OSNO companies pay tax on their profits in installments throughout the year. When the year ends, you need to calculate the annual tax amount and pay the difference. Advance payments for income tax are calculated and transferred in several ways. Let's figure out what this depends on and whether the organization has a choice. We will also look at possible calculation options using examples.
Features of income tax
All organizations pay income tax using the basic taxation system. The tax base consists of the difference between income and expenses from sales, as well as from non-sales transactions. At the same time, there is a list of non-taxable income - they are collected in Article 251 of the Tax Code. There are also types of costs that are not included in the tax base - they can be found in Article 270 of the Tax Code of the Russian Federation. Both lists are comprehensive. In other words, if certain types of income or expenses are not directly indicated in them, they cannot be recognized as such when calculating tax.
Organizations pay tax throughout the year in installments called advance payments. When the year is over, the final tax amount is calculated, taking into account what has already been paid. Advances are transferred to the budget either once a quarter or once a month. It depends on the company's income and which method it has chosen.
Tax is generally paid at a rate of 20%. The amount is divided between budgets of different levels. Advance payments for income tax in 2021 are distributed as follows: 3% goes to the federal budget, 17% to the regional budget. This procedure has been applied since 2021 and will remain in place until 2024 inclusive. Further, the distribution will be different: only 2% will go to the federal budget, 18% to the regional budget. Payers must distribute the tax themselves and indicate the relevant details in payment orders, including budget classification codes.
The rules for calculating advances are stated in Article 286 of the Tax Code of the Russian Federation. There are 3 ways in total:
- Quarterly. Advances are calculated for the first quarter, six months and 9 months. This option is suitable for several types of organizations, including:
- commercial companies that received an average of no more than 15 million rubles in income from the sale of goods and services in each of the previous 4 quarters;
- budgetary and autonomous institutions;
- foreign organizations with representative offices in the Russian Federation.
- Once a month, based on how much profit is actually earned . Advance payments are calculated monthly, the base is taken from the beginning of the year. This method is used voluntarily by those companies that do not have the right to make quarterly advance payments. To do this, you need to inform the Federal Tax Service in any form about your intention by the end of the year. The method will be available starting next year.
- Once a month with additional payment at the end of the quarter . This method is used by organizations that do not fall under the conditions from point 1 and have not chosen the method from point 2. The point is that in the current quarter you need to pay advances, focusing on the results of the previous one. And when the period ends, you need to recalculate based on how much income was actually earned.
At the end of the year, you need to calculate the remaining tax taking into account the listed advances. It is calculated using the formula: Base for the year * Rate - The amount of advances paid during the year. The tax is paid until March 28 inclusive. If it is a weekend, the deadline is moved to the next working day.
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Now let's look at the methods described above using examples.
Advance on agreements and contracts
Registration of the purchase of goods, works, services involves the conclusion of an agreement. The agreement specifies all essential terms of cooperation, including the payment procedure. It is possible to provide for an advance payment procedure. For example, when the buyer transfers part of the delivery cost in advance, before the actual shipment of goods to the warehouse or provision of services.
The amount of advance payment under contracts is determined by agreement of the parties: partners must agree in advance on the payment system and write down the agreements reached in the agreement.
More stringent frameworks are provided for state and municipal procurement. In general, the advance payment should not exceed 30% of the contract amount (clause 18 of Regulation No. 1496). But there may be exceptions. For example, when making payments using federal budget funds, the following restrictions are established:
- 30-80% - for the development of R&D for import substitution;
- 30-90% - in the presence of treasury support during settlements;
- up to 100% - for communication services, purchasing periodicals, paying for courses, professional retraining, purchasing travel tickets, insurance, etc.;
- up to 30% with the possibility of increasing to 70% - for construction and major repairs of state property in Russia, with treasury support for settlements.
To pay for services and supplies from regional or local budgets, other advance limits may be provided. For example, Moscow City Decree No. 1229 “On Advance Payments” (as amended) provides for certain restrictions on the assignment of advance payments in contracts executed at the expense of the Moscow city budget. The standard advance amount in Moscow is 20%. But there are exceptions (clause 1 of Moscow Government Decree No. 1229-PP dated December 30, 2008 (as amended on December 25, 2017)).
