Sales of real estate included in goods

Are sales transactions taxable?

Value added tax is not always paid when buying and selling real estate. Speaking about VAT, it should be understood that it is calculated, and therefore subject to reimbursement, only on transactions in which one or both parties are legal entities. Individuals pay personal income tax only if the sale of the premises is carried out within the first five years after acquiring ownership of the property.

Residential real estate transactions:

VAT is subject to VAT if a residential building is sold that has not been put into operation.
Not subject to VAT on the sale of completed objects - apartments, rooms, houses, shares in premises.

When buying and selling commercial real estate, VAT is paid on the amount received from the sale.

In the Russian Federation, the VAT rate from January 1, 2019 is 20%. Depending on the situation, it can be calculated from profit or revenue.

Why can’t a VAT refund be issued to an individual?

Value added tax is an indirect tax , which is calculated based on the cost of all stages of production and side expenses. In fact, the burden of this tax falls on the consumer of the service or product.

Reference. VAT is paid only by legal entities, that is, organizations that can subsequently claim deductions for the payment of this tax. Individuals - ordinary citizens of the Russian Federation - are not subject to value added tax, and therefore have no right to claim a refund.

An individual with income pays 13% of it to the state through monthly deductions of the required amount by the employer, who transfers it to the Federal Tax Service. If a citizen buys real estate, then an income tax refund (NDFL) is possible in the amount of 13 percent of the purchase amount or the size of the mortgage loan.

Who pays and when?

In accordance with Chapter 21 of the Tax Code of the Russian Federation, payment of VAT is assigned to the seller in cases where ownership rights to the goods sold are transferred . When selling real estate, the fact of the transaction is secured by an agreement on the transfer of rights, which is registered in Rosreestr. The costs of paying value added tax are borne by the party that received funds for the sale of the object.

As for the deadline for paying VAT, there are often many disagreements with it. The difficulty lies in the fact that, according to the law, ownership rights arise only at the time of state registration of the purchase and sale transaction.

In fact, the transition date is recognized as the day when the corresponding entry is made in the Unified State Register. But the final registration procedure takes a lot of time, sometimes up to several months. At the same time, the accountant faces a dilemma when exactly to make calculations and transfers.

To resolve the dispute, an additional clause 16 was added to Article 167 of the Tax Code of the Russian Federation. It contains clear instructions that the tax calculation date is the day of bilateral signing of the transfer deed for the property.

Conditions for the requirement

VAT refund when purchasing real estate by an individual is a myth. Such transactions are not subject to the corresponding tax. And therefore there is no way to compensate for it. Instead of VAT, personal income tax is returned.

But not all citizens have such a right. The potential applicant must meet certain conditions. They will be as follows:

presence of Russian citizenship;
a person must transfer income tax to the state treasury at a rate of 13 percent;
official employment;
making a transaction on your own behalf;
registration of purchased real estate in your name.

In the case of pensioners and the unemployed, everything is not as simple as it seems. It can be assumed that these categories of the population do not have the right to deduction. But this is not an entirely true statement.

These citizens can request a VAT refund when purchasing an apartment. They retain the corresponding powers for another three years from the date of termination of payment of income tax at the previously specified rate.

But it is more difficult for entrepreneurs to obtain tax refunds when purchasing real estate. The thing is that only individual entrepreneurs and legal entities working under OSNO can use this authority. Special tax regimes in the Russian Federation do not allow claiming deductions.

At what point should I take it for deduction?

The Tax Code of the Russian Federation provides for the possibility of reducing the tax base by the amount of tax deduction established by law. You can receive a deduction only if you follow a number of rules :

The purchased object is used for operations that are subject to VAT.
The buyer has an invoice from the seller.
The purchased property is included in the organization's accounting records.

If the required conditions are met, only one question arises when the calculation can be made. The VAT tax deduction is theoretically also applicable from the date of actual transfer of rights, but the opinions of different departments on this issue are divided:

The Ministry of Finance believes that it is necessary to deduct VAT only after the object has been placed on the balance sheet of the enterprise, that is, after entering information into the Unified State Register of Real Estate.
The courts take a different point of view and believe that it can be resorted to after the funds for the property have been transferred.

The last paragraph of the requirements for the use of a tax deduction indicates that it can be applied no earlier than the property right is registered in the Unified State Register of Real Estate.

Design Guide

A VAT refund for the purchase of a new apartment or real estate on the secondary market, with proper preparation, will not cause any special problems. Especially if we are talking about transferring money to an individual, and not to a company/entrepreneur.

To obtain a VAT refund when purchasing an apartment, it is recommended to adhere to the following guidelines:

Find out whether the potential applicant has the credentials mentioned.
Prepare documents for tax deductions.
Fill out the application in the prescribed form and then submit it to the authorized service.
Wait a while. The citizen should receive a response from the Federal Tax Service regarding the return of money for the transaction.

As a rule, if the request is approved, the Federal Tax Service will transfer funds in the established amounts to the applicant’s account. Typically this process takes about two months.

