Recovering VAT on advances. Postings for VAT from advances. Conditions for deducting tax on advances issued

How to properly organize accounting for VAT deductions from advances issued in cases where payments under the contract are carried out in the context of different specifications (an analogy can also be drawn with the stages of work), i.e. the advance can be paid according to one specification, and the delivery can be carried out according to another specification within the framework of one contract. What should we do in this case regarding the deduction and restoration of VAT on advances issued, should we break them down according to specifications or not? Are there any tax risks in this case, assuming that the deduction of VAT on a supply is always associated with the restoration of VAT on a previously paid advance ( if we exercised the right to deduction in accordance with clause 12 of Article 171 of the Tax Code of the Russian Federation) and what exactly are these risks?

If you claim a VAT deduction when transferring advances to a supplier, you need to keep records of issued and closed advances in the context of each specification, and not for the contract as a whole - VAT must be restored when closing each specific advance. Otherwise, there is a risk that the tax base for VAT, as well as the amount of tax payable/deductible, will be formed incorrectly for tax periods.

For example, if you do not restore VAT from an advance payment in the period in which the shipment was made against this advance payment, you will overestimate the amount of tax to be deducted and, conversely, if the restoration of VAT from an advance payment was made in an earlier period, then, most likely, it will be the amount of tax deductible is underestimated. During the tax audit, the inspectorate will completely recalculate the tax base by period in accordance with the accepted procedure for recovering VAT from advances

The rationale for this position is given below in the materials of the Glavbukh System

Situation: How to restore VAT previously accepted for deduction from the transferred advance payment

The amount of VAT accepted for deduction from the transferred advance payment (partial payment) must be restored by the buyer (customer):*

After the receipt of goods (work, services, property rights) received (performed, provided, transferred) on account of the transferred advance (partial payment) in cash. In this case, the buyer (customer) accepts for deduction the amount of VAT that is allocated in the invoice issued by the seller (performer) upon shipment. VAT must be restored in the quarter in which the buyer (customer) will have the right to deduct for goods (work, services, property rights) received on account of the previously transferred advance (partial payment);
upon termination (change of conditions) of a contract for the supply of goods (performance of work, provision of services, transfer of property rights), towards which the advance was transferred. In this case, the seller (performer) returns to the buyer (customer) the previously transferred advance (partial payment). VAT must be restored in the quarter when the contract was terminated (changed in terms) and the advance (partial payment) was returned.

This procedure follows from the provisions of paragraphs 2 and 12 of Article 171, paragraph 9 of Article 172 and subparagraph 3 of paragraph 3 of Article 170 of the Tax Code of the Russian Federation.

If, on account of the received prepayment, the supplier (performer) ships goods (performs work, provides services, transfers property rights) in separate batches (in stages), then the buyer (customer) must restore the “input” VAT in parts. Namely, in the amounts indicated in the invoices for each batch (stage). Similar clarifications are contained in letters of the Ministry of Finance of Russia dated July 1, 2010 No. 03-07-11/279 and dated January 28, 2009 No. 03-07-11/20.*

An example of how “input” VAT is reflected in accounting when purchasing materials. The supply agreement provides for partial advance payment of materials to the seller in cash*

Between ZAO Alpha (buyer) and LLC Trading Company Hermes (seller) an agreement was concluded for the supply of materials intended for use in production activities subject to VAT. According to the agreement, Hermes ships materials to Alpha on the terms of their partial advance payment. In March, Alfa transferred an advance in the amount of 118,000 rubles to the seller against the upcoming delivery. (including VAT – 18,000 rubles). In April, Alpha received materials supplied by Hermes. The cost of materials was 120,360 rubles. (including VAT – 18,360 rubles).

The following entries were made in the buyer's account.

In March:

Debit 60 subaccount “Settlements on advances issued” Credit 51
– 118,000 rub. – an advance payment has been made towards the upcoming supply of materials.

After receiving an invoice from the supplier for the amount of the advance:

Debit 68 subaccount “Calculations for VAT” Credit 76 subaccount “Calculations for VAT from advances issued”
– 18,000 rub. – VAT paid to the supplier as part of the advance payment is accepted for deduction.

