of a taxpayer - a Russian organization for debt obligations that are not formally recognized as controlled debt - as a controlled debt (signs are specified in paragraph 2 of Article 269 of the Tax Code of the Russian Federation), if it is established that the ultimate purpose of payments on such debt obligations are payments to organizations specified in subparagraphs 1 and 2 of paragraph 2 of Article 269 of the Tax Code of the Russian Federation. (Clause 13 of Art.269 of the Tax Code of the Russian Federation).
Until 01.01.2017 - The requirement to calculate the maximum interest arises if the following conditions are met:
First condition
If the debt meets any of the following conditions, then it is called controlled debt to a foreign organization:
The Russian organization has outstanding debt on a promissory note:
1) To a foreign organization that directly or indirectly owns more than 20 percent of the authorized (pooled) capital (fund) of this Russian organization;
Example
A foreign company owns a 30% stake in the authorized capital of a Russian organization.
The debt on a debt obligation of a Russian organization to a foreign company will be recognized as controlled.
Example
The foreign company owns 70% of the share capital of the Russian organization Alfa. Russian organization Alpha owns 60% of the share capital of the Russian organization Beta. The debt under the debt obligation of the Russian organization Beta to the foreign company will be recognized as controlled, since the share of the foreign organization's indirect participation in the Russian organization Beta is 42% (70% * 60%).
Front Russian organization recognized in accordance with the legislation of the Russian Federation specified foreign organization;
Example
The foreign company owns 90% of the share capital of the Russian organization "Alpha" and 40% of the share capital of the Russian organization "Beta". If the Russian company Alfa issues a loan to the Russian organization Beta, then the debt will be recognized as controlled.
For a debt obligation in respect of which such an affiliated person and (or) this foreign organization directly act as a surety, guarantor or otherwise undertake to ensure the fulfillment of the debt obligation of the Russian organization.
Example
The Russian company Alfa, 30% of which is owned by a foreign company, received a loan from a bank. The loan was guaranteed by the Russian organization Beta, affiliated with a foreign organization.
The debt on the loan is recognized as controlled.
Second condition
If the amount of controlled debt to a foreign organization is more than 3 times (for banks, as well as for organizations engaged exclusively in leasing activities - more than 12.5 times) exceeds the difference between the amount of assets and the amount of liabilities of a taxpayer - a Russian organization (equity ) for the last day of the reporting (tax) period.
When determining the amount of equity capital, the calculation does not take into account the amount of debt in the form of tax and levy arrears, including current arrears in the payment of taxes and levies, the amount of deferrals, installments and an investment tax credit (clause 2 of Article 269 of the Tax Code of the Russian Federation).
Equity capital, for the purpose of applying the thin capitalization rules, is determined by the formula:
SK = A - O + H
SK - equity capital last day of the reporting (tax) period
A - the assets of the organization for the last day of the reporting (tax) period (can be determined according to the balance sheet data - the "Balance" line);
О - liabilities of the organization for the last day of the reporting (tax) period (can be determined according to the balance sheet data - the sum of short-term and long-term liabilities);
H - tax liabilities of the organization for the last day of the reporting (tax) period.
It should be noted that the arrears in contributions to compulsory pension insurance do not apply to arrears in taxes and fees (clause 2 of the Letter of the Ministry of Finance of Russia of 23.01.2007 N 03-03-06 / 1/23, Letter of the Ministry of Finance of Russia of 07.03.2013 N 03 -03-06 / 1/6908). Accordingly, the liability for mandatory pension insurance contributions should be taken into account by the entity when determining the amount of equity.
The essence of thin capitalization rules:
The result of applying the thin capitalization rules is as follows:
1) Expenses include marginal interest on controlled debt, calculated by calculation, according to the rules specified below, but not more than actually accrued interest (clause 3 of Art. 269 of the Tax Code of the Russian Federation).
2) The positive difference between accrued interest and marginal interest is equated for tax purposes with dividends paid to a foreign organization in respect of which there is a controlled debt (clause 4 of article 269 of the Tax Code of the Russian Federation).
Limit percentages are calculated using the formula:
PP - maximum interest for the reporting (tax) period
P is the amount of interest accrued by the taxpayer in the reporting (tax) period.
The capitalization ratio is calculated using the formula:
QC = (NKZ: SK * DU): Q
КК - capitalization ratio, calculated as of the last reporting date of the corresponding reporting (tax) period.