Accounting

Paragraph 1 of Article 167 of the Tax Code of the Russian Federation establishes the deadlines for calculating the tax base. They are determined for real estate according to the following parameters:

Time of transfer of rights to real estate.
Payment of full or partial amount of funds for the future transfer of rights.

The day that comes earlier in time is taken into account for calculation. It is important that an invoice is issued within the first five days after payment or transfer of the buyer's rights.

At the moment of transfer of ownership of the object, the seller writes it off from the “Fixed Assets” account, and the buyer puts it on his balance sheet. Accrual of depreciation payments stops on the 1st day of the month following the period of actual transfer.

When does the moment of determining the tax base arise?

According to the general rule (clause 1 of Article 167 of the Tax Code of the Russian Federation), the moment of determining the VAT base is the earliest of the following dates:

the day of shipment of goods (works, services), transfer of property rights;
day of payment, partial payment for upcoming deliveries of goods (performance of work, provision of services), transfer of property rights.

Otherwise provided for in paragraphs 3, 7 - 11, 13 - 15 of Art. 167 Tax Code of the Russian Federation. We are interested in clause 3, which states: if the goods are not shipped or transported, but the transfer of ownership of it occurs, such transfer of ownership for the purposes of calculating VAT is equivalent to its shipment. However, as of July 1, 2014, an exception also appeared to this rule - clause 16.

When selling real estate, the date of shipment for the purposes of this chapter is the day of transfer of real estate to the buyer of this property under a transfer deed or other document on the transfer of real estate.

Another exception that needs to be paid attention to is clause 14, on the basis of which if the moment of determining the tax base is the day of receipt of the advance payment, then on the day of shipment of goods (performance of work, provision of services) on account of the previously received payment, the moment of determining the tax base also arises bases.

Thus, when selling real estate, the moment of determining the VAT base is:

the day of receipt of payment for the upcoming sale (if, based on the terms of the contract, the transfer of real estate is carried out on an advance payment basis);
the day of transfer of property to the buyer according to the transfer deed (other transfer document).

In this case, the moment of transfer of ownership, that is, the date of state registration of the buyer’s ownership of the acquired property, does not affect the time of determining the tax base, as it was before 07/01/2014.

At the same time, the Ministry of Finance in Letter dated December 17, 2015 N 03-07-11/74052 indicated that the moment of formation of the VAT base for the sale of real estate is determined before the date of state registration of the buyer’s ownership of this property. This approach does not always work, since state registration of property rights may well be carried out before the actual transfer of the property to the buyer. Therefore, there is no need to charge VAT before the transfer of the property due to the fact that state registration of ownership has been carried out. Confirmation of this can be found in judicial practice.

Return Policy

The tax legislation of the Russian Federation gives a hypothetical right to receive a property deduction to any taxpayer. Both individuals and legal entities can take advantage of the deduction, subject to a number of conditions.

The state reimburses previously collected taxes in the form of:

Personal income tax, if we are talking about individuals.
VAT for legal entities.

You can use the granted privilege by performing a number of required actions.

Is reimbursement possible for individuals?

For individuals, there is no such thing as a VAT refund when registering the purchase and sale of real estate. VAT is not calculated or collected from citizens who do not have legal status. They pay personal income tax of 13% (for residents) and 30% (for non-residents).

When purchasing housing, an individual has the right to return the personal income tax paid over the last two years, but not more than the maximum established amount. In accordance with the Tax Code of the Russian Federation, citizens can get back :

Personal income tax on 2 million rubles spent on the purchase of property.
Personal income tax on 3 million rubles, which were accrued as interest for the use of mortgage funds.

The benefit is available only to those persons who have officially worked for the last two years and paid taxes to the budget.

Features of calculation by legal organizations

A legal entity will receive a VAT refund if the following conditions are met:

There is documentary evidence of the transaction. An invoice, acceptance certificate, purchase and sale agreement, etc. are provided.
The transaction is real and was carried out exclusively for use in business activities and making a profit.
The goods have been capitalized, that is, the property has been accepted into balance sheet account 01 “Fixed Assets”.
The transaction has no dark spots along the entire process of execution, including counterparty links.

To receive a VAT refund, you must meet all the stated criteria at once.

How does VAT work?

Individual entrepreneur on UTII, simplified tax system and patent.
Participants of the Skolkovo project.
Individual entrepreneurs and companies are subject to any tax system if their revenue over the last three months is less than 2 million rubles. Even if the company is on the general taxation system. To obtain such an exemption, you will have to submit additional documents.

Input VAT is the VAT invoiced to you by your suppliers. This is the amount of VAT you must pay to suppliers along with charges for raw materials, supplies or equipment. It can be deducted from tax. It doesn’t matter to the tax authorities whether you paid the invoices from suppliers or not, so formally you can claim the entire amount of the invoices for VAT deduction.

common shared property, upon registration of which the amount of the due deduction is automatically divided in accordance with the shares of family members;
common joint property, when it is necessary to write an application to the tax office with a decision to distribute the deduction to all owners or in favor of one of them. This decision cannot be changed subsequently.

