Organizations that are located and operate on the territory of the Russian Federation are required to contribute tax fees to the state budget in many areas. One of the main fees in 2018 is corporate income tax. For organizations, it plays the main role; however, in some specialized taxation regimes it is not deducted to the treasury, since they require simplified accounting.
Like any other tax-related collection, deductions from profits are regulated through the following documents:
- Tax Code of the Russian Federation;
- legislative acts issued on the territory of specific subjects of our country.
In addition to the above-mentioned sets of rules and regulations in the field of tax legal relations, government agencies periodically issue various clarifications. Their goal is not additional regulation or the establishment of new norms beyond existing ones. These papers are designed to make the working life of accountants and lawyers working in paying companies easier.
Corporate income tax 2018
Determination of net profit
How to calculate net profit?
We should start with the basics, and one of the most important economic indicators of the success of an enterprise is net profit - the funds remaining at the company's disposal after paying staff and paying all fees, taxes and bank and other deductions.
From these funds reserve funds and other savings are formed, and net profit is also used for the expansion and development of the enterprise.
Net profit and economic profit should not be confused. Their differences will be explained below.
Definition
Net profit (loss) 2400 is the net profit (loss) of the organization, i.e. retained earnings (uncovered loss) of the reporting period
Net profit (loss) is the result of the organization’s activities as a whole, after taxation and various adjustments.
If the indicator is positive, then the net financial result is net profit; if negative, then the net loss is net loss.
Net profit (loss) of the reporting period is one of the absolute economic indicators of the enterprise’s activity, used in the service to characterize the scale of the enterprise’s activities and the achieved work results.
Profit classification
The concept of profit is very diverse and it is classified according to the following criteria:
- According to the sources of formation, there is profit from the sale of its products, from the sale of means of production and other fixed assets and from other activities.
- By profit-forming elements - this sign means which items of expenses and income are taken into account in the calculation.
- Based on the nature of taxation, a distinction is made between profits on which tax is taken and those that are not taxed.
- On the basis of time, profits are distinguished for the current period, for the previous time and its planned level.
- On the basis of inflation, a distinction is made between nominal and real profits. The latter is an adjustment of the nominal value to take into account inflation for the reporting period.
Above are only the main classification criteria. If desired, this list can be significantly expanded, but as a basis it is quite sufficient.
Let's sum it up
The corporate income tax in the current year 2021 has not undergone any significant changes. To be able to determine its value, you do not need to have any specific knowledge; it is enough to remember the following formulas:
- formula for finding sales profit;
- formula for determining the amount of non-operating profit;
- formula for finding the tax base;
- the formula used to determine the amount of tax collection.
All of the above formulas are very simple, and remembering them will not be difficult. Pay attention to the calculations and successfully apply the acquired knowledge in practice. Good luck!
Revenue for a certain period
The main indicator of net profit is revenue for a certain period. It consists of the money that your company receives for the sale of goods or services, investment and financial activities.
To analyze this indicator, you should choose the right period - if it comes to production, especially mass production, then it is reasonable to analyze revenue for a whole year or quarter.
As for more “dynamic” areas of business, such as sales or the provision of services, it makes sense to pay attention to revenue for the week, month or certain seasons when a particular product or service is in high demand.
How can you influence your revenue? If demand exceeds supply, revenue increases by increasing production. In the opposite situation, you need to create advantages for your products and services over competitors.
If your company is engaged in retail trade, then in order to increase revenue it is necessary to increase the attractiveness for consumers not only of the goods themselves, but also of the store in which they are sold.
Product cost
Cost refers to the cost of resources, human labor and equipment spent on the production of a particular product or service.
It also includes the costs of storing manufactured goods and transporting them.
Reducing costs is one of the main ways to increase profits.
But in the pursuit of excess profits by reducing costs, one should be careful and ensure that the quality of what is produced remains at the same level; low-quality products are less competitive.
