The Criminal Code and the Code of Criminal Procedure change the procedure for reimbursement of expenses for lawyer’s services

Procedure for documenting services

To confirm the fact of agreement on the terms, it is necessary to conclude an agreement between the parties of a certain form. Despite the use of the concept of “services” in accounting terms, lawyers are engaged in providing assistance, which is reflected in the contract. In legal practice, 3 types of agreements are used.

The contract is considered concluded when agreement is reached between the parties on the terms of assistance. The document must be registered in a lawyer's office.

Accounting for legal expenses

Acceptance of expenses when participating in court is carried out after their documentary confirmation and actual implementation. The date of acceptance of the state duty in expenses is the day of filing the statement of claim. The document will not be accepted for processing without presentation of a payment document or confirmation of release. If the claim is abandoned after filing the application, the amount will not be returned to the plaintiff.

To accept expenses in the form of expenses, you must have a court decision and documents confirming the expenses (clause 14.2 of PBU 10/99). When compensating for expenses incurred, the date of receipt of income is considered to be the day the court recognized the costs - made a decision (clause 16 of PBU 9/99). Court decisions are considered legal after they enter into force. To account for state duties, account 68 is used, and legal costs are accounted for in the subaccount “Settlements on claims” of account 76.

Important terms of the agreement between a lawyer and a client

The agreement is drawn up in simple written form. The concluded contract must include the following terms and conditions: (click to expand)

• Data about counterparties - name of organizations, tax identification number, location address, contact phone number, other important details of the parties. The data may contain any details entered at the request of the parties.
• Information about the affiliation of the person provided with assistance to the bar.
• The name of the document is an acceptable type of agreement, preliminary agreement, or other applicable form.
• The subject of the contract, which is the main and mandatory condition of the contract.
• Deadlines for execution, cost of assistance provided and procedure for covering lawyer’s expenses.
• Place of conclusion of the contract, which allows you to obtain information about jurisdiction.
• Date of conclusion of the contract. Any date can be included in the contract. In this case, the start date of the contract for the provision of legal services is the day the document is signed by the last party.
• Liability for violation of obligations by the parties.

Essential conditions, in the absence of which the contract is considered invalid, include information about the parties, confirmation of the lawyer’s right to practice, subject matter, cost of the service, procedure for compensation of costs and liability.

Upon execution of the contract, the parties sign an act, which is drawn up in any form indicating the details of the parties: the provider of services and the recipient of the act. The document is an annex to the contract and a form of primary accounting, on the basis of which expenses are taken into account. There is no unified form of the act. The document is drawn up in any form indicating details that allow identification of participants, the cost of the service, the fact of its provision Legal services (

Tax accounting

Accounting for legal expenses differs in a number of rules. All costs must be confirmed. These papers can be used as confirmation:

• Checks and receipts.
• Agreements for the provision of legal services.
• Travel tickets.
• Extracts from investigative bodies.

It is recommended that the costs of pre-trial settlement be specified in the agreement with the lawyer. Costs are calculated on the basis of documents attached to the case.

The costs will be classified as non-operating expenses. Expenses that can be included in this composition are stipulated by Article 106 of the Arbitration Procedure Code of the Russian Federation and Article 94 of the Code of Civil Procedure of the Russian Federation. However, the list considered is not exhaustive. Sometimes the court recognizes legal expenses that are not included in the list. For example, these may be the costs of copying documents, translating them, or notarizing them. Expenses are not recognized when their connection with the proceedings is not obvious.

When expenses will definitely not be recognized

The conditions for recognition are specified in paragraph 1 of Article 252 of the Tax Code of the Russian Federation. In particular, these are:

• Validity.
• Availability of supporting documents.

Expenses are not recognized in the following cases:

• No connection to legal proceedings. For example, a company entered into a subscription service agreement with a law firm. During the trial, the manager contacted lawyers about something unrelated to the case. Related expenses will not be recognized. In this case, they will be taken into account as part of expenses for legal services on the basis of paragraph 1 of Article 264 of the Tax Code of the Russian Federation.
• The representative did not take part in the proceedings. For example, the company paid for representation services, but the representative did not take part in any meeting.
• The firm is not a party to the proceedings. That is, the subject must be either a plaintiff, or a defendant, or a third party. If the firm is not a party, there will be no basis for recognizing legal costs.
• It is not the company that is involved, but its employee. If a company employee is held accountable, it will be his personal matter. That is, the company does not have to take into account associated costs.

Sometimes the company resorts to pre-trial settlement of the case. Related expenses for lawyers and consultants will also not be recognized. The corresponding decision was given by the Presidium of the Supreme Arbitration Court in Resolution No. 9131/08 of December 9, 2008.

Recognition of state duty

The fee must be included as an expense on the date the claim is filed. The latter is determined on the basis of the court's note on acceptance of the claim. Some do this on the payment due date, but this is not correct. The duty must be included in non-sales services on the basis of paragraph 1 of Article 265 of the Tax Code of the Russian Federation.

The fee may be returned by court decision. The amount received must be included in the structure of non-operating income on the basis of paragraph 3 of Article 250 of the Tax Code of the Russian Federation. Inclusion is made on the date the decision on the refund of the duty comes into force.

On what date should expenses be taken into account?

Legal costs are considered non-operating, and therefore they will be recognized on these dates on the basis of paragraph 7 of Article 272 of the Tax Code of the Russian Federation:

• Settlement date based on the terms of the agreement.
• The date of presentation to the payer of the papers on the basis of which calculations are made.
• The final date of reporting or tax time.

The company has the right to set its own dates for reflecting expenses on the basis of Letter of the Ministry of Finance No. 03-03-04/2/149 dated May 26, 2006. Typically, this is the date the service agreement is signed. For example, a company entered into an agreement with a lawyer. The date of signing the document will be the date of recognition.

Legal expenses reduce taxable income, regardless of whether they are recovered through the court. What does this mean? If the entity wins the case, the person found guilty must pay all of the winning party's legal costs. However, expense recognition is done regardless of wins or losses.

IMPORTANT! The costs of a third-party lawyer are also taken into account when the organization has a full-time lawyer on staff. However, if the work is carried out by a full-time lawyer, the costs are reflected in the structure of labor costs on the basis of Article 255 of the Tax Code of the Russian Federation. Expenses for your lawyer cannot be recovered from the losing participant in the case.

Documentary confirmation

The largest portion of expenses is legal fees. Related expenses can be verified. The following documents can be used as confirmation:

• Agreement with a specialist.