When purchasing real estate, both individuals and legal entities have the right to a property deduction. Only for individual taxpayers, the deduction is established for personal income taxes (NDFL), and for organizations - for the value added tax (VAT), which accompanies such transactions.

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The basis for the return is the purchase of housing (for example, an apartment) and the payment of mortgage interest. If you bought a home using a mortgage loan, you can get back not only a significant part of the funds paid for the home, but also part of the interest paid to the bank.

VAT refund when buying an apartment is a myth, that is, a misconception about tax refund. VAT is a value added tax. When they talk about tax refunds when buying housing, for example, an apartment, they mean personal income tax (and not VAT) - a tax on personal income.

The difference in the procedures for recovering VAT on fixed assets is determined by the fact that if the fixed asset is a piece of real estate acquired or built by the taxpayer in a contract or business manner, then for the subsequent restoration of VAT amounts previously accepted for deduction, the norm established by clause 6 of Art. 171 Tax Code of the Russian Federation. If the OS is not a piece of real estate, or was acquired by something else not specified in clause 6 of Art. 171 of the Tax Code of the Russian Federation, then in order to restore the amounts of VAT previously accepted for deduction, the norm established by paragraphs. 2 p. 3 art. 170 Tax Code of the Russian Federation.

The company was constructing a multi-apartment residential complex with non-residential office premises. The contracting organization completed the work, drew up the relevant documents and issued invoices to the company with the appropriate VAT. The Company accepted VAT for deduction in full. At the same time, the organization had no sales revenue.

Procedure

The procedure for VAT refund is regulated by Art. 176 Tax Code of the Russian Federation . It involves the following steps:

Collecting a package of documents that will confirm the need for a refund. It primarily includes an invoice, as well as a purchase and sale agreement, payment certificates and an extract from the sales and purchase books.
Entering data into the tax return. It contains information about the full cost of the purchased property, and also provides a calculation of the amount of VAT to be refunded.
Submitting papers to the Federal Tax Service.

The following steps are taken by the tax authority:

A desk verification of the declared information is carried out. Three months are allotted for its implementation.
Based on the results of the inspection, a decision is made to return the funds or refuse it.
The taxpayer is sent a corresponding written notice. If any violations are identified, the taxpayer is given 30 days to eliminate them and challenge the refusal to refund.
The refunded amount is transferred to the recipient's account.

The money is transferred within five days from the moment the decision on VAT refund is made.

Can they refuse?

Value added tax is generally not refundable. Instead, it means personal income tax. It is faced by various categories of taxpayers.

Do people really have the right to be refused when applying for a tax deduction? Yes, but the decision must be justified. The main reasons for denial of service include:

the person did not bring enough documents;
lack of official employment;
a person/organization pays personal income tax in a larger/smaller amount than 13 percent;
the tax return was drawn up incorrectly;
the documents used were declared invalid;
the person has exhausted the entire limit of funds for deductions for property;
The housing was not purchased with one’s own money, but with government support.

As practice shows, if the situation can be changed, it needs to be done in the next month after receiving a verdict from the Federal Tax Service. In such circumstances, you will not have to start applying for income tax deduction from the very beginning.

Difficult issues and bottlenecks

VAT refund, although it is a taxpayer’s right, is often intimidating due to the complexity of the procedure. Of particular concern to legal entities is the desk audit, which is carried out by the Federal Tax Service to establish the legality of the transaction and verify its real value.

To avoid complications, it is important that the seller does not disappear after the sale. The reliability of the selling party, as well as its relationship with the buyer, is checked first . Other factors are also important, for example, whether the seller pays VAT, whether he is authorized to conduct transactions, etc. These difficulties can only be avoided with a careful approach to the acquisition of property.

Another common problem when refunding VAT is confirming the source of income. You should be prepared for the need to collect and provide evidence that the funds spent on the purchase were obtained legally. During the audit, documents will be requested not only for the organization itself, but also for its counterparties.

Payment of VAT on sales and purchases, as well as its reimbursement, depends on a number of factors. Legal entities can reduce their expenses only if a number of legal conditions are met.

Tips for applicants

Interested in VAT refund when purchasing an apartment? Then you should remember these tips. They will help you cope with the task in the shortest possible time and without significant difficulties.

Lawyers recommend to the public:

Use only “fresh” documents when making deductions for real estate.
You can apply for an income tax refund within thirty-six months. If a citizen has taken out a mortgage, it is better to wait a little and then demand the money immediately for 3 years.
Before contacting the Federal Tax Service, carry out the full procedure for re-registration of housing in your name.
Treat existing sales and purchase agreements with care. It will be possible to restore them if lost, but this may take a very long time.
Do not expect a quick review of your application. Refunding your home income taxes is a long process. It generally takes from three to six months.

In fact, everything is simpler than it seems. Refunding VAT when purchasing an apartment in the Russian Federation is accompanied by paperwork, which is often intimidating. But if you prepare for the operation in advance, everything will go without problems.