Examples of calculations
Example 1
Initial data:
- OOO;
- OCH 20%;
- employees – 1, salary – 40 thousand rubles. before taxes and contributions for the 1st quarter;
- revenue for the first quarter 2015 – 2,000 thousand rubles. (including VAT 360 thousand rubles);
- costs for the purchase of goods for the 1st quarter. 2015 – 1,200 thousand rubles (including VAT 216 thousand rubles);
- costs of delivery and preparation for sale for the first quarter. 2015 – 150 thousand rubles. (including VAT 27 thousand rubles).
VAT payable – 117 thousand rubles. (216 and 27 – to be reimbursed from the budget).
Personal income tax and contributions = 5.2 (13%) + 8.8 (PFR) + 2.04 (FFOMS) + 1.16 (FSS) = 17.2 thousand rubles.
Profit before tax (553 thousand rubles) = 1,640 thousand rubles. (revenue excluding VAT) – 1,107 thousand rubles. (purchase costs excluding VAT + delivery and preparation costs excluding VAT).
Pch = 553 – 17.2– 20% = 428.64 thousand rubles.
Example 2
Initial data:
- IP;
- simplified tax system 15%;
- no employees;
- revenue for 2014 – 2,300 thousand rubles;
- costs of purchasing goods – 1,500 thousand rubles;
- costs for delivery and preparation for sale - 300 thousand rubles.
Since the taxation system is simplified, VAT is not taken into account in the calculations.
Amount of contributions = 20727.53 rubles. (for an amount up to 300 thousand rubles) + 20,000 rubles. = 40,727.53 rub.
Pch = 2,300 – 1,500 – 300 – 40.72753 – 15% (STS) = 390.37 thousand rubles.
Profit calculation formulas
Now let's look at the types of profits that can be used in the operation of an enterprise and the formulas used to calculate them.
Abbreviations for economic indicators used in the formulas are given in parentheses.
Gross profit (GP) is the difference between revenue (B) and cost (C) of goods sold. It shows how much revenue from sales exceeds the costs of its creation and implementation. Calculated using the following formula:
VP=V-S
Operating profit (OP) is the money received by deducting from the gross profit management (U), commercial (C) and other (P) expenses that are not directly directed to the manufacture of goods (together they are called operating expenses).
OP=VP-U-K-P
Balance sheet profit (BP) is profit in which the calculation takes into account not only income from the main activities of the enterprise, but also income (or losses) from other activities of the company. The latter include the sale of fixed assets of the enterprise, investments and other financial transactions. Net profit has the following formula for calculating the balance sheet:
BP=PRP+PPR+PVO,
where PRP, PPR and PVO are profits from sales of products, sales of fixed assets and operations not related to sales, respectively.
Profit from sales (PoP) is the difference between gross profit and selling costs and administrative expenses (U).
PoP=VP-U
Taxable profit (TP) is the profit on which tax is charged. It is calculated as the difference between gross profit and income that is not taxed (NON), as well as the amounts of tax benefits (NL), if any.
NP=VP-NON-NL
Marginal profit (MP) is the difference between sales revenue and variable expenses (PR):
MP=V-PR
Variable costs are costs whose volume is related to the quantity of products produced.
Retained earnings (RE) is the amount of cash that remains after taxes and is not distributed to shareholders as dividends. It is used to increase fixed assets and develop the enterprise. It is calculated as the difference between net profit (NP) and the amount of dividends paid (D):
NP=CP-D
Estimated profit is the amount of money included in the construction estimate and intended for the development and modernization of the production of a construction organization and additional stimulation of its workers. When calculating it, one should be guided by the guidelines for determining the amount of estimated profit in construction (MDS 81-25.2001).
Economic profit (EP) is the funds remaining with the company after deducting all costs, including opportunity costs, from total income. Total income (CI) includes revenue from sales, income from the sale of fixed assets, financial and investment transactions. As for expenses, in addition to explicit costs (EC) for wages and the purchase of materials, there are opportunity costs (or implicit costs, abbreviated as NI), which express the possible lost profit from choosing one or another option for capital distribution.