NKZ - outstanding controlled debt as of the last reporting date of the relevant reporting (tax) period.
SK - equity capital as of the last reporting date of the corresponding reporting (tax) period;
ДУ - share of direct or indirect participation of a foreign organization in the authorized (pooled) capital (fund) of a Russian organization
K - 3, and for banks and organizations engaged in leasing activities - 12.5.
Example
The foreign company owns 100% of the share capital of the Russian organization "Alpha". On January 1, a Russian organization received a loan from a foreign organization in the amount of 100 million rubles at 6% per annum.
As of March 31, the reporting date, the debt on the loan is 100 million rubles, excluding interest. The equity capital of the Russian organization as of this date is 1 million rubles.
The amount of interest accrued on the loan for the period from January 1 to March 31 amounted to 1.5 million rubles.
1) Determine the existence of conditions for the application of the thin capitalization rules:
Condition 1 - satisfied:
The Russian organization has outstanding debt on a promissory note to interdependent foreign organization.
Condition 2 - satisfied:
The amount of controlled debt (100 million rubles) is more than 3 times higher than the equity capital (1 million rubles) of Organization Alpha as of the last date of the reporting (tax) period.
2) We calculate the value of the marginal interest
Limit interest for the 1st quarter = 1.5 million: 33.33 = 45 thousand rubles.
Accordingly, the amount of interest in the amount of RUB 45 thousand is included in income tax expense. Any excess of this limit is not recognized as an expense and is taxed as dividend.
Leasing organization
Thin capitalization rules (Art.269 of the Tax Code of the Russian Federation - Tax Code of the Russian Federation) determine that tax rules that are unfavorable for taxpayers are applied if the size of the taxpayer's controlled debt is more than 3 times (for banks and organizations engaged in leasing activities - more than 12 times, 5 times) exceeds the difference between the amount of assets and the value of the liabilities of this taxpayer (clause 3 of article 269 of the Tax Code of the Russian Federation).
The term "Organization engaged in leasing activities" was introduced on January 1, 2017 by FEDERAL LAW of February 15, 2016 No. 25-FZ "On Amendments to Article 269 of Part Two of the Tax Code of the Russian Federation in terms of defining the concept of controlled debt" and is included in the text clause 3 of Art. 269 of the Tax Code of the Russian Federation:
"organization engaged in leasing activities, an organization is recognized for which, in the reporting (tax) period, on the last day of which the maximum amount of interest to be included in expenses is determined, income from leasing activities, taken into account when determining the tax base in accordance with this chapter, is at least 90 percent of all incomes taken into account when determining the tax base in accordance with this chapter for the specified reporting (tax) period. "
Application of international agreements
It should be noted that, until the end of 2011, the limit on the amount of interest on controlled debt practically did not work if an agreement on avoidance of double taxation was concluded with a foreign country partner in the transaction, Russia. Taxpayers challenged this limitation in court, since such agreements usually establish a rule on non-discrimination of foreign companies, and the courts recognized the rules on controlled debt (recognition of only a part of interest as expenses) more burdensome for foreign capital than the interest tax regime for Russian organizations.
For example, court decisions in favor of taxpayers were made:
Switzerland - Resolution of the FAS ZSO dated 11.03.2011 in case No. A27-7455 / 2010
Netherlands - REGULATION OF FAS NORTHWESTERN DISTRICT of 09.04.2007 in case N A56-19578 / 2006
Germany - REGULATION of the Federal Antimonopoly Service of the MOSCOW DISTRICT of 25.07.2005, 20.07.2005 N КА-А40 / 6616-05
Cyprus - Resolution of the Federal Antimonopoly Service of the Moscow District of July 28, 2010 N KA-A40 / 7751-10 in case N A40-99240 / 09-142-705
But at the end of 2011, the Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation of 11/15/2011 N 8654/11 in case N A27-7455 / 2010 was issued, which changed the judicial practice on this issue. In the opinion of the Supreme Arbitration Court of the Russian Federation, the limitation of the amount of interest on controlled debt does not contradict the norms of international agreements, which provide for a special regime for adjusting profits for associated enterprises. Accordingly, the rules of paragraph 2 of Art. 269 of the Tax Code of the Russian Federation are applied even if Russia has an agreement on the avoidance of double taxation with foreign countries, with the organizations of which the Russian taxpayer has entered into a transaction.
