In 2018, the rules for calculating VAT changed. Let's look at when the buyer pays VAT and when the seller pays it.

Buyers will more often pay tax instead of the seller. For example, when purchasing raw animal skins. Other cases where the buyer needs to pay VAT as an agent and the condition under which this tax can be deducted. Let's look at how to calculate VAT according to the new rules.

• Important article:

When VAT is paid by the buyer instead of the seller

If during the first quarter you bought raw hides from a VAT payer, then tax should be charged instead. The same rule applies when purchasing scrap and waste ferrous and non-ferrous metals, secondary aluminum and its alloys. If you did not transfer the prepayment and did not claim VAT for deduction on it, calculate the tax using the formula:

On January 24, a general mode buyer received raw animal skins worth RUB 50,000. The supplier is a VAT payer. This means that the buyer must pay tax on the transaction. To do this, a calculated rate of 18/118 must be applied to the cost of hides including VAT. It turns out 9000 rubles. ((50,000 ₽ + 50,000 ₽ × 0.18) × 18/118).

On January 25, the farm paid the seller, and on January 26, he handed over an invoice with the note “VAT is calculated by the tax agent.” According to this document, the accountant claimed 9,000 rubles as a deduction for himself. VAT payable is zero.

If the farm operated in a special mode, there would be no deduction. However, VAT for the seller is 9,000 rubles. - you would still have to pay and file a tax return.

If a farm purchases skins on an advance payment basis, calculate the tax using the formula:

The buyer in general mode made an advance payment on January 24 - 50,000 rubles. for raw animal skins. Based on the invoice with the mark “VAT is calculated by the tax agent” from the seller - a VAT payer, the buyer assessed tax - 9,000 rubles. ((50,000 ₽ + 50,000 ₽ × 0.18) × 18/118) and declared VAT deductible on the prepayment. On January 30, the buyer capitalized the skins for 50,000 rubles, and the seller handed over an invoice for shipment with the note “VAT is calculated by the tax agent.”

After this, the buyer recovered 9,000 rubles. tax on prepayment and deducted the same amount on delivery. For the seller, I accepted VAT deduction from the advance payment in the amount of 9,000 rubles. and charged the same amount for shipment. As a result, VAT payable is zero. If the farm operated in a special mode, there would be no deduction. However, VAT for the seller is 9,000 rubles. - you would still have to pay and file a tax return.

When the seller pays VAT instead of the buyer

A business does not pay VAT if it uses an exemption from this tax or applies a special regime. However, if the company subsequently loses the right to exemption or special treatment, VAT will have to be charged. For what period to calculate the tax depends on what regime the company applies. Let's consider the possible options in order.

General mode. Let’s say a general regime farm has a VAT exemption. Then the tax must be calculated from the 1st day of the month in which the revenue limit was exceeded - 2 million rubles. excluding VAT for every three consecutive months.

Example 3. From what point is VAT charged upon loss of the right to exemption?

The farm received a VAT exemption from January 1. However, already in February, the company’s revenue exceeded the limit of 2 million rubles. This month and in January the farm sold raw hides. It turns out that VAT needs to be charged for February, but no tax needs to be charged for January.

Simplified. There is a different revenue limit for the simplified version - 150 million rubles. However, if you lose the right to a special regime, the tax must be calculated not from the 1st day of the month in which the limit was exceeded, but from the beginning of the quarter.

Unified Agricultural Sciences. It is necessary to charge VAT from the beginning of the year if the farm has lost the right to the single agricultural tax. In this special mode, the share of agricultural products for the year is checked. If this figure is less than the required 70 percent, the farm loses the right to a special regime.

Example 4. From what point is VAT charged upon loss of the right to a single agricultural tax?

The farm has been applying the Unified Agricultural Tax since January 1. This month, we sold raw hides and gave the buyer an invoice marked “Excluding tax (VAT).” At the end of 2018, agricultural income amounted to 6,000,000 rubles, and total income - 10,500,000 rubles. The share of agricultural revenue is 0.57 (6,000,000 ₽/ 10,500,000 ₽). This is less than 70 percent of total revenue. This means that the farm lost the right to agricultural tax from January 1, 2018. VAT must be calculated on sold skins. You can pay it without penalties until January 31, 2019 inclusive.

