VAT: transition period at a rate of 20% from January 1, 2021

General procedure for switching to 20% VAT

The new tax rate is automatically applied from 01/01/2019 to all shipments subject to 18% VAT - without exception. Including those contracts that were concluded in 2021 (and earlier) and transferred to 2021.

This means that there is no need to take any special actions in order to “legalize” the transition to an increased VAT rate. Nobody obliges you to change the terms of the contracts either. But, if you deem it necessary, you and your counterparties can adjust the settlement procedure and the contractual value.

Learn in detail how to audit transitional contracts and clarify the wording of their terms.

Still, the automatic transition to a new VAT rate does not mean that it will be easy. We all understand that in practice many problems will arise. Let's consider the main ones, based on the recommendations of the Federal Tax Service of the Russian Federation, given in Letter dated October 23, 2018 N SD-4-3/ [email protected]

Advance payment - in 2021, shipment - in 2021: at what rate to deduct VAT

The first and most important thing sellers . If in 2021 you receive an advance on account of future supplies, then VAT on the advance will be calculated at the rate of 18/118 (clause 3.4 of Article 164 of the Tax Code of the Russian Federation). However, when shipping in 2021, you will be charged VAT at a rate of 20%. PDF What VAT is allowed to be deducted when offsetting an advance payment in 2021? Only at the old rate - 18/118.

In 2021, an agreement for the provision of services was concluded between the parties. The price includes VAT, so the total amount under the contract in 2021 will not change due to changes in the VAT rate (20%).
10/24/2018 The selling organization received a 100% advance payment under the service agreement in the amount of RUB 118,000. (including VAT 18% - 18,000 rubles), put SF on advance payment.
On January 15, 2019, on account of the advance received, the Organization provided services worth RUB 118,000. (including VAT 20% - 19,666.67 rubles), put up the SF for sale.
She will only accept advance VAT in the amount of 18,000 rubles for deduction. - the same as was calculated in 2021.

In turn, the buyer , who took VAT as a deduction from the advance payment transferred in 2021, will restore the tax in 2019 also at the rate of 18/118 (clause 3, clause 3, article 170 of the Tax Code of the Russian Federation).

You cannot use old electronic formats of invoices and UPD

Let us remind you that there are two types of invoice and universal transfer document (UDD) formats. New formats, applied from February 2, 2021, were approved by order of the Federal Tax Service of Russia dated December 19, 2021 No. ММВ-7-15/ [email protected] Outdated ones - by order of the Federal Tax Service of Russia dated March 24, 2021 No. ММВ-7-15/ [email protected] ] Until the end of 2019, obsolete formats were allowed to be used along with new ones.

From January 1, 2021, this cannot be done. Sellers of goods, works and services can only use those formats of VAT documents that are approved by Order No. ММВ-7-15 dated December 19, 2021/ [email protected]

The new formats take into account the VAT rate of 20%. In addition, additional indicators have been introduced into the invoice form: “code of the type of goods in accordance with the unified Commodity Nomenclature of Foreign Economic Activity of the EAEU” and “identifier of the government contract, agreement (agreement) (if any).”

Order of the Federal Tax Service of Russia dated December 19, 2018 No. ММВ-7-15/ [email protected]

How to take into account the buyer's additional payment for advances

Due to the increase in the tax rate, the buyer, before the date of shipment, in addition to the advance payment transferred in 2021 for supplies in 2019, can pay the seller 2% VAT.

In this case, three situations are possible:

Example 1: Buyer transfers 2% in 2021

If the buyer transfers 2% in 2021, this will be an additional tax payment . The seller receiving such a surcharge must issue an adjustment invoice for the difference between:

VAT taken from the primary invoice issued at the rate of 18/118,

And

VAT calculated at the rate of 20/120 (including additional tax). PDF

In 2021, an agreement for the provision of services was concluded between the parties. The price does not include VAT, so the total amount under the contract in 2021 will increase due to changes in the VAT rate (20%).
11/05/2018 The selling organization received a 100% advance payment under the service agreement in the amount of RUB 118,000. (including VAT 18%), put the SF on advance. The buyer is a VAT payer.
On January 21, 2019, an additional VAT payment in the amount of RUB 2,000 was received from the buyer.
On May 24, 2019, on account of the advance received, the Organization provided services worth RUB 120,000. (including VAT 20%), put up the SF for sale.

