Object of taxation for corporate income tax in 2021

Concept and elements of corporate income tax

Corporate income tax occupies an important place in the country's tax system. Revenues from income taxes form the revenue side of the federal and regional budgets of Russia: in 2017–2021 it is 3% and 17%, respectively (based on a tax rate of 20%). This tax is no less important for taxpayers.

Taxpayers for income tax are business entities, both Russian and foreign, who, as a result of their economic activities, received profit from sources in Russia. Individuals pay personal income tax (NDFL).

The following are exempt from income tax:

Organizations using special tax regimes;
Gambling tax payer organizations;
Participants of the Skolkovo project (Article 246.1 of the Tax Code of the Russian Federation);
Organizations serving and supplying goods for the FIFA Cup.

Elements of income tax
Object of taxation	Profit	Article 247 of the Tax Code of the Russian Federation
The tax base	Monetary expression of profit	Article 274 of the Tax Code of the Russian Federation
taxable period	Calendar year	Article 285 of the Tax Code of the Russian Federation
reporting period	Quarter or month	Article 285 Tax Code of the Russian Federation
tax rate	Main: 20% Reduced: 0 – 15% Increased: 30%	Article 284 of the Tax Code of the Russian Federation
calculation and payment procedure	Cumulative total from the beginning of the period. Advance payments at the end of the reporting period	Article 286 of the Tax Code of the Russian Federation

Object of taxation for corporate income tax

The object of taxation is perhaps the most important element of income tax. After all, if you make a mistake when defining an object, the tax base and, accordingly, the amount of income tax paid to the budget will be incorrectly calculated.

The object of tax is a certain circumstance, upon the occurrence of which an obligation to pay taxes or fees arises (Clause 1, Article 38 of the Tax Code of the Russian Federation). The legislation defines its own object of taxation for each tax. In particular, for corporate income tax, the object of taxation is profit. In other words, at the time of receipt of profit, the taxpayer has an obligation to pay income tax (

List of tax-free income

For ease of understanding, the following is a list of categories of income that are not taxed:

objects of property or rights to property obtained with the help of a deposit or pledge;
contribution of the authorized capital;
funds or property that were received through a loan or credit agreement. Income also does not include saved interest on an interest-free loan or a loan with a much lower refinancing percentage than the Bank of Russia established;
investment of capital in the form of a property received for free use;
other types of income as specified in Article 251. NK.

There is also a category of preferential income, but it is closed. This group should not be interpreted broadly, when the already known rules for determining income are understood a little wider than their verbal formulation.

The procedure for calculating the taxable object for income tax

In practice, there are many types of profit indicators. We are interested in profit, which is reflected in the income statement. The structure of the financial results statement makes it easy to trace the order in which the taxable profit indicator is formed.

The procedure for calculating the object of taxation - taxable profit - differs for different categories of income tax payers.

Taxpayers may form a consolidated group. Then each participant in the consolidated group of taxpayers calculates the amount of taxable profit within their organization. And the responsible member of this group consolidates the profits of all participants, and from this amount calculates and pays income tax to the budget.

Income and expenses of an organization that are not taken into account when determining the object of taxation for income tax

Some types of income and expenses of an organization are not taken into account when determining taxable profit:

Not taken into account when calculating taxable profit
income	expenses
1	Prepayment	Dividends
2	Cost of collateral or deposit	Penalties, fines to the budget
3	Contributions (contributions) to the authorized (share) capital (fund)	Contributions to the authorized capital of the partnership
4	Amounts of VAT subject to deduction from the organization receiving the contribution (contribution) to the authorized capital	Taxes, as well as payments for negative impacts on the environment in excess of established standards
5	Property contribution of organizations created by the Russian Federation	Acquisition, creation, retrofitting, reconstruction of fixed assets
6	Property, property rights taken to increase the value of net assets	Contributions for voluntary insurance (except for contributions attributable to labor costs, Article 255 of the Tax Code of the Russian Federation)
7	Return or redistribution of the contribution of an organization participant upon leaving the organization, its liquidation, or upon reduction of the authorized capital	Contributions to non-state pension provision (except for contributions attributable to labor costs, Article 255 of the Tax Code of the Russian Federation)
8	Free assistance (assistance) to the Russian Federation	Property transferred under a commission agreement or agency agreement
9	Funds received under a credit or loan agreement, as well as in repayment of these agreements	Contributions to the reserve for depreciation of securities (except for organizations-professional participants in the securities market)
10	Property received free of charge, if the transferring party (individual or legal entity) owns a share of at least 50% in the authorized capital of the receiving organization	Property (including debt securities) transferred under credit or loan agreements, as well as in repayment of such agreements
11	Property received free of charge, if the receiving party owns a share in the authorized capital of the transferring organization of at least 50%	Losses for service production facilities
12	Guarantee contributions to reserve funds for transactions on the securities market or clearing activities	Prepayment
13	Targeted funding used for its intended purpose	Voluntary membership fees to public organizations
14	The cost of shares received by the shareholder organization during the redistribution of shares	Property transferred free of charge, as well as expenses for such transfer (there are exceptions)
15	Positive difference from the revaluation of precious metals due to changes in the price list	Special-purpose financing
16	Positive value from the revaluation of securities, as well as the amount of restored reserves for the impairment of securities	Negative difference when revaluing precious stones
17	Accounts payable written off in accordance with the law to the budget and extra-budgetary funds	Amounts of taxes presented by the taxpayer to the buyer
18	The value of property, rights having a monetary value, and (or) obligations received (transferred) by way of succession during the reorganization of legal entities that were acquired (created) by the reorganized organizations before the date of completion of the reorganization	Trading Fees
19	Income received by a joint-stock company, 100 percent of whose shares belong to the Russian Federation, from the sale of shares of other organizations, subject to the transfer of such income in full to the federal budget	Remuneration to employees in excess of that provided for in the employment contract, as well as financial assistance, additional leave, pension supplement, travel allowance
20	Free transfer of copyright to the organization executing a government contract for an invention created during the implementation of this contract	Property transferred as a deposit or collateral
21	Dividends received by a Russian company from a foreign controlled organization	Entertainment expenses
22	Providing sureties (guarantees) if all parties to such a transaction are Russian organizations that are not banks	Advertising expenses
23	Payments to the victim under compulsory motor liability insurance	Negative difference from revaluation of securities
24	Property received under a concession agreement	Payments to the victim under compulsory motor liability insurance
25	Some others	Some others

Central moments

The choice of taxation object for different areas of business is clearly regulated by current legislation. In case of non-payment of taxes or payment not in accordance with established rules, the company may be subject to all kinds of fines and penalties.

Database overview

In accordance with current legislation, a company's profits and expenses must be calculated separately to determine the tax base. The first object is the profit received through the main activities of the organization, that is, received in the process of conducting financial transactions with consumers, as well as all sales and non-operating income that meets the standards prescribed in Articles 249 and 250 of the Tax Code.

In addition, there is also a closed list, which is not taken into account in the process of determining the tax base. This category includes the accrual of dividends, as well as the repayment of loans, fines and penalties that are accrued to the budget. A detailed list of costs that cannot in any way affect the amount of income tax is specified in the provisions of Article 270 of the Tax Code.

In the process of checking the tax base as the main object of taxation for income tax, employees of control authorities try to indicate as much as possible any profit that was received by the organization, and at the same time, they dispute in every possible way any expenses.

Taking this into account, any entrepreneur must always confirm all existing expenses with primary documentation, that is, provide all kinds of acts and invoices received from their suppliers. In addition, it is also necessary to confirm with documents the fact that all these costs are economically justified, that is, they were allocated for the purpose of further extracting a certain profit by the company.

If, for example, payment for services received from a third party is being considered, then such expenses should be carried out within the framework of the execution of other agreements with the customer or in order to support the work of the company as a whole. Thus, if employees of control bodies have any questions, an organization that includes certain costs in its tax base will have to confirm with documents that they are justified from an economic point of view.

The latter provides for indicating as the date of recognition of profits and expenses the date when the corresponding primary documentation was signed with suppliers or consumers. In other words, regardless of whether payment has been transferred, the transaction is already recognized as completed upon the provision of the service.

Depreciation groups

Depreciable property refers to those objects that are the property of the taxpayer, are used by him for the purpose of making a profit, and the cost of which is compensated by depreciation. The useful life of these objects should be more than 12 months, and their initial cost should not be less than 20,000 rubles.

Group number	Content
1	Any short-lived property that has a useful life ranging from one to two years.
2	Property that has a useful life ranging from two to three years.
3	Property that has a useful life ranging from three to five years.
4	Property that has a useful life ranging from five to seven years.
5	Property that has a useful life ranging from seven to ten years.
6	Property that has a useful life ranging from ten to fifteen years.
7	Property that has a useful life ranging from fifteen to twenty years.
8	Property that has a useful life ranging from twenty to twenty-five years.
9	Property that has a useful life ranging from twenty-five to thirty years.
10	Property that has a useful life of more than thirty years.

This classification is prescribed in the standards approved by Government Decree No. 1, issued on January 1, 2002. All taxpayers are given the opportunity to choose one of several methods by which depreciation should be calculated: linear and non-linear.

The non-linear accrual method involves determining the total balance on the first day of each individual tax period. In this case, the total balance of each individual group is constantly reduced by the depreciation amounts that are accrued for this group.