A question that often worries ordinary people and novice businessmen is who pays VAT: the seller or the buyer?. It is not so easy to give a definite answer to this. Therefore, first things first.

Two-faced tax

On the one hand, if you carefully read the laws, the burden VAT payers lies with organizations and businessmen who sell various goods and services in Russia. This follows from the meaning of the Tax Code. By the way, it also contains a list of those who may, for some reason, be exempt from paying this tax.

But at the same time, each of us, buying almost any product in a store, can see the following phrase on the price tag - “including VAT.” In fact, it means that this tax is already included in the final cost of the product or service. And it turns out that the buyer directly pays for it. Meanwhile, it goes into the seller's pocket. And the seller already transfers this tax to the treasury.

Thus, it turns out that the burden of paying VAT lies on the shoulders of sellers, and they are direct VAT payers. But the buyer actually pays.

Transactions with tax

List of those who pays VAT and who needs to make payments to the country’s budget at the end of the tax period is specified in Article 146 (clause 1) of the Tax Code. The following points are given there:

• the tax is paid by those who are involved in the sale of all kinds of goods, services, works in our country, as well as the transfer of property rights;
• Those who transfer various valuables for the needs of their own business (within the Russian Federation) are also subject to taxation;
• this burden also falls on those who carry out various construction and installation works for their own needs.

Persons falling under one of these clauses are required to pay VAT to the treasury. Its amount is determined according to the rules of Articles 171 and 172 of the Tax Code. They clarify what deductions a VAT payer can count on and under what conditions.

But Articles 167 and 174 of the Tax Code determine the tax payment mechanism. They say that you need to share VAT with the budget every quarter (3 months). Moreover, payments are not made once, but are spread out over one-third each month. Payment of VAT amounts is due no later than the 25th day of each month.

The amount indicated in the VAT reporting must be given in rubles. Moreover, pennies must be rounded: they do not appear in the document.

Other obligated persons

Besides those who is the VAT payer, those who decide to introduce some goods into the territory of Russia are also required to pay the tax. Moreover, these can be foreign citizens and companies. A passport from another country does not exempt them from paying tax. But the deduction procedure and timing may vary. In this case, they are determined not by the Tax Code of the Russian Federation, but by the customs procedure under which the goods fell.

Also in the category of those who pays VAT, tax agents are subject to this tax. All VAT deductions fall on their shoulders if a business partner is unable to comply with the law regarding the payment of this tax.

How do special regime officers pay?

At the very beginning of the article, we said that there are companies and merchants who pay taxes not according to generally accepted schemes. These cases are called special modes. For them, taxes are paid according to special systems: UTII, simplified tax system, patent taxation system or unified agricultural tax.

By and large, in fact, they cannot be called those who pays VAT. But they can also be forced to remit this tax if they issue invoices to their customers that indicate “including VAT.”

To understand what VAT is, it is enough to know how the abbreviation stands for. VAT is a value added tax. Added value is the difference between the purchase price of a product and the selling price. For example, a company purchased computer mice at a price of 100 rubles per piece, and sells them for 150 rubles. The difference of 50 rubles will be considered added value. In words, the explanation is simple, but this tax has a lot of nuances.

Despite the fact that VAT is essentially a tax for business, the specifics of its calculation and payment affect mainly ordinary consumers. Therefore, it is not surprising that an increase in VAT leads to higher prices for certain goods and services.

In the Russian Federation, value added tax was introduced on January 1, 1992 by the resolution of the Supreme Court of the Russian Federation “On Value Added Tax” with a record rate of 28% to this day. However, already in 1993 it was reduced to 20%, and in 2003 to 18. Currently, the unfavorable economic situation has forced the government to again raise the VAT level to 20%.

Conventionally, value added tax can be divided into two large groups:

1. Domestic VAT is paid on the sale of goods and services on the territory of the Russian Federation.
2. Import VAT is paid when importing goods into Russia.

Who pays: the buyer or the seller?