Show the difference between the VAT amounts indicated in the adjustment invoice in Section 3, page 070 gr. 5 VAT returns and take them into account when calculating the total VAT amount for the tax period. According to page 070 gr. Enter 3 declarations as “0”. PDF

If an additional payment of 2% in 2021 is made by a buyer who does not pay VAT , to whose address an invoice is not issued, then the seller reflects the additional payment in the sales book on the basis of a separate corrective document (accounting certificate) , which includes summary data on all such additional VAT payments for the month (or quarter).

Example 2: Buyer transfers 2% in 2021

If the buyer makes an additional payment of 2% in 2021, it is considered an additional payment of the cost , on which VAT must be charged at the rate of 18/118. In this case, the seller can:

issue an adjustment invoice for the difference in cost according to the model recommended by the Federal Tax Service. PDF

issue a regular advance invoice for VAT with additional payment at the rate of 18/118. PDF

In 2021, an agreement for the provision of services was concluded between the parties. The price does not include VAT, so the total amount under the contract in 2021 will increase due to changes in the VAT rate (20%).
11/20/2018 The selling organization received a 100% advance payment under the service agreement in the amount of RUB 118,000. (including VAT 18%), put the SF on advance. The buyer is a VAT payer.
On December 25, 2018, an additional payment of the cost in the amount of 2,000 rubles was received from the buyer.
Adjustment invoice
Invoice for advance received
On May 27, 2019, on account of the advance received, the Organization provided services worth RUB 120,000. (including VAT 20%), put up the SF for sale.

Show the additional payment received in Section 3, page 070 gr. 3 VAT returns. According to page 070 gr. 5 of the declaration, show the advance tax calculated at the rate of 18/118, take it into account when calculating the total amount of VAT for the tax period. PDF

Example 3: The buyer transfers the full amount of the advance in 2021, determined at a rate of 20%

By agreement with the seller, the buyer can increase the advance payment by 2% already in 2021 , essentially paying it at a rate of 20 percent. However, VAT on such an advance must be calculated based on the current rate for 2021 of 18/118 (clause 4 of Article 164 of the Tax Code of the Russian Federation), and for shipment in 2021, a rate of 20% must be applied. An adjustment invoice will not be needed in this case.

In 2021, an agreement for the provision of services was concluded between the parties. The price does not include VAT, so the total amount under the contract in 2021 will increase due to changes in the VAT rate (20%).
10/25/2018 The selling organization received a 100% advance payment under the service agreement in the amount of RUB 120,000. (including VAT 18%) on account of sales 2021, taking into account an increase in VAT by 2% (RUB 118,000 + RUB 2,000), put the SF on an advance. PDF
On January 16, 2019, on account of the advance received, the Organization provided services worth RUB 120,000. (including VAT 20%), put up the SF for sale. PDF

Which contracts may not be adjusted?

Submit your VAT return using the Kontur.Accounting web service. The system itself will generate a declaration based on primary documents and check it before sending. Get free access for 14 days

The contract can be left alone in the following cases:

if the contract provides for the seller’s right to increase the price unilaterally when the VAT rate changes;
if the price for a consignment of goods is established in additional documents to the contract;
if you apply 10% VAT;
if the contract specifies the price excluding VAT.

How to correct invoices for shipments made before 2021

As a general rule, invoices are corrected by the seller by issuing new, correct invoices. If you need to correct an invoice issued for a 2021 shipment in 2021, c. 7 of the corrected document, indicate the rate of the “shipping” invoice—18%.

Don't forget that in the new document:

page 1 does not indicate new details, but the number and date of the “rejected” invoice;
page 1a provides the serial number and date of correction.

How to return goods in 2019

This is a special case of the previous situation. Let's consider how both parties to the contract should act.

Recommendation for the seller

When returning goods in 2021, the Federal Tax Service recommends issuing an adjustment invoice for the cost of the returned goods, regardless of whether:

what year were they shipped?
whether registered by the buyer,
All or part of the product is returned.

At the same time, if the initial invoice contains a rate of 18%, then in gr. 7 of the adjustment document, indicate the same rate. Give one copy of the adjustment invoice to the buyer.

If a product is shipped in 2021, and is returned in 2021 by a VAT non-payer , register an adjustment document (accounting certificate) in the purchase book, including summary data on such returns for the month (or quarter).