In April:

Debit 10 Credit 60 subaccount “Payments for materials”
– 102,000 rub. – materials are capitalized;

Debit 19 Credit 60 subaccount “Payments for materials”
– 18,360 rub. – VAT on capitalized materials is taken into account;

Debit 76 subaccount “Calculations for VAT on advances issued” Credit 68 subaccount “Calculations for VAT”
– 18,000 rub. – VAT previously accepted for deduction has been restored;

Debit 68 subaccount “VAT calculations” Credit 19
– 18,360 rub. – accepted for deduction of VAT on capitalized materials;

Debit 60 subaccount “Payments for materials” Credit 60 subaccount “Settlements for advances issued”
– 118,000 rub. – the advance payment transferred to the supplier is credited;

Debit 60 subaccount “Payments for materials” Credit 51
– 2360 rub. (120,360 rubles – 118,000 rubles) – the debt to the supplier is repaid.

O.F. Tsibizova

Head of the indirect taxes department of the tax department

And the customs tariff policy of the Russian Ministry of Finance

VAT on advances received is calculated by the seller and paid if the date of sale of the goods is later than the moment of payment for it. The Tax Code of the Russian Federation allows not to pay such VAT, but not for everyone. So do you need to pay VAT when receiving advances?

What is VAT on advances?

VAT on advance payment is calculated on the basis of Art. 167 Tax Code of the Russian Federation. Payment for deferred delivery will have to be taxed. The amount received as an advance payment is included in the tax base. The formula for calculating value added tax is not complicated: 10/110 or 18/118. The choice of value depends on the applied rate. It is selected in accordance with Art. 164 Tax Code of the Russian Federation. The scope of application of the 10% rate is specified in paragraph 2 of the above article. In other cases, the tax is charged at 18%. When purchasing goods with different rates, 18/118 is taken into account when selling them. When paying VAT on the advance received, the seller must perform the following steps.

Preparation of invoice. It must be issued no later than 5 days from the date of receipt of the advance payment. It is issued in two copies: for the seller and for the buyer. Her extract is regulated by the Decree of the Government of the Russian Federation dated December 26, 2011. No. 1137.
Registration of advance invoice in the sales ledger. The date of its statement and receipt of money from the client must coincide.

Postings when restoring VAT from an advance payment are drawn up as follows: Dt 51 Kt 62 - received prepayment and Dt 76 Kt 68 - reflection of VAT on an advance payment.

How to charge VAT on advances issued?

The calculation of VAT subject to deduction is made in accordance with clause 12 of Art. 171 Tax Code of the Russian Federation. The customer who has paid the advance has the right to a tax deduction in the amount presented by the seller. The refund can be used before the actual shipment of the product or service. The basis for this will be the following documents:

An invoice issued for an advance payment. Registered in the purchase book.
Payment document confirming the fact of transfer.
A transaction agreement containing a clause on the advance payment and its amount.

Upon completion of the transaction, the seller issues an invoice for the entire amount. It is also entered into the purchase book. A previously issued document for an advance payment is registered in the sales book, that is, first it is recorded as an income, then as an expense, leaving only the document for the entire amount of the transaction in accounting. You can refund the entire amount of tax, but the amount accepted for deduction from the advance payment will have to be restored in the same quarter. This provision is provided for in paragraph 3 of Art. 170 Tax Code of the Russian Federation. The advance payment must be reflected in the VAT return.

Is it possible not to pay VAT on advances received?

The right not to charge VAT when returning an advance payment to the buyer is provided for the following cases:

Exemption from tax according to the provisions of Art. 145 Tax Code of the Russian Federation. It covers taxpayers whose pre-tax revenue based on the results of the previous 3 months did not exceed 2 million rubles.
Sales of goods subject to a 0% rate. Their list is given in paragraph 1 of Art. 164 of the Tax Code of the Russian Federation, as well as in the Letter of the Ministry of Finance dated October 15, 2012 No. 03-07-08/293.
Sales of goods not subject to VAT in accordance with Art. 149 of the Tax Code of the Russian Federation. The tax is not calculated either on the advance received or on the products shipped.
Manufacturing goods for a period of more than 6 months and receiving advance payment for them. Clause 13 of Art. 167 of the Tax Code of the Russian Federation, the payer is given the right to charge VAT not on the date of receipt of the advance payment, but on the date of shipment of the finished product. Their list was approved by the Government of the Russian Federation dated July 28, 2006 No. 468.
Sales outside the Russian Federation. Only goods sold in Russia are considered as an object of VAT taxation. Export does not fall under this definition.

In all the situations described above, VAT is not paid on advances received.

By transferring the prepayment, the buyer declares VAT on the advance payment for deduction (clause 9 of Article 172 of the Tax Code of the Russian Federation). When the seller ships the goods, this tax will need to be restored to the buyer. In addition, it is necessary to restore VAT when returning the prepayment (subclause 3, clause 3, article 170 of the Tax Code of the Russian Federation).