EP = SD – YAI – NI.
An indicator such as the break-even point shows how much goods need to be produced and sold to cover all waste and costs. Break-even point: calculation formula as an example of business stability.
Examples of cost calculations can be found here.
And in this topic https://businessmonster.ru/buhuchet/raschetyi/formula-koeffitsienta-tekushhey-likvidnosti.html we will get acquainted with the concept of the current liquidity ratio and learn how to calculate it correctly.
Procedure for calculating income tax in 2018
By nature, income tax is a direct tax. Its size is directly dependent on what achievements the company has achieved during the current tax reporting period.
Tax is calculated on the so-called net profit of the organization, which it receives at the end of the working period coinciding with the tax period.
Tax payers
The calculation of indicators in 2021 should have been carried out by certain entities that are also tax payers. These include persons from the following list.
Domestic companies, organized by our citizens in their native land. The obligation to pay income tax lies with each of them. However, as we have already mentioned, some firms are exempt from paying this particular tax due to the transition to a specialized tax regime. The modes can be the following:
Table 1. Tax regimes
| Tax regime | Meaning |
| A single tax on imputed income | When the amount of income is determined tentatively by the officials responsible for the procedure, and the funds are withdrawn regardless of how much money was actually received. |
| Simplified taxation system | It involves making a single payment to the state treasury, instead of transferring funds across several different collections. |
| Unified agricultural tax | A tax levy that can only be used by companies operating in the field of agriculture. |
| Patent system for transferring funds to the state treasury | A specialized regime suitable only for companies with fewer than 15 employees. |
In our special article we will cover the topic of income tax for LLCs, we will tell you who claims special conditions for paying the fee, how to calculate and pay it.
In addition, there are two more categories of corporate income tax beneficiaries. These include the following types of companies:
- entities whose field of activity is gambling business;
- companies participating in the domestic innovation project “Skolkovo Center”.
These organizations have a special status. In the gambling business, tax is levied on equipment, not profit, and innovative projects work for the benefit of the homeland, carrying out its scientific development, therefore, their activities are also not subject to income tax.
foreign counterparty companies , have obligations to transfer funds in favor of the state budget . The sources of income for such organizations are also located within the borders of our country.
Objects subject to taxation
Now that we have figured out who the payers of the tax levy we are considering are, we can begin to determine the objects subject to taxation.
The word “object” means the tax financial base, which serves as the basis for all necessary calculations of the amount of tax collection. It can be the following names.
- Cash received by the company as a result of the working period, that is, the revenue it earned, which is reduced by the amount of production expenses incurred by the company. This formulation of the taxable base is valid only for those firms that: are domestic;
- are not included in the category of consolidated payers of tax contributions to the state treasury.
We would like to draw your attention to one very important fact. It happens that a company does not receive revenue during a certain period of time, or simply does not have a profit. This circumstance may be associated with an economic crisis, problems at the enterprise, and many other random factors. In any case, if there is no profit, then there is no need to pay tax. This fact is valid due to the fact that there is no taxable financial base.
If there is nothing to tax, then there is nothing to pay
What are income and expenses
To understand well what net profit is, you need to understand the meaning of the two units that form it:
- company income;
- expenses incurred by the company.
Income is represented by cash receipts. They appear in the company for a reason, but because of its core activities. As a rule, this activity is of an implementation nature. In other words, the company is selling something. At the same time, any product can become an object of trade: food, clothing, cars, etc. In addition, the sales process can be aimed not only at the sale of specific items (goods), but also at:
- provision of any specialized services;
- carrying out work in various directions.
Let's give an example. Three organizations are located next to each other on the same street.
The first is a shop that sells confectionery products. Confectionery products are food products, and therefore traditional goods.
The second establishment is a beauty salon. It offers cosmetology services such as:
- massage;
- wraps;
- injection of subcutaneous fillers;
- other services.
The third establishment is the office of a construction company. The product of this enterprise is construction work, which, just like ordinary things, is sold to those who want to buy them.