Recommendation for the buyer

When returning goods in 2021, restore VAT based on the seller’s adjustment invoice (clause 4, clause 3, article 170 of the Tax Code of the Russian Federation), regardless of the period in which the goods were purchased.

How to switch to the new VAT for tax agents

This depends on the basis on which the tax agent is considered such.

Let's turn to clause 2 of Art. 161 of the Tax Code of the Russian Federation: when goods (work, services) are sold on the territory of the Russian Federation by foreign companies that are not registered with tax authorities in Russia, VAT is calculated and paid to the budget by buyers-tax agents (clauses 1, 2 of Article 161 of the Tax Code of the Russian Federation). The tax is paid simultaneously with the payment of funds to the foreign seller (final or advance). No VAT will be charged on subsequent shipments.

This means the following:

if an advance payment for supplies made in 2021 is transferred to a foreign company in 2021, then VAT is calculated by the tax agent based on the rate of 18/118;
if the buyer-agent pays a foreigner for goods (work, services) purchased in 2021 in 2021, VAT must also be calculated at the old rate of 18/118: after all, the 20% rate applies only to shipments in 2021;
If in 2021 a tax agent transfers an advance (or payment) to a foreign company for goods (work, services) purchased in 2021, then VAT is calculated based on the new rate of 20/120.

A similar procedure is provided for tax agents specified in paragraph 3 of Art. 161 Tax Code of the Russian Federation.

The nuances of applying VAT rates during the transition period for tax agents listed in clauses 2, 3 of Art. 161 of the Tax Code of the Russian Federation, are given in the table:

Situations	VAT in 2021	VAT in 2021
Payment (advance) - in 2021, admission - in 2019	Calculate VAT on the date of payment at the rate of 18/118, issue an invoice, register it in the sales book (code 06)	When shipping, deduct input VAT at the rate of 18/118, register the invoice in the purchase book (code 06)
Admission - in 2021, payment - in 2019	Do not charge VAT until payment is made	When paying, calculate VAT at the rate of 18/118, draw up an invoice, register it in the sales book (code 06) and purchase book (code 06)
Admission - in 2021, payment - in 2019 Read also: Accounting for finished products in 1C 8.3 - step-by-step instructions	—	Calculate VAT on the date of payment at the rate of 20/120, issue an invoice, register it in the sales book (code 06) and purchase book (code 06)
Receipt and payment - in 2021, the cost of shipment in 2019 has been changed upward	Calculate VAT on the date of payment at the rate of 18/118, issue an invoice, register it in the sales book (code 06) and purchase book (code 06)	Calculate VAT on the date of additional payment at the rate of 18/118, issue an invoice for the amount of the increase in cost, register it in the sales book (code 06) and purchases book (code 06)
Receipt and payment - in 2021, the cost of shipment in 2019 has been changed downward	Calculate VAT on the date of payment at the rate of 18/118, issue an invoice, register it in the sales book (code 06) and purchase book (code 06)	An invoice for the reduction in value is not drawn up (Letter of the Ministry of Finance of the Russian Federation dated 08.08.2018 N 03-07-08/56034). Excessively paid VAT is subject to refund (Article 78 of the Tax Code of the Russian Federation) at a rate of 18%.

Other tax agents (clause 4, clause 5, clause 5.1, clause 8 of Article 161 of the Tax Code of the Russian Federation) - buyers of animal skins, scrap metal, second-aluminum, etc. - must follow the general rules for calculating VAT, determining the tax base and the advance payment , and on shipment.

What are other news

changed the list of goods taxed at a rate of 10%;
the procedure for submitting documents to confirm the export of goods has been changed;
a new procedure for taxing advances upon transfer of property rights has been introduced;
there are new liberations;
A special procedure for taxation of waste paper has been adopted.

The seminar will tell you how to work with these changes.

How to calculate VAT on electronic services provided by foreign companies

From 01.01.2019, when foreign companies provide electronic services listed in clause 1 of Art. 174.2 of the Tax Code of the Russian Federation, on the territory of the Russian Federation, they are obliged to independently calculate and pay VAT. And it doesn’t matter who the buyer of such services is - an individual entrepreneur, a citizen or an organization. The moment of determining the tax base is the last day of the tax period in which such services are paid (clause 4 of Article 174.2 of the Tax Code of the Russian Federation).

Let’s imagine that payment for these services was received by a foreign seller in 2021, then:

if services are provided in 2021, then VAT must be calculated at the calculated rate for 2021 - 15.25% (clause 5 of Article 174.2 of the Tax Code of the Russian Federation);
if services are provided in 2021, then VAT will be calculated at the estimated rate of 2021 - 16.67%.

If payment for the future supply of services is received by a foreign supplier in 2021, then the VAT will be paid not by the foreign company, but by the Russian buyer himself (organization or individual entrepreneur) as a tax agent (clause 2 of Article 174.2 of the Tax Code of the Russian Federation). However, if the buyer is an individual, then the foreign company itself must pay VAT by registering for tax purposes in the Russian Federation.

Reducing losses during the transition period: practical advice

The transition to an increased VAT rate is associated not only with complex issues in tax accounting, but also with controversial situations and possible losses. Here are some recommendations to help your company survive this difficult period:

Conduct an audit of your suppliers. First of all, those who work for OSNO. Calculate prices at new rates, plan future payments. Analyze whether the company has enough working capital, including to pay taxes at the new rate. In case of a lack of funds, the solution to the problem may be: attracting borrowed funds;
agreement with suppliers on deferred payment;
attracting simplified suppliers.

Strengthen control over document flow:

Assign employees responsible for receiving and checking documents.

Set clear deadlines for receiving documents for all employees of the organization.

Deprive employees who do not fulfill their duties. This is not a pleasant measure, but the situation with the transition is complex, and tax risks can be large.

Specify in additional agreements to contracts with suppliers the obligation to provide invoices strictly within 5 days.

Check how the VAT clause is spelled out in contracts with suppliers and customers.

If VAT is included in the price of the goods or the VAT clause is not specified in the contract, the seller will pay for the increase in rate at his own expense. To avoid losses, we recommend that such sellers sign an additional agreement with buyers, according to which the price excluding VAT will remain the same and will not include VAT.
Find out in more detail how the increase in the VAT rate of 20% in 2021 will affect the contract amount.

Protect yourself by drawing up additional agreements with simplified suppliers: after all, they may lose the right to a special regime, and therefore change prices. The phrase enshrined in the contract “The price of the product includes all taxes and fees” will protect you from risks associated with price increases in the future.
If possible, speed up January shipments for which an advance has already been received: this way you will pay less VAT. Or another option - think in advance about the size of the advance, which will cover the increase in the VAT rate in 2021.
Try to negotiate with suppliers to postpone prepayments to January: this way you can deduct a larger amount of tax.

This option will not be profitable if you have a high VAT payable for the fourth quarter of 2021.

The transition to a new VAT rate will require attention, effort and responsibility not only from accountants, but from almost all employees of the organization. We will keep you updated on new developments related to the transition to a 20% VAT rate, explain what is not clear, and answer your questions.

Dear Colleagues!
BukhExpert8 will soon hold a series of seminars as part of the “Hard transition to 20% VAT” - with expert advice, analysis of practical situations, and answers to the most tricky questions.
If you want to understand in detail all the nuances of legislation and practical changes in 1C related to 20% VAT, we invite you and your company to take part in our online consulting seminars, which will be held:
[11/30/2018 broadcast] VAT 20%: hard transition to a rate of 20% (detailed legislative analysis)
[12/21/2018 broadcast] Transition to 20% VAT. Workshop in 1C - Part 1
[02/15/2019 broadcast] Transition to 20% VAT. Workshop in 1C - Part 2
[04/02/2019 broadcast] How to prepare an ideal response to VAT requirements from the Federal Tax Service
You will be able to take part in live broadcasts or watch the full recording of the seminar the next day.
Submit an application on behalf of a legal entity or individual. persons to participate →

Continued in the publication:
Increase in the VAT rate and its impact on the contract amount
If you are a subscriber to the BukhExpert8: Rubricator 1C Accounting system, then read additional material about the transition to the new VAT rate in 2021:
VAT accounting policy
Responsibilities of a tax agent for VAT
What's new in the VAT return
VAT on travel documents: 20% rate allowed already in 2021
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What are you risking if you don’t amend the contracts?

If you do not redo the contracts and demand additional payment from the buyer in 2021 and subsequent years, he may not agree. It is unknown whether it will be possible to recover the missing money through the courts. There is no judicial practice yet on the price of goods in connection with an increase in VAT, and in controversial situations, judges can shift the risks to the supplier - there are such precedents.

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