But in practice, it happens that the seller did not ship the goods and did not return the advance received. Then, after the expiration of the limitation period, the buyer will have to write off such debt as expenses (subclause 2, clause 2, article 265 and clause 2, article 266 of the Tax Code of the Russian Federation).

The Ministry of Finance believes that in this case the entire advance amount, including VAT, will be an expense ( letter dated 03.08.10 No. 03-03-06/1/517). That is, the seller will first claim the same amount—VAT on the prepayment—as a deduction and then include it in expenses. Then it is logical to restore the tax previously declared for deduction. But the Tax Code of the Russian Federation has a closed list of cases when VAT needs to be restored. And the situation in question is not named in this list.

So is it necessary to restore VAT in this case? With this we turned to and

Recovering VAT from an advance payment: an accountant’s opinion

Formally, there are no grounds for reinstating VAT in this case. Such a condition is not contained in subparagraph 3 Article 170 of the Tax Code of the Russian Federation.

But tax legislation does not provide for the possibility of simultaneously taking into account the same amount of “input” VAT both among deductions for this tax and in the income tax base.

Ministry of Finance of Russia in letters from 03.08.10 No. 03-03-06/1/517, dated 10.21.08 No. 03-03-06/1/596 And from 07.10.04 No. 03-03-01-04/1/68 says that the amount of VAT on the prepayment that the supplier did not return, while not fulfilling its obligations under the contract, is reflected by the buyer as expenses for profit tax purposes. This means that the buyer loses the right to deduct this amount ( letter dated 04/11/14 No. 03-07-11/16527).

In the said letter, the Ministry of Finance considered the following situation. The contractor received advance payment, but did not fulfill his obligations under the contract. The customer writes off the resulting receivables as expenses. At the same time, he simultaneously restores VAT, which was lawfully accepted for deduction when transferring an advance payment on account of the upcoming work.

Therefore, in the situation under consideration, it is safer for the buyer to restore the disputed VAT.”

Restoring VAT from an advance payment: the opinion of tax officials

The Tax Code of the Russian Federation establishes a specific list of circumstances under which it is necessary to restore VAT (clause 3 of Article 170 of the Tax Code of the Russian Federation). This is a change in conditions or termination of the contract and return of the prepayment. The point of this rule is to prevent the buyer from unjustly enriching himself by deducting VAT after he receives back the advance payment along with this tax upon termination of the contract or its annulment.

If the company writes off the amount of the advance received due to the expiration of the statute of limitations, it means that the seller did not return the advance payment. And the conditions for VAT restoration, which are specified in the Tax Code of the Russian Federation, are not met.

When considering a dispute on a similar issue, the judges sided with the company ( Resolution of the Federal Antimonopoly Service of the North-Western District dated 09/05/13 No. A26-10215/2012). She received the defective goods against the advance payment given to the seller. The goods were not accepted for registration, but only for storage. The company demanded a refund of the advance payment from the seller. The judges indicated that it is not necessary to restore VAT from the advance payment in this situation until the seller returns the advance payment. And that the Tax Code of the Russian Federation does not require the restoration of VAT accepted for deduction from an advance payment if it was not returned on time.

In other disputes, the courts note that the list of grounds for VAT restoration is closed and is not subject to broad interpretation ( decision of the Supreme Arbitration Court of the Russian Federation dated May 19, 2011 No. 3943/11, FAS resolutions West Siberian dated 08.27.13 No. A27-19496/2012, North-West dated 10.15.12 No. A56-165/2012).

The buyer has the right to deduct VAT from the advance payment issued.

Consultation

Advance payment

Reflection in the purchase book

VAT accepted for deduction on an advance invoice is reflected in the VAT transaction type code - 02 "Payment, partial payment (received or transferred) on account of upcoming supplies of goods (work, services), property rights, including operations carried out on the basis of contracts commissions, agency agreements providing for the sale and (or) acquisition of goods (works, services), property rights on behalf of the commission agent (agent) or on the basis of transport expedition contracts, with the exception of transactions listed under codes 06 ";

Reflection in the sales book

1) If the buyer received goods (accepted work or services) on account of the advance payment:

VAT restored in connection with the acquisition of goods (work, services) is reflected in the VAT transaction type code - 21 "Operations for the restoration of tax amounts specified in paragraph 8 of Article 145, paragraph 3 of Article 170 (except for subparagraphs 1 and 4 of paragraph 3 of Article 170), Article 171.1 of the Tax Code of the Russian Federation, as well as when performing transactions taxed at a tax rate of 0 percent for value added tax"

2) If the contract is terminated and the seller returns the advance:

VAT restored in connection with the termination or change of the contract and the return of the advance is reflected in the VAT transaction type code - 22 “Operations for the return of advance payments in the cases listed in paragraph two of paragraph 5 of Article 171, as well as transactions listed in paragraph 6 of Article 172 Tax Code of the Russian Federation"

Reflection in the VAT return

The amount of VAT on the advance payment, accepted for deduction, is reflected on line 130 "13. The amount of tax presented to the taxpayer - the buyer when transferring the amount of payment, partial payment for upcoming deliveries of goods (performance of work, provision of services), transfer of property rights, subject to deduction from the buyer" Section 3 for the tax period (quarter) in which the advance was issued.