Since VAT is an indirect tax, it is levied throughout the sale of goods or services. This leads to the fact that funds enter the budget even before the end consumer purchases the product or service. Sellers, in turn, include the cost of paying VAT in the final cost of the goods. Thus, funds are returned to the company or organization after the sale of the goods. Be that as it may, if you look from the consumers’ side, the payment of VAT ultimately falls on their shoulders.

If we consider VAT from the side of businessmen (companies and organizations), where the buyer is, say, a store, and the seller is a manufacturer of goods, then the situation is somewhat different:

1. The seller, transferring the rights to the property of a product or service to the buyer, simultaneously calculates and presents to him the amount of VAT, indicating it in the invoice. After this, the buyer transfers this amount to the seller. Despite the fact that the costs of paying VAT remain on the buyer, in fact, the money comes to the budget from the seller.
2. When goods are purchased from foreign organizations that are not registered with the tax authorities, the buyer pays VAT to the budget. In this case, the amount of value added tax is withheld immediately upon transfer of funds to a foreign counterparty.

Despite the fact that the legislation imposes the payment of VAT on the seller, ultimately it is the consumer’s wallet that suffers. The only exception, perhaps, is the receipt of goods or services free of charge. In this case, the seller must pay VAT himself.

VAT rates

Currently, there are three types of value added tax rates in effect in the Russian Federation:

1. 0% - for goods or services exported during the export process or under the customs procedure of a free customs zone.
2. 10% - food, children's and medical products, as well as periodicals.
3. 20% is the general rate applicable in all other cases.

There are also rates of 10/110 and 20/120, which are applied when receiving an advance or determining the tax base in a special manner. For example, when selling agricultural products or cars purchased from individuals who are not taxpayers.

Formulas for calculating value added tax

VAT is calculated using a fairly simple formula:

VAT = Price of goods or services (excluding tax) * 20%

For example, the price of a washing machine excluding tax is 20 thousand rubles. Then, VAT = 20,000 * 20% = 4000. It turns out that the end consumer, when purchasing such a washing machine, must pay 24 thousand rubles (price of the machine + VAT).

VAT = product price (with tax) * 20/120

For example, when buying a TV, a consumer paid 35 thousand rubles. To understand how much tax was included in the price of the TV, we substitute the corresponding value into the formula indicated above: VAT = 35,000 * 20/120 = 5833. That is, without VAT, the TV would cost 29 thousand 167 rubles.

Exemption from VAT

Organizations and individual entrepreneurs that pay taxes according to special systems are exempt from VAT. Such systems include:

1. Unified tax on imputed income for certain types of activities (UTII).
2. Taxation of agricultural producers (UST) - since 2019, the exemption is valid only if a number of conditions are met.
3. Patent taxation system (PTS).
4. Simplified taxation system (STS).
5. Participants of the Skolkovo project (organizations that have received the status of participants in scientific, technological and research activities).

It is worth noting that the above-mentioned organizations and individual entrepreneurs are not exempt from paying VAT if they issue an invoice to the buyer (a document that certifies the actual shipment of goods or provision of services, including their cost).

Where do the funds received from VAT go?

Value added tax is one of the main taxes existing in the Russian Federation. VAT provides 1/3 of all revenues to the state budget and ranks second after oil and gas.

Funds from the federal budget, in turn, are used for the following purposes:

• payment of benefits, subsidies and benefits;
• assistance to the poor and rehabilitation of the disabled;
• development of medicine, education, youth policy and agriculture;
• support for the armed forces;
• environment protection;
• support of museums and various sanatoriums;
• Scientific research.

Simultaneously with the increase in the VAT rate, the period for desk audits has decreased, which should have a positive impact on business. The fact is that all value added tax payers submit declarations, which first undergo a desk audit. Before January 1, 2019, such verification took three months. Now this period has been reduced to two months. The positive point is that the money from the tax refund declared will be returned to companies and individual entrepreneurs faster, rather than hanging in the budget.

However, not everything is so rosy. If the submitted declaration raises suspicions, the period for the desk audit may be extended to the same three months. Thus, only law-abiding taxpayers benefit.