Example of a payment order for the supply of goods
Option 1: per quarter
Alpha LLC was created at the beginning of 2021. The new company will make advances quarterly until it exceeds the profit limit. There will be 3 payments within the year - based on the results of the first quarter, 6 and 9 months. And at the beginning of next year the company will have to calculate how much tax it needs to pay.
The advance is calculated as follows: Base for the period * 20% - The amount of the advance from the previous period of the current year. The advance payment for the quarter is paid by the 28th day of the month following its end. How to calculate advances and taxes for the company from the example is shown in Table 1. The amount to be paid is divided into parts that need to be transferred to different budgets.
Table 1. Calculation of advances for Alpha LLC for 2019
| Periods | Tax base, rubles | Calculated advance from the beginning of the year, rubles (base * 20%) | Payable at the end of the period (federal/regional part), rubles | Payment deadline |
| I quarter | 100 000 | 20 000 | 20 000 (3 000 / 17 000) | April 29 |
| half year | 500 000 | 100 000 | 80 000 (12 000 / 68 000) | July 29 |
| 9 months | 1 200 000 | 240 000 | 140 000 (21 000 / 119 000) | 28 of October |
| year | 2 500 000 | 500 000 | 260 000 (39 000 / 221 000) | March 30, 2021 |
Advances to report
Issuance of money on account is one of the types of advances used by organizations. Funds can be given out for various purposes. This could include travel expenses, purchasing materials for business needs, and settlements with suppliers. Other goals set by management may also be identified.
Accountable funds can only be issued to an employee of the company. Moreover, the manager should fix the list of employees who are accountable persons. In addition, the organization should approve limits on advances of accountable amounts, reporting deadlines and additional payment rules.
Accountable funds are issued based on the employee’s application or the manager’s order. The amount can be transferred to cards or issued in cash from the cash register.
Option 2: once a month based on actual profit
Beta LLC has been operating for several years, and its income is increasing. In 2021, the company prepared in advance for exceeding the limit and submitted a notification to the Federal Tax Service about the payment of advances on actual profits.
This method is similar to the previous one, with the only difference being that advances are calculated at the end of each month, not the quarter. The base is taken on a cumulative basis from the beginning of the year. That is, in February the tax for January is calculated, in March - for January and February, in April - for the period January-March, and so on. Payment is due by the 28th day of the month following the period.
Table 2. Calculation of advance payments for income tax of Beta LLC for 2021
| Last month of the period | Tax base, thousand rubles | Calculated advance, thousand rubles (base * 20%) | Payable at the end of the period (federal/regional part), thousand rubles | Payment deadline |
| January | 15 000 | 3 000 | 3 000 (450 / 2 550) | 28th of February |
| February | 33 000 | 6 600 | 3 600 (540 / 3 060) | March 28 |
| March | 51 000 | 10 200 | 3 600 (540 / 3 060) | April 29 |
| April | 60 000 | 12 000 | 1 800 (270 / 1 530) | May 28 |
| May | 90 000 | 18 000 | 6 000 (900 / 5 100) | June 28 |
| June | 126 000 | 25 200 | 7 200 (880 / 6 120) | July 29 |
| July | 153 000 | 30 600 | 5 400 (810 / 4 590) | August 28 |
| August | 180 000 | 36 000 | 5 400 (900 / 5 100) | September 30th |
| September | 210 000 | 42 000 | 6 000 (900 / 5 100) | 28 of October |
| October | 237 000 | 47 400 | 5 400 (810 / 4 590) | November 28 |
| november | 264 000 | 52 800 | 5 400 (810 / 4 590) | December 30th |
| December | 291 000 | 58 200 | 5 400 (810 / 4 590) | March 28, 2020 |
This method is simpler and more understandable than the next one. There is no tax overpayment. This is due to the fact that the advance is calculated based on the fact, and not on the basis of estimated income. Another advantage is that part of the actual profit received is used to pay the tax, and not the organization’s money withdrawn from circulation.
Option 3: every month with additional payment per quarter
second year on the market. In 2021, she paid advances once a quarter - the amount of income allowed it. But she now had to switch to monthly advance payments for her income taxes because she exceeded the income limit for quarterly payments in 2019. No notice was given in advance regarding the calculation of advances on profits received. Therefore, they will have to be calculated based on expected income.