The amounts of restored VAT are reflected in line 090 "6.1. tax amounts subject to restoration in accordance with subparagraph 3 of paragraph 3 of Article 170 of the Tax Code of the Russian Federation" section 3 for the tax period (quarter) in which the goods were received on account of the advance payment issued or when the advance was returned.

Reflection of advance VAT from the buyer in accounting

An advance was issued for the delivery of goods:

D 60 - K 51 - advance payment issued

D 68 - K 60-advance - VAT on the advance is accepted for deduction

Items received from seller:

D 41 - K 60 - Goods received

D 19 - K 60 - VAT on purchased goods (work, services) is reflected

D 68 - K 19 - VAT on purchased goods (works, services) is accepted for deduction

D 60-advance - K 68 - Restored VAT on advance

The buyer and seller entered into a purchase and sale agreement for goods in the amount of 23,600 rubles (including VAT of 3,600 rubles at a rate of 18%). According to the contract, the buyer makes an advance payment in the amount of 11,800 rubles and after delivery of the goods the final payment is made.

20.02 The buyer paid the seller an advance in the amount of 11,800 rubles to pay for the goods (including VAT of 1,800 rubles).

The buyer deducts VAT in the amount of 1,800 rubles (based on the advance invoice received from the seller).

D 60 K 51 11 800 advance payment transferred

D 19 K 60 1,800 VAT calculated on advance payment

D 68 K 19 1,800 VAT accepted for deduction

10.03 The seller transfers the goods to the buyer in the amount of 23,600 rubles (including VAT 3,600 rubles).

The buyer calculates (restores) the VAT previously accepted for deduction on the advance payment (1,800 rubles) and accepts for deduction the VAT on the goods received (3,600 rubles).

Buyer's accounting:

D 41 K 60 20 000 goods registered

D 60 K 68 1,800 VAT previously accepted for deduction on the advance payment was restored

D 19 K 60 3,600 VAT in the cost of goods

D 68 K 19 3,600 VAT accepted for deduction

12.03 The buyer transfers 11,800 rubles to the seller.

The buyer does not take this amount into account either in the tax base or as a deduction.

Buyer's accounting:

D 60 K 51 11 800 payment for goods

Notes

1) from 2019, the basic VAT rate is 20% (until 2019 - 18%). The estimated VAT rate from 2019 is 20/120 (before 2019 - 18/118).

Payment by the buyer (customer) for goods (work, services) before their delivery (fulfillment).

A document that serves as the basis for the buyer to accept the VAT amounts presented by the seller for deduction.

An invoice issued by the seller upon receipt of advances for the supply of goods (work, services).

A reporting document for value added tax (VAT), intended for registration of invoices (control tapes of cash register equipment, strict reporting forms for the sale of goods, performance of work, provision of services to the population), as well as adjustment invoices drawn up by the seller when an increase in the cost of shipped (performed, rendered, transferred) goods (work, services, property rights). The sales book is approved by Appendix No. 5 to the Decree of the Government of the Russian Federation of December 26, 2011 No. 1137.

A reporting document on value added tax (VAT), intended for registration of invoices (including adjustments, corrected ones) issued by sellers, in order to determine the amount of VAT to be deducted (refunded) in the prescribed manner. The purchase book is approved by Appendix No. 4 to Decree of the Government of the Russian Federation of December 26, 2011 No. 1137.

Tax return submitted to the tax authorities for value added tax.

The restoration of VAT on advances issued is the result of its deduction and is not used very often. How to correctly recover VAT from advances? What conditions must be met in order to accept advance VAT as deduction? What entries need to be made in both cases? Let's look at all the pros and cons of VAT on advances in our article.

For tax recovery situations not related to advances issued, read the material “The nuances of VAT recovery and what transactions are used?” .

Is it necessary to restore tax on advances received?