Payment of interest on controlled debt of a Russian organization
A situation is possible when a Russian organization pays interest on a debt obligation not to a foreign, but to a Russian organization (for example, a subsidiary in relation to a foreign one). In this case, the amount of interest exceeding the limit is not included in the costs. Is it necessary to withhold tax from these marginal percentages when paying income?
The Ministry of Finance of the Russian Federation in its letters dated 23.12.2013 No. 03-08-05 / 56706, dated 11.12.2013 No. 03-03-06 / 1/54311, dated 27.11.2013 No. 03-08-05 / 51219, dated 21.06.2013 No. 03-08-05 / 23521, dated 10.11.2010 No. 03-08-05, dated 24.12.2009 No. 03-08-05 explains that taxation at the source of income in this case is not provided for by the Code.
An example from arbitration practice
Obtaining a loan from a foreign sister organization may lead to the application of thin capitalization rules (clause 2 of article 269 of the Tax Code of the Russian Federation).
The Russian organization received a loan from a foreign organization that did not own more than 20% of the charter capital of this Russian organization, but was sister to it (the same foreign company owned significant shares of the charter capital of both the Russian organization of the borrower and the foreign organization of the lender ).
Formally, this situation does not fall under the thin capitalization rules. But the judicial authorities considered that the application of paragraph 2 of Art. 269 of the Tax Code of the Russian Federation in terms of limiting the amount of interest by marginal interest is correct.
The argument in favor of the tax authority was based on the fact that the loan was issued under the Agreement on the Joint Financing Group of the Enterprise. After examining the submitted documents, the courts concluded that the parent foreign organization in the said agreement undertook to finance the activities of the Russian company through its subsidiary foreign organization.
Resolution of the Federal Antimonopoly Service of the Moscow District of February 27, 2012 in case No. A40-1164 / 11-99-7 (By the definition of the Supreme Arbitration Court of the Russian Federation of June 21, 2012 No.
Important judgment
Rules of clauses 2-4 of Art. 269 of the Tax Code of the Russian Federation are applied regardless of the circumstances, these obligations arose under one or several loan agreements in the reporting (tax) period.
Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation of 01.04.2008 N 15318/07 in case N A26-8439 / 2006-217
Important judgment
It is necessary for the last day of each reporting period to determine the amount of debt, assets and liabilities of the organization, equity and share in the authorized capital. The summation of these indicators based on the results of half a year, nine months and a year (on an accrual basis) is not provided.
Article 269. Peculiarities of accounting for interest on debt obligations for taxation purposes of the Tax Code
(text of paragraphs 2-13)
2. For the purposes of this article, controlled debt is the outstanding debt of a taxpayer - a Russian organization for the following debt obligations of this taxpayer (unless otherwise provided by this article):
1) under a debt obligation to a foreign person who is an interdependent person of a taxpayer - a Russian organization in accordance with subparagraph 1, 2 or 9 of paragraph 2 of Article 105.1 of this Code, if such a foreign person directly or indirectly participates in a taxpayer - a Russian organization specified in paragraph one of this paragraph;
2) on a debt obligation to a person recognized in accordance with subparagraph 1, 2, 3 or 9 of paragraph 2 of Article 105.1 of this Code as an interdependent person of a foreign person specified in subparagraph 1 of this paragraph, unless otherwise provided by paragraph 8 of this article;
3) under a promissory note in which the foreign person specified in subparagraph 1 of this paragraph and (or) its related person specified in subparagraph 2 of this paragraph act as a surety, guarantor or otherwise undertake to ensure the fulfillment of this debt obligation of a taxpayer - a Russian organization unless otherwise provided by paragraph 9 of this article.
(Clause 2 as amended by Federal Law dated 15.02.2016 N 25-FZ)
3. In the event that the amount of controlled debt of a taxpayer is more than 3 times (for banks and organizations engaged in leasing activities - more than 12.5 times) exceeds the difference between the amount of assets and the amount of liabilities of this taxpayer (hereinafter in this article - equity) as of the last day of the reporting (tax) period, when determining the maximum amount of interest to be included in the expenses of this taxpayer, the rules established by paragraphs 4-6 of this article are applied. When determining the amount of controlled debt of a taxpayer for the purposes of this article, the amount of controlled debt arising from all the obligations of this taxpayer specified in paragraph 2 of this article shall be taken into account in aggregate.
For the purposes of this article, an organization engaged in leasing activities is an organization in which, in the reporting (tax) period, on the last date of which the maximum amount of interest to be included in expenses is determined, income from leasing activities, taken into account when determining the tax base in accordance with with this chapter, constitute at least 90 percent of all income taken into account when determining the tax base in accordance with this chapter for the specified reporting (tax) period.