Why did the value added tax increase?

As mentioned above, the budget receives its main income from the sale of oil and gas. These revenues have now declined as oil and gas products have fallen in price. The current situation forced the government to resort to increasing VAT. In general, this measure will allow the funding of important government programs to continue.

Raising the value added tax will also support existing social programs. For example, some of the preferential types of mortgages, maternity capital, landscaping of yards, etc. According to government estimates, an increase in the VAT rate will additionally bring the budget about 620 billion rubles a year. By the way, if you divide this amount among the entire population of the Russian Federation, it turns out that the VAT increase will cost one Russian citizen 360 rubles per month.

Advantages of increasing VAT over other methods:

• VAT is collected better than other taxes;
• automatic payment verification system;
• complexity and danger of tax evasion.

In addition, increasing VAT is a very favorable decision compared to other scenarios. Thus, the matter could end with an increase in personal income tax, the abolition of benefits, tightening the conditions of state support, or even the abolition of maternity capital or other social assistance. By the way, the funds received from the value added tax are still not enough to implement all the presidential decrees. In total, their implementation requires about 8 trillion. rubles that need to be collected by 2024. VAT will not bring even half of the required amount.

Impact on commodity prices

Prices are rising not only because of VAT. Despite the fact that the rate of this tax has remained unchanged over the past 14 years, until 2019, of course, prices were still increasing. They grew despite the Central Bank's rate cut and favorable conditions for lending to individual entrepreneurs. VAT on gasoline has not increased, but its price has increased. In general, pricing for goods and services is a complex issue, and value added tax alone does not solve everything.

Despite the fact that the VAT rate on food, children's and medical products will remain at the same level (10%), their prices will still increase. That is, an increase in the general rate to 20% will still make itself felt. For example, the price will increase due to increased delivery costs due to new MTPL tariffs, as well as the increased price of gasoline.

Some products are not subject to VAT at all, for example, services and goods sold by entrepreneurs paying tax under special systems (UTII, PSN, simplified tax system, etc.). However, even in this case, the price may increase for a number of reasons: an increase in rental costs, an increase in employee wages.

The price increases will most affect expensive goods, such as cars. The fact is that in absolute terms, the added value on them is much higher, and accordingly, the tax is higher. It turns out that families who spent their money mainly on goods with VAT of 0 or 10% will not notice the increase in the rate to 20%, while wealthy citizens will feel it fully.

Comparison of tax burden with other countries

Value added tax is present in many countries and on average is the same 20%. However, comparing the tax burden on citizens solely based on VAT is not entirely correct:

• Canada – low VAT (from 7 to 13% depending on the province), but tariffs for insurance premiums are significantly higher than in Russia;
• USA (from 0 to 10% depending on the state), Luxembourg (17%), Denmark (25%) - replenish the budget mainly thanks to personal income tax, which is significantly higher than ours;
• Germany and Austria (19 and 20% respectively) – high social payments;
• UK – VAT 20%, but personal income tax – 45%;
• Italy – VAT 22%, income tax from 22 to 42%.

But what’s really bad is that in all of the above countries, loan rates are significantly lower than in Russia. However, this does not change the fact that comparing the economic situation only based on value added tax looks stupid. For example, in Russia the average payment for utilities is 3 thousand rubles, and in European countries - 300 euros. At the same time, drinking water is saved there, and garbage has to be sorted.

The main thing about VAT in 2019

Thus, we can draw conclusions:

1. The rate has increased to 20%.
2. Preferential rates have not changed - where there were 0 and 10%, there will remain 0 and 10%.
3. An increase in the VAT rate will lead to an increase in prices by an average of 1.7%.
4. The time frame for checking VAT returns has been reduced. Previously it was three months, but in 2019 it became two.
5. On average, the VAT increase will cost each Russian 360 rubles per month.
6. The Russian Federation budget will receive an additional 620 billion rubles per year.

In contact with

The tax system has many branches. Therefore, citizens are required to pay various types of taxes.

Value added tax is an important tool of the system. It is necessary both for the product manufacturer and for the state.