In addition to the sales process, funds designated as income can also come to the company non-sales. For example, a company has some property that it transfers for temporary use to any person. In fact, such a transfer implies the execution of a lease agreement. Funds received from the tenant are also classified by law as income, which means that rental payments will be included in the profit-generating amount.
Income calculation is also carried out by companies subject to a simplified taxation regime, the organizational form of which is a legal entity.
When calculating corporate income tax, data on received income must be taken into account without:
- adding the amount of value added tax;
- accounting for excise taxes.
This nuance must be known to specialists working in the accounting department of your company. Otherwise, if you make incorrect calculations and determine a false value, you can end up in an unpleasant situation, which will ultimately result in two unpleasant, interrelated consequences:
- you provide false information to the tax service;
- the company you work for will receive an unpleasant fine for providing incorrect information.
The determination and calculation of taxes received are made on the basis of primary documentation. Other papers containing the necessary reporting are also used.
Those documents that record all financial receipts to the company’s account are suitable.
Now let's talk about costs. They mean the costs of a company, or its structural unit, which:
- have documentary evidence;
- are reasonable.
If everything is clear with the first point, then what is implied in the second?
Only those expenses of an organization that are aimed at its benefit, that is, used rationally, can be justified. For example, you didn’t have an automatic buttercream beater in your pastry shop. You purchased it and accelerated the production process, which influenced, although not obviously, an increase in the number of orders and goods sold. This improvement is justified, as it is aimed at technological improvement of the production process.
If you decide to take money from the company’s budget to pay the general director for a trip to the Maldives, the purpose of which is recreation, and not business meetings and concluding contracts, then such expenses will not be included in the list of justified expenses, which means that the taxable fee will be reduced by their amount. the base will not work.
The organization's expenses, as well as its income, are divided into two main groups.
Table 2. Main groups of expenses
| Group | Components |
| Costs aimed at improving the production and/or sales process |
|
| Costs not associated with the implementation process |
|
Direct costs are calculated at the end of each thirty-day calendar period. They are divided into the remains of production not completed, as well as the cost of products produced or services provided to the population. In other words, direct costs are determined in order to minimize the base subject to taxation that a particular company has in the process of carrying out sales operations with goods in the price of which these costs are taken into account.
The company making tax payments is obliged to independently prepare and determine a list of expenses that are of a direct nature, and then report on them by drawing up the necessary documents.
In addition, there is also a list of closed-type expenses. Such costs are not taken into account when determining the tax base, therefore, being able to determine them is also very important. The list you are looking for includes the following items:
- loan payments;
- insurance premiums, the payment of which was purely voluntary;
- cash receipts that are part of the profits of members of a joint-stock company or other type of organization, distributed among units of the composition according to the shares they own;
- funds contributed due to participation in the authorized capital of a company;
- payments to the treasury of funds received due to harmful emissions into the environment that exceeded the norm determined by law;
- assistance of a material nature that is provided to employees of the organization.
Formula for calculating income tax
We present the definition of the income tax formula to our readers in this section. Those of them who carefully read the above text should have remembered at least one of its components.
That's right, the first element of the formula for calculating the amount of tax collection on corporate profits is the financial base. In other words, it is profit, the difference between the income received and the company’s expenses incurred.
To correctly calculate the indicator we are interested in, however, we need to have information regarding not only the size of the tax base, but also the current rate.
Note! For the tax we are considering, there is a set rate, which also remains relevant in 2021. It is 20% of the profit.
Income tax rate - 20%
In the past 2021, the 20% collected from the taxpayer was divided into two parts. One of them was supposed to be sent to the federal budget, the other - to the treasury of the region in whose territory the payer made the tax payment.
So, previously the ratio was as follows:
- the federal budget received 2% of the full amount (20%);
- the regional budget was replenished with the remaining 18%.
Today the ratio has changed slightly:
- the state budget is now replenished by 3% of the amount collected from the tax payer;
- the budget of the constituent entities of the Russian Federation receives the remaining 17%.