(Clause 3 as amended by Federal Law dated 15.02.2016 N 25-FZ)
4. The maximum amount of interest to be included in the composition of expenses on controlled debt is calculated by the taxpayer by the last day of each reporting (tax) period by dividing the amount of interest accrued by this taxpayer in each reporting (tax) period on controlled debt by the capitalization ratio calculated as of the last reporting date of the corresponding reporting (tax) period. At the same time, in the event of a change in the capitalization ratio in the subsequent reporting period or based on the results of the tax period in comparison with the previous reporting periods, the maximum amount of interest to be included in the composition of expenses on controlled debt for the previous reporting period is not subject to change.
The capitalization ratio for the purposes of this article is determined by dividing the amount of the corresponding outstanding controlled debt by the amount of equity capital corresponding to the share of participation of the interdependent foreign entity specified in subparagraph 1 of paragraph 2 of this article in a Russian organization, and dividing the result by 3 (for banks and organizations engaged in leasing activities - by 12.5).
When determining the amount of equity capital, the amount of debt liabilities in the form of tax and levy arrears, including current arrears in taxes and levies, the amount of deferrals, installments and an investment tax credit, are not taken into account.
(Clause 4 as amended by Federal Law dated 15.02.2016 N 25-FZ)
5. The structure of expenses includes interest on controlled debt in an amount not exceeding the maximum amount of interest to be included in the composition of expenses calculated in accordance with paragraph 4 of this article, but not more than actually accrued interest.
In this case, the rules established by paragraph 4 of this article shall not apply to interest on borrowed funds, if the outstanding debt on the corresponding debt obligation is not controlled.
(Clause 5 was introduced by the Federal Law of 15.02.2016 N 25-FZ)
6. The positive difference between the accrued interest and the maximum interest calculated in accordance with paragraph 4 of this article is equated for tax purposes with dividends paid to the foreign person specified in subparagraph 1 of paragraph 2 of this article, and is taxed in accordance with the second paragraph of paragraph 3 Article 224 or paragraph 3 of Article 284 of this Code.
(Clause 6 introduced by Federal Law of 15.02.2016 N 25-FZ)
7. An outstanding debt under a debt obligation is not recognized for a taxpayer - a Russian organization as a controlled debt, if the calculation and withholding of the tax amount from the interest income of a foreign organization paid under such a debt obligation is not performed by the tax agent in accordance with subparagraph 8 of paragraph 2 of Article 310 of this Code ...
(Clause 7 introduced by Federal Law of 15.02.2016 N 25-FZ)
7.1. An outstanding debt on a promissory note is not recognized as a controlled debt for a taxpayer - a Russian organization, provided that the following conditions are met:
the monetary funds constituting the specified outstanding debt are directed exclusively to financing an investment project being implemented by a taxpayer on the territory of the Russian Federation;
the terms of the agreement, in accordance with which the debt obligation specified in this clause arose, provide for the commencement of the repayment of the amount of outstanding debt on such a debt obligation not earlier than five years after its occurrence;
the aggregate share of direct and indirect participation of an interdependent foreign person specified in subparagraph 1 of paragraph 2 of this article in a Russian organization does not exceed 35 percent;
the place of registration (place of tax residence) of the person to whom the debt obligation has arisen is a foreign state with which an agreement (agreement, convention) has been concluded for the avoidance of double taxation.
For the purposes of this clause, an investment project is the creation in the territory of the Russian Federation of a new production complex for the production of goods and (or) the provision of services. An industrial complex is recognized as new if it was put into operation after January 1, 2019 and was not previously in operation.
In the event of failure to fulfill one of the conditions established by this paragraph, the provisions of this article shall apply to the outstanding debt under the debt obligation specified in this paragraph without taking into account the provisions of this paragraph from the date of occurrence of the corresponding debt obligation.
(Clause 7.1 was introduced by the Federal Law of 19.07.2018 N 199-FZ)
8. The outstanding debt specified in subparagraph 2 of paragraph 2 of this article is not recognized as a controlled debt for a taxpayer - a Russian organization, provided that the following conditions are met (taking into account the specifics established by paragraph 11 of this article):
1) the debt obligation has arisen before a Russian organization or an individual who, in accordance with this Code, are tax residents of the Russian Federation during the entire reporting (tax) period and are recognized interdependent persons of a foreign person specified in subparagraph 1 of paragraph 2 of this article, on the basis of subparagraph 1 , 2, 3 or 9 of paragraph 2 of Article 105.1 of this Code;
2) the Russian organization or individual, to whom the debt obligation has arisen, during the reporting (tax) period has no outstanding debt on comparable debt obligations to a foreign person specified in subparagraphs 1 and (or) 2 of paragraph 2 of this article.