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Many people, when faced with this abbreviation, cannot determine who pays VAT, as well as how much tax is charged. To understand this, it is necessary to consider some features of the calculation.

The essence of the definition

VAT is considered a complex tax, which is paid by enterprises with a general taxation system. In this case, it is possible to receive a tax deduction or exemption from VAT.

The tax is calculated on the cost of the product, which is the difference between the final price and the amount spent on materials during its manufacture. VAT affects the cost, which is why manufacturers should give priority to the tax. And for this, it is necessary to organize accounting at the proper level.

Documentary support is important for:

• reflecting the cost of products that were sold;
• identifying the price of purchased materials;
• value added tax paid by buyers and suppliers.

After production of the goods is completed, the products are sent for sale. The cost must include the costs spent on production.

The final price consists of several indicators, which include:

• profitability value;
• excise tax;

To apply the tax deduction, an invoice is drawn up. It must be stored in the enterprise for three years.

Calculation algorithm for dummies

In order to determine how much VAT should be paid, it is important to consider the calculation algorithm for dummies. This can be done using a specific example.

An entrepreneur decides to sell jackets at retail. He must decide on a wholesale supplier.

The amount of goods purchased was 100,000 rubles, with one jacket costing 10,000 rubles. The price of products automatically includes VAT paid by the supplier and the buyer. Overpaid funds are considered as an incoming contribution or deduction.

For further resale, it is necessary to prove the inclusion of VAT in the amount (it is not 10 percent, as many people think, but 18%). This can be confirmed using an invoice or delivery note.

To form the final price, VAT is deducted from the cost of the goods. The amount received will be required to calculate the tax.

To calculate, an individual entrepreneur must:

• multiply the cost of the product by 18 (100,000*18);
• divide the resulting number by 100 (1,800,000/100);
• receive VAT in the amount of 18,000.

To determine the amount including VAT you must:

• multiply the cost of the goods by 18 (100,000*18);
• divide the resulting amount by 100 (1,800,000/100);
• add the resulting value with the original value (100,000+18,000).

Main caveats

Responsibilities of the seller and buyer

Not all entrepreneurs know who pays VAT, the buyer or the seller. Tax payment is made by both entities in several cases.

Tax is charged by the seller at the time of transfer of ownership of the products sold. Moreover, the agreement provides for the payment of VAT even in case of gratuitous transfer. Therefore, payment is made by the buyer without fail.

In some cases, the tax system does not provide for the calculation and payment of tax. The list of transactions is prescribed in the Tax Code of the Russian Federation in Article 149.

The tax remitted by the seller is the difference between VAT and input tax for goods purchased or services provided.

Buyers often wonder whether it is possible and necessary to pay VAT when purchasing goods. The tax is transferred to the budget by the buyer when purchasing goods from foreign companies that are not registered with the Russian tax authorities.

A similar system is observed at the time when state and municipal property is rented. In this case, organizations or individuals are tax agents.

The agency agreement provides for the calculation of VAT and its deduction from income with further transfer to the state budget. Thus, the company is an intermediary between the payer and the state.

Subject Verification

The Federal Tax Service can inspect enterprises and legal entities for violations of tax laws. Inspections can be initiated on the basis of Chapter 14 of the Tax Code of the Russian Federation.

Inspectorate employees are authorized to:

• receive an explanation for a particular transaction from the payer or tax agent;
• check accounting and reporting documents;
• inspect the premises;
• remove some papers.

You can check the activities of an LLC during a desk and on-site inspection. In the latter case, tax officers work at the location of the enterprise. Desk audits are carried out at the territorial location of the tax service authority.

Control is carried out over the last three years. Tax inspectors visit once a year. It can last up to three months maximum. Based on the results of the work, the tax service draws up a report. If an enterprise wishes to return VAT, tax authorities make a decision on whether to refund or refuse it.

When on UTII

Some taxpayers pay VAT, even if the simplified tax system, UTII or unified agricultural tax are used when calculating taxes. Special tax regimes do not exempt from adding value. This is due to the fact that some activities cannot apply such taxation systems.