According to the government decree, regional authorities have the right to independently differentiate tax rates, depending on each specific case. This means that the profit rate can be lowered, however, only to the detriment of the regional budget. In any case, the federal treasury must receive the interest due to it.
So, based on the information received, we will determine the profit formula used to carry out accounting expenses in the organization:
Income tax fee = base subject to taxation * current rate.
If the profit coming to the company will be taxed at different rates, then the base will be calculated separately for each tariff.
For calculation, the tax base is taken as an incremental value; the reporting period is a calendar year, that is, it lasts from the first day of January of the current year to the thirty-first day of December of the same year.
Now let's look at the formulas that help us determine the tax base.
Formula No. 1. The formula helps calculate the profit received due to the implementation of the sales process. It looks like this:
Realization profit = the amount of income received from the sale of products or services - the total amount of costs of a production nature
As you can see, everything is quite simple. Money received due to sales and/or production is reduced by the funds that were spent on the same production. The epithet “net” is often added to profit. This is largely due to the fact that income is, as it were, “cleared” of costs and presented as revenue.
Formula No. 2. For transactions not related to the implementation process, the calculation formula will look similar, only the areas of income receipt and expenses will change. So, let's look:
Profit on transactions of a non-operating nature = the total amount of income received from the non-operating category - the total amount of costs also of a non-operating nature
As you can see, in both formulas we presented, expenses were subtracted from income received, it’s just that the areas in which this cash flow occurred differed. One is interconnected with the process of selling a product and its production (or purchasing, for example), the other has nothing to do with the product.
Formula No. 3. The last formula combines the quantities presented earlier by the formulas. With its help, we find the general value of the tax base, which is then used in the formula to calculate the amount of tax collection on the organization's profit.
Taxable financial base = operating profit + non-operating profit – losses subject to transfer to a specific time period
As you can see, companies have the opportunity to carry forward losses they receive. If they do exist, they must also be taken into account in the formula we present, otherwise the determination of the amount of tax will again be made incorrectly.
Please note a very important fact: when, when determining the amount of expenses, they exceed the amount of income received by the company based on the results of its activities for a specific reporting period, this one-year period is defined as unprofitable. What does this definition mean? Everything is very simple. If there is no income, then there is no income tax payment. Unfortunately, this is the reality of business.
A business can become unprofitable at any time
Let's give an example. Imagine that you are the owner of a small pastry shop. Let's say that in 2021, things weren't going well for you because the price of raw materials from your favorite supplier rose sharply, and you were forced to buy them at a higher cost. The costs you spent on this purchase, as well as other production areas, amounted to 300 thousand Russian rubles. At the same time, in order not to scare away customers, you had to sell confectionery products at the old price. As a result, the company's revenue amounted to only 275 thousand Russian rubles. Let's determine whether there was a profit: 275,000-300,000 = - 25 thousand rubles - this is the loss of your company. This means that there is no tax base. There is no profit, and there is also nothing to calculate tax collection from.
To determine the tax base, it is necessary to be guided by certain points of the main set of information on tax legal relations in the Russian Federation - the Tax Code. In addition, it is important to take into account the peculiarities of the activities carried out by tax payers.
While the tax period, that is, the calendar year, lasts, companies are obliged to:
- transfer advance payments to the state budget;
- submit declaration forms filled out with the necessary information to the department of the Federal Tax Service for verification.
Algorithm and formulas for calculating net profit
First, decide for what reporting period the calculation will be made: year, quarter or month.
A shorter period allows you to assess the current position of the enterprise and the results of its recent work; a longer reporting period allows you to consider the development trends of the company and provide the basis for planning its future activities.
Now we determine sales revenue, production costs, operating expenses and the amount of taxes and other fees. The formula for calculating net profit ultimately looks like this:
PE=V-S-OR-N
If your company receives income from investments, sales of assets and other non-production activities, income and expenses from these operations should be included in the calculation of net income.