When receiving an advance payment, in most cases the seller is obliged to calculate the tax on it for payment to the budget (clause 1 of Article 154 of the Tax Code of the Russian Federation), and later, when making a shipment, against this advance payment, take all or part of the amount of the tax paid from the advance tax as deductions (clause 8 Article 171 and paragraph 6 Article 172 of the Tax Code of the Russian Federation). In other situations (when the advance is returned to the buyer or the overdue debt on it is written off), VAT restoration will also not be required. In the 1st case, it can be taken as a deduction on the date of return (clause 5 of Article 171 of the Tax Code of the Russian Federation), and in the 2nd case it must be written off as expenses not taken into account in the calculation of income tax.

Thus, for advances received, the picture always turns out to be the opposite of the main condition for recovery: first, the tax is calculated for payment, and then taken as a deduction or written off. That is why there will never be a situation of VAT restoration on these payments.

Conditions for deducting tax on advances issued

When calculating the tax on the advance payment received, the seller issues an invoice for it and sends 1 copy of it to the buyer. Based on this document, the buyer has the right to take into account the amount of tax allocated in it as deductions (clause 12 of article 171 of the Tax Code of the Russian Federation). Although he may not do this, since deductions are not an obligation, but are made voluntarily (clause 1 of Article 171 of the Tax Code of the Russian Federation). It is better to consolidate the taxpayer’s position regarding deductions for advances issued (whether they will be applied or not) in some document (for example, in the VAT accounting policy).

However, these 2 circumstances (payment and invoice) are not enough for the buyer to deduct it. Additional conditions for carrying out such an operation follow from other provisions of the Tax Code of the Russian Federation:

a condition on the possibility of transferring an advance payment must be included in the supply contract (clause 9 of Article 172 of the Tax Code of the Russian Federation);
The invoice for the advance payment must be dated within the 5-day period allotted for issuing such documents (clause 3 of Article 168 of the Tax Code of the Russian Federation), and have all the required details for it (clause 5.1 of Article 169 of the Tax Code of the Russian Federation).

Acceptance of deductions from the buyer will be reflected in the following posting (for each individual document):

Dt 68/2 Kt 76/VA,

Procedure for recovering VAT from advances

VAT recovery on an advance payment is made in the following situations (subclause 3, clause 3, article 170 of the Tax Code of the Russian Federation):

the delivery has been completed against which an advance payment has been made;
the supply contract is terminated or its terms are changed and in connection with this the advance payment is returned to the buyer.

Accounting entries for VAT recovery from advance payment

The VAT recovery posting will always be the same for each individual invoice:

Dt 76/VA Kt 68/2,

68/2 - subaccount for accounting for settlements with the budget for VAT on account 68;

76/VA - subaccount for accounting for VAT on advances issued in account 76.

The results of VAT recovery for specific advance invoices will vary depending on the ratio of the amount of the advance and the cost of supply associated with it:

for the first two cases (the amounts of the advance and delivery are the same or the amount of the advance is less than the cost of delivery), with this posting the amount of tax on the advance, listed in subaccount 76/AB, will be closed completely;
in the 3rd and 4th cases (the amount of the advance is greater than the cost of delivery or the contract contains a condition on partial offset of the advance towards payment for the supply), in subaccount 76/AB after the restoration of VAT there will be a balance of unrecovered tax.

Read about the latest changes in the document reflecting tax recovery operations in the material “Sales Book - 2019: new form” .

Pros and cons of deducting VAT on advances issued

The positive aspects of the use of such deductions occur with significant amounts of advances issued and manifest themselves as follows:

A large deduction amount can not only significantly reduce the total of the declaration drawn up for the period of its application, but also make it result in the amount of tax reimbursement from the budget.
A deduction for an advance on account of several deliveries for it is made one-time, ahead of time and in a larger amount than deductions would be made for each of the deliveries separately. At the same time, VAT restoration occurs in parts and can be extended over several tax periods.

On the positive side, there are also conditions for payment of only part of the delivery using the transferred advance payment. In this case, deductions for the advance payment issued and for the delivery document will occur earlier and will be taken in full, and the VAT restoration will be made only in part of these amounts and will be extended over time.

The following points will be negative:

increasing the volume of accounting operations and document flow;
there is no point in using deductions for advances if we are talking about small amounts and the period for transferring the advance often coincides with the period of shipment for it.

Read about the rules for issuing invoices for advance payments.

Results

The question of recovering VAT on advances paid to suppliers arises if the taxpayer takes tax deductions on invoices issued by the supplier for prepayment. The provision for advance payment must be included in the supply agreement. VAT on advances issued is recorded in a separate subaccount of account 76.