Therefore, enterprises must keep VAT records on purchased goods in accordance with taxable and non-taxable transactions, even if a simplified form is used. If these rules are ignored, the payer will not be able to return the VAT amount.

Who is obliged to pay VAT

To pay VAT, registration with the tax authorities is not required. After all, an enterprise or individual entrepreneur is already registered as taxpayers in all systems. Therefore, companies working with VAT must automatically contribute funds to the budget.

Among the payers of value added tax are:

Exceptions are companies that use simplified and special tax regimes.

Refund Features

VAT may be refunded to an entrepreneur in some cases. This is available when making a deduction larger than the accrued tax amount. The obligation to pay it does not disappear. But the overpayment is returned to the entrepreneur upon his application.

This must be done within three years after the right to compensation arose. After the application, the tax office verifies the application and the company's tax system.

Three years begin to count from the end of the tax period in which the overpayment was identified. The audit is carried out within three months after filing the declaration. If the data is entered in parts (addition, change of declaration), then the three-month period is renewed.

If tax authorities identify errors or inconsistencies, the entrepreneur is sent a notification indicating them. In case of detection of serious violations, a report is drawn up within five days from the moment of detection. It is delivered in person or by post.

If the enterprise disagrees with the wording, the Federal Tax Service’s specialists respond to the letter with an objection. The document is submitted within two weeks. The tax authorities make an appropriate decision within 10 days.

When a company is re-registered, the refund is carried out by the new tax authority. The entrepreneur turns to the service that is localized in his place of residence.

If the company cannot carry out the reimbursement on its own, then specialized firms can provide consulting services. They will prepare documents for the tax office and help you return overpaid VAT.

Is it possible to avoid

All legal entities and enterprises carrying out foreign trade activities must pay VAT. Exemption can only be provided if the company’s income in the previous quarter was less than 2,000,000 rubles.

To obtain an exemption, you must contact the tax service with the documents in hand. The entrepreneur must draw up an application on the basis of which he is granted payment benefits for a year.

Repeated appeal is possible on the same grounds. However, if you receive a monthly amount greater than that stipulated by law, payment of VAT is mandatory.

Temporary exemption from VAT is not possible when carrying out export and import operations, as well as the sale of excisable goods. Funds are transferred from any transactions, including advance payments.

Calculations must be made carefully. If mistakes are made and the tax is not paid in full, the company may suffer serious financial losses.

However, overpaid funds may also not be returned. After all, the budget is filled with the help of taxes. Therefore, it is important to make calculations with particular accuracy.

Nuances of liberation

Exemption from VAT is granted on the basis of Article 145 of the Tax Code of the Russian Federation. Enterprises that have made a profit of less than two million rubles in three months may not deposit funds.

To use this right, an entrepreneur must have invoices with notes indicating that VAT is not charged and keep accounting journals. It is also mandatory to provide documents about the discrepancy between revenue and a certain amount.

If the income exceeds the benefit, the benefit is removed from the enterprise. From the first day of the new month, payments are made in full.

Individuals and legal entities who use:

• Unified Agricultural Sciences;
• patent system;
• UTII.

Only enterprises that themselves submit an application to the Federal Tax Service can be exempt from VAT. If they do not do this, there will be no refund.

Sometimes transactions do not require VAT. Then no tax is payable. Among such transactions are the transfer of property on account of the authorized capital.

The Tax Code specifies a list of transactions that do not include VAT. It is important to review it regularly as legislation changes rapidly. Therefore, legal entities and individuals, without realizing it, can violate the law.

If the counterparty does not comply with the conditions

Many enterprises, when choosing partners, prefer cooperation with VAT payers. This is because tax withholding can be used later.

But sometimes counterparties do not pay value added tax due to the law or unwillingness to contribute funds. If the company operates and is located abroad, and VAT is not paid when drawing up the agreement, the taxpayer himself must pay the required amount. This norm is stated in letter of the Ministry of Finance No. 03-04-08/156, prepared on July 20, 2006.

Many companies are not happy about this outcome of events, since money leaves their budget. But on the basis of paragraph 3 of Article 171 of the Tax Code of the Russian Federation, it is possible for an enterprise to receive a tax deduction.