(Clause 8 introduced by Federal Law of 15.02.2016 N 25-FZ)
9. The outstanding debt specified in subparagraph 3 of paragraph 2 of this article shall not be recognized as a controlled debt for a taxpayer - a Russian organization, provided that the following conditions are met:
1) the debt obligation has arisen before an organization that is a bank (including organizations recognized by banks in accordance with the legislation of foreign states) or a development bank - a state corporation that are not recognized as interdependent persons both with a taxpayer - a Russian organization, and with persons acting as a surety, guarantor or otherwise undertaking to fulfill the taxpayer's promissory note;
(as amended by Federal Law of December 29, 2017 N 466-FZ)
2) from the moment the taxpayer's debt obligation arises, there has been no termination (fulfillment) of the specified debt obligation both in terms of the amount of the principal debt and in terms of payment of interest by the foreign person specified in subparagraph 1 of paragraph 2 of this article and (or) his related person, specified in subparagraph 2 of paragraph 2 of this article, acting as a surety, guarantor or otherwise undertaking to ensure the fulfillment of the specified debt obligation.
(Clause 9 introduced by Federal Law of 15.02.2016 N 25-FZ)
10. Outstanding debt on a promissory note is not recognized as controlled debt on the grounds established by clauses 8 and 9 of this article, subject to written confirmation of the fulfillment of the conditions established by these clauses, provided by the creditor under the promissory note of the taxpayer - a Russian organization.
(Clause 10 introduced by Federal Law of 15.02.2016 N 25-FZ)
11. Determination of the comparability of debt obligations for the purposes of subparagraph 2 of paragraph 8 of this article is made taking into account the following features:
1) to determine the comparability of debt obligations, the total amount of these obligations and the period for which they are granted are taken into account;
2) in the presence of several debt obligations under transactions concluded with a foreign person specified in subparagraphs 1 and (or) 2 of paragraph 2 of this article, in order to determine the total amount of debt obligations for the purposes of subparagraph 1 of this paragraph, the amounts of such obligations are summed up;
3) if the currency of the debt obligation to a foreign person specified in subparagraphs 1 and (or) 2 of paragraph 2 of this article differs from the currency of the debt obligation with which the comparison is made, the debt obligations are reduced to a single currency at the rate set by the Central Bank of the Russian Federation at the date of occurrence of the debt obligation to the creditor;
4) if the period for which the debt obligation is provided to the taxpayer - the Russian organization does not exceed the period for which the outstanding debt arises under the debt obligation to the foreign person specified in subparagraphs 1 and (or) 2 of paragraph 2 of this article, such periods are considered comparable.
(Clause 11 introduced by Federal Law of 15.02.2016 N 25-FZ)
12. If the condition established by subparagraph 2 of paragraph 8 of this article is not met, the outstanding debt specified in subparagraph 2 of paragraph 2 of this article is recognized for a taxpayer - a Russian organization as controlled debt in an amount not exceeding the amount of outstanding debt under a comparable debt obligation specified in subparagraph 2 of paragraph 8 of this article.
(Clause 12 was introduced by Federal Law of 15.02.2016 N 25-FZ)
13. The court may recognize the outstanding debt of a taxpayer - a Russian organization for debt obligations not specified in paragraph 2 of this article - as controlled debt, if it is established that the ultimate purpose of payments on such debt obligations is payments to organizations specified in subparagraphs 1 and 2 of paragraph 2 of this article. articles.
(Clause 13 introduced by Federal Law of 15.02.2016 N 25-FZ)
The term was introduced on January 1, 2002 in connection with the entry into force of Chapter 25 "Tax on the profit of organizations" of the Tax Code of the Russian Federation by the federal law of 06.08.2001 N 110-FZ (Art. 13).
- Peculiarities of interaction of insured organizations with the FSS, if they are located in the region where the pilot project is operating Interaction with the social insurance fund
- Keeping a journal of registration of cash documents
- A sample of filling out an order for an inventory
- What to correct in the accounting if the company issued an invoice with a long delay If the invoice was not issued