Each relatively large business entity has at least once encountered the procedure for refunding VAT for one reason or another. Not always attempts to return own funds were successful, since this procedure has a lot of nuances, which we will try to understand in this article.
VAT refund: key concepts
We all know that to a greater extent the federal treasury is replenished by systematic and regular contributions of taxpayers. Moreover, the largest part of such budget replenishment is occupied by value added tax (hereinafter referred to as VAT), which is paid by almost all business entities that have the status of a legal entity. The only exception is enterprises operating under the simplified tax system.
VAT as an independent duty is involved in a number of standard operations that are daily encountered in the enterprise’s turnover process:
- operations for the sale of both goods and services, which can also include barter interchange, and free transfer;
- receiving cash related to advances for services rendered or goods sold.
An important role in the activities of a business entity is played by such a process as VAT refund. Since, in simple terms, who will refuse to return the state already paid funds to the treasury? This procedure is complicated and has quite a few pitfalls, which we will try to understand.
State regulation
The program “VAT refund” is regulated by the current legislation of the Russian Federation, namely, article 176 of the Tax Code. Why is the process complicated and difficult to accomplish? It's simple: the return of value added tax is not a specialized procedure of these fiscal authorities, therefore, it is carried out without much enthusiasm.
Nevertheless, the current legislation provides a number of reasons why the compensation should still take place:
- If according to the results of the declaration for the reporting period, the tax credit exceeds liabilities.
- As a result of a desk or field inspection by fiscal authorities, a distortion of VAT accounting data was revealed.
- If representatives of the executive branch deny the probability of tax refunds, then such situations can be resolved by filing appeals and arbitration disputes.
VAT and export operations
We all understand that attracting a share of foreign capital is an important task for each country, and the Russian Federation is no exception. Therefore, the current government bodies are interested in the fact that domestic goods entered the consumer market on an international scale. In this regard, it was decided that VAT refunds on exports are an important lever in stimulating the development of foreign trade.
In order to declare the existence of an export operation and return the value added tax paid, it is necessary to provide a number of documents confirming the fact of relations with foreign buyers. This may be a contract for the provision of services or goods, a bank statement with the relevant customs operations and transport declarations confirming delivery.
It is very important to provide a package of documents in full and to ensure that the papers are correctly executed, since in practice the percentage of failures by the fiscal authorities is quite large.
How to recover VAT upon import
When importing imported goods, VAT refunds are only advisable if the business entity has paid more tax at customs than it needs according to the results of the documented information in the reporting period. Yes, everything is not as rosy as with export, since the state is not so interested in the population consuming foreign products.
Reimbursement of VAT on an import transaction can be considered if the taxpayer has fully confirmed the existence of a relationship with a non-resident supplier. This means that he needs to submit to the fiscal authorities a formalized contract, payment invoices and an international agreement passport, which has been confirmed by banking institutions. At the same time, third parties should not participate in the transaction, which directly indicates the participation of specific companies in the supply and payment of a particular product.
Is it possible to refund VAT for internal operations?
Of course, in order to return the excessively paid tax, it is not necessary to purchase goods on the foreign market. Therefore, even if the turnover occurs within the country, the current legislation also provides for such a procedure as VAT refund. Documents that confirm the fact of the transaction do not need to be presented in full: to provide any confirmation of economic relations to the fiscal authorities, only the invoice for the transaction is sufficient.
At the same time, at the time of the application for the return of the amount of tax paid, the necessary movements should be reflected in the accounting registers, and the purchased goods or service paid, and most importantly, the operation should be subject to VAT.
How to apply for a refund
An application for a VAT refund can be submitted by any legal entity that is a payer of this duty, but, unfortunately, not everyone can officially speed up this process.
According to the current legislation, namely Article 176 of the Tax Code of the Russian Federation, as well as current explanatory letters from the Ministry of Finance, the right to accelerated compensation is granted to business entities whose compulsory payments to the state budget over the past 3 years amounted to at least 10 billion rubles. In this case, customs duties and fees are not taken into account.
VAT refund procedure
The procedure for VAT refunds, as a rule, is the same both with the planned procedure and with the accelerated one. The only difference is the timing of the decision by the fiscal authorities.
So, the taxpayer filed an application for VAT refund. Next, the executive authorities consider the adopted documents for completeness and accuracy of drafting, and if the package meets generally accepted requirements, then a desk tax audit procedure is organized. During this period, the business entity has the full right to adjust the declared tax amount, for this he needs to file revised declaration.
If, according to the results of a desk audit by fiscal authorities, the legitimacy of the requested return was proved, then the return of the paid value-added tax is prepared within the time period established by law. The timing of VAT refunds may vary, but they should not exceed 11 business days. Otherwise, the taxpayer has the right to appeal the decision of representatives of executive authorities in the courts of various instances.
State position
On the sidelines of the higher instances of fiscal authorities, the question has repeatedly been raised that the procedure for the return of value added tax to business entities is rather complicated and contradictory. Therefore, it will be desirable to introduce a process to simplify it.
So, at the beginning of this year, in connection with the crisis that arose several months ago, which affected primarily the foreign policy of the state, it was decided to review the procedure for filling out such a complex procedure as VAT refund.
Modern representatives of large business offer fiscal authorities to adopt reforms containing three positions:
- If the entrepreneur stated in the declaration a desire to return the amount of tax paid, then representatives of the executive authorities do not need to request a full package of documents during a desk audit on operations carried out during the reporting period.
- The term of a desk tax audit, in turn, should not exceed 30 calendar days.
- Not only business entities, the amount of payment of duties of which in recent years is more than 10 billion rubles, should have the right to declare an accelerated VAT refund process. The lower threshold must be reduced to 1 billion rubles.
But we all understand that the simplification program is at the initial stage at the moment, and so far no one is able to predict when it will see the light and whether it will see at all.
findings
The VAT rate is high enough to neglect the chance of reimbursing the amount paid to the treasury, if, of course, there is one. Therefore, the modern business entity must, in an appropriate measure, carefully and efficiently form a package of documents if there is no desire to return funds through the court in the future. More details about the rules for tax refunds can be found in the publications of the current legislation, namely in article 176 of the Tax Code of the Russian Federation.