Payment of VAT is a complex topic for many individuals and legal entities. Therefore, it is important to have a competent accountant on staff or use the services of third-party specialized companies.

Attention!

• Due to frequent changes in legislation, information sometimes becomes outdated faster than we can update it on the website.
• All cases are very individual and depend on many factors. Basic information does not guarantee a solution to your specific problems.

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For many people, the tax system looks like a tangled web, especially when it comes to VAT. The most frequently questioned question is who pays VAT and who should not do so.

VAT is a very important type of tax. Its peculiarity lies in its dependence on the cost of the goods being sold. A product divided into several categories is eligible for a certain percentage of the tax rate. In most cases, the 18% rate applies, which is the highest. And although everything seems to be clear with the rates themselves, the question of who should pay them and who is the taxpayer often hangs in the air.

Who should pay VAT?

So who still needs to pay VAT? The Tax Code clearly states that VAT payers are:

• Legal entities and other businesses: This includes any business, whether commercial or not.
• Individual entrepreneurs or individual entrepreneurs.
• Citizens of the country: people involved in the delivery of products through the customs point.

A number of other persons can be classified as VAT payers. Conventionally, they can be divided into two groups. One includes those who pay internal VAT - this applies to citizens selling products within the country. The other group includes persons involved in importing products into the country.

Based on the list of persons who are tax payers, we can say that VAT is paid in tandem. That is, at the time of purchasing the product, the buyer already pays the accrued tax on the product. But it goes to the country’s budget thanks to the participation of the seller in this process. Therefore, it is very difficult to say exactly who pays VAT, the buyer or the seller.

If the case concerns products received by the seller free of charge, then the seller is obliged to pay VAT from his receipts. This also applies to cases when the goods are transferred into the ownership of other persons or the seller provides a certain type of service. The seller also pays taxes when carrying out such operations as the delivery of goods through customs, construction and other types of work.

Detailed explanations are presented in this video:

Who is not a VAT payer?

Tax legislation provides a list of tax-exempt transactions. Persons involved in the process of currency circulation and conversion are not recognized as VAT payers. Also not subject to tax are situations related to property that is transferred for investment under a concession agreement or given to a non-profit organization.

There is no need to worry about paying taxes and people associated with the gratuitous transfer of property, provided that it has cultural or social significance. Similar rules apply to residential premises. Services provided by government agencies are also not subject to tax. This group also includes persons engaged in advocacy, diagnostic and repair work carried out on domestic and foreign equipment.

There is also a certain number of entrepreneurs and organizations that have the opportunity not to pay VAT. These include:

• Firms and individual entrepreneurs using the Unified Agricultural Tax.
• Organizations that have a patent tax system.
• USN, this type of taxation allows you to avoid paying VAT.
• Persons who have the property provided for in Article 145 of the Tax Code.

Most companies and firms that do not use the simplified system are required to regularly pay VAT. But companies that pay VAT can avoid paying it. If the company’s development is progressing slowly and the revenue at best is 2 million rubles in three months, then it becomes eligible to receive defaulter status.

This right can be used by any company that has a long period of activity and a low level of revenue for a quarterly period, not exceeding 2 million rubles. The duration of the defaulter status is one year. If, after the specified period, the company’s financial position has not improved, then it can extend its defaulter status for another year. During this period, in order to maintain the status of the company, it will not be possible to carry out transactions with excise taxes and exceed the permissible revenue threshold.

But getting rid of VAT is unlikely to bring significant benefits, since the conditions for receiving it have a negative impact on the development of the company.

When to pay VAT?

Tax payment is credited only after submitting a document with information about the company’s activities to the tax authorities. The last day for accepting the declaration, when VAT payers can still avoid delays in submitting the document, is the date. Payment of tax is carried out partially. That is, the amount of tax calculated for the past period must be divided into three equal parts. Each part of the amount is paid in the following months following the previous tax period.

For example in 2017:

VAT is a complex tax and can be paid by both the seller and the buyer. Who exactly should pay depends on several factors, including the product category and who is selling the product.