Examples of determining the amount of income tax
So that after reading the article you can independently make simple calculations of corporate income tax, we will give you some interesting examples. Use them later as a sample, simply substituting the information you have into the presented calculations.
The higher the profit, the higher the tax
Example No. 1
So let's say you are a manager. In 2021, your organization sold products in an amount equal to one and a half million units of national currency.
The company's general expenses associated with the implementation process, in turn, amounted to 950 thousand Russian rubles.
The amount of income classified as non-operating was only 15 thousand Russian rubles for the taxation period under review, while the costs incurred in the same non-operating area amounted to as much as 35 thousand units of Russian currency.
It's time to use the formulas presented above to calculate the tax base.
So, the financial tax base is equal to = 1,500,000 + 15,000 - 950,000 - 35,000 = 530 thousand Russian rubles. As you can see, we performed the calculations in exactly the same way as described earlier, however, we rearranged the elements of the formula. We could write it like this: (1,500,000 - 950,000) + (15,000-35,000). However, as we remember from elementary school, in the case of addition and subtraction, the final result will not suffer any changes from rearranging the elements of the formula from place to place.
Now let's learn how to determine the amount of tax collection on company profits. Having received the taxable base, we can begin to determine it. So:
Income tax will be equal to = 530,000* 20% = 106 thousand Russian rubles.
Example No. 2
We will give a second example in order to hone our new skill in determining the amount of income tax. Of course, if you do not have an accounting education, you will not be able to officially apply this knowledge in practice. However, if you are the head of a company and want to test the level of knowledge of a specialist in your accounting department, try solving the examples yourself and you will be able to check their work, while understanding what is at stake.
Imagine that you are in charge. During the current year 2021, your organization received a solid income from selling its products, the value of which amounted to 3 million units of Russian currency.
At the same time, the general expenses of your enterprise were also significant and amounted to 1 million 200 thousand Russian rubles.
Now let's turn to the non-realization area of the company's activities. From this perspective, 2021 also turned out to be successful, since non-operating income came in the amount of 150 thousand rubles, and expenses in the same category amounted to only 50 thousand.
Let's use the formula we have and create an equation: 3,000,000 + 150,000 - 10 = 1 million 900 thousand.
Now let’s determine the amount of tax collection: 1,900,000*20%=380,000 thousand rubles - this is how much the income tax will be.
The procedure for calculating the rate of return
The rate of profit (Np) is the ratio of profit (P) for a certain period to the advanced funds (AS).
Advanced funds consist of the costs of production of goods and wages for the reporting period.
The result of the ratio should be multiplied by 100%:
Np=(P/AS)x100%
Depending on the field of activity of the enterprise, the profit rate can range from 15 to 50%. With such values, the company has opportunities for growth, and its activities pay for themselves. If the rate of return is less than 15%, the enterprise has problems and its future is unstable, and if it is more than 100%, then you receive excess profits.
When calculating this indicator, it is necessary to carefully select the reporting period - in a number of industries, advanced funds have a turnover of more than one year, therefore, calculating the rate of profit in a shorter period of time can lead to false results.
Analysis of the results obtained
There are three main ways to analyze the net profit received, on the basis of which you can plan changes in the operation of the enterprise in the future:
- Vertical and horizontal analysis of indicators - tracking changes in indicators and items of financial statements over a certain time.
- Trend – comparison of the dynamics of changes in profit and other indicators in the reporting period with the previous or base one.
- Factor analysis is the search and consideration of external and internal factors that could affect the amount of profit received. Factors must be presented in the form of coefficients. Using all the above information, you will be able to evaluate the performance of your company and plan its further growth.
Using all the above information, you will be able to evaluate the performance of your company and plan its further growth.
The productivity indicator of the production activity of the working personnel is extremely important for the successful functioning of the enterprise. This coefficient can be calculated mathematically. Labor productivity: the calculation formula and examples of calculations are given in this topic.
What is labor intensity and how to calculate it, see this page.