During the first quarter, the same amount of advance payment must be paid as in the fourth quarter of last year. This amount is reflected in the income tax return for 9 months of the previous year (sheet 02, line 320). Even if it becomes clear that the period will be unprofitable, the advance cannot be reduced.
For the fourth quarter of 2021, Gamma LLC paid an advance on income tax in the amount of 2 million rubles. Therefore, during the first quarter of 2019, you need to pay the same amount. Monthly advance payments for income tax are made as follows:
- the amount of the quarterly payment is divided into 3 equal parts;
- payment is made no later than the 28th day of each of the three months of the quarter.
This means that in the first quarter I must transfer 666.67 thousand rubles each by January 28, February 28 and March 28. The amount must be distributed between budgets:
- 566.67 thousand rubles (17%) - to the regional;
- 100 thousand rubles (3%) - to the federal one.
The following quarterly advances are calculated as follows:
- in the second quarter the amount is equal to the advance for the first quarter;
- in the third quarter: advance for the first half of the year - advance for the first quarter;
- in the fourth quarter: advance for 9 months - advance for half a year.
When the quarter ends, the advance payment for the period and the amount of the additional payment are determined based on how much income was actually received. The additional payment is calculated according to the formula: Advance for the current period - (Advance for the previous period + Amount of monthly advances for the current quarter). For example, for 9 months the additional payment is calculated as follows: Advance for 9 months - (Advance for half a year + Monthly advance payments for the third quarter).
How Gamma LLC needs to calculate the total monthly advance payments for income tax in 2021 and the additional payment at the end of the quarter is shown in Table 3.
Table 3. Calculation of advances for income tax of Gamma LLC for 2021
| Periods | Tax base on an accrual basis, thousand rubles | Amount of the quarterly advance on an accrual basis, thousand rubles (base * 20%) | Amount of monthly advances payable during the quarter, thousand rubles | Additional payment based on the results of the quarter, thousand rubles |
| I quarter | 17 000 | 3 400 | 2,000 (according to the fourth quarter of 2021) | 3 400 — 2 000 = 1 400 |
| II quarter | 42 000 | 8 400 | 3 400 | 8 400 — (3 400 + 3 400) = 1 600 |
| III quarter | 70 000 | 14 000 | 5 000 | 14 000 — (8 400 + 5 000) = 600 |
| IV quarter | 110 000 | 22 000 | 5 600 | 22 000 — (14 000 + 5 600) = 2 400 |
Using this method may result in an overpayment of the advance payment. If the monthly amount paid plus the advance for the previous period is greater than the payment based on the results of the current period, then there is no need to pay anything extra to the budget.
Income tax reporting
The frequency of advance payments is also related to the frequency of filing income tax returns. If advance payments are calculated once a quarter or monthly with a quarterly surcharge, then the tax return is submitted 4 times a year - based on the results of the first quarter, half a year, 9 months and a year. Reports on advance payments must be submitted by the 28th day of the month following the end of the quarter, that is, at the same time as the tax payment. The annual report is due by March 28 of the following year.
When paying monthly payments based on actual profits, reports are submitted every month. The deadline for submission is the 28th of the next month. An important nuance when filling out a declaration is that you need to reflect in it the amounts that have been accrued. It does not matter whether they were paid in full or not.
So, we have considered all possible options for calculating and paying advances on income tax. If the company's income is less than the established limit, then the simplest quarterly calculation method is used. When approaching the income limit, you should submit a notification to the Federal Tax Service in advance about calculating monthly advances based on actual profit, since this method is simpler and more profitable.
Advance on wages
The transfer of earnings for the first half of the month is regulated by the Labor Code, namely Article 136. The employer undertakes to pay wages to all employees working under employment contracts at least twice a month: every 15 days.
The exact amount of salary advance has not been established. But the Ministry of Labor provided several clarifications for employers. In Letters of the Ministry of Labor dated 03/20/2019 No. 14-1/B-177, dated 09/18/2018 No. 14-1/B-765 it is determined that the amount is determined in proportion to the time worked in the first half of the month.
When calculating the salary advance, include the official salary or rate, as well as bonuses and additional payments calculated for time worked. But do not take into account bonuses and incentive payments calculated for results or based on work results.
The purpose of payment “advance on wages” in payment orders is used less and less. The Ministry of Labor recommended replacing the outdated wording with a more current one: “salary for the first half of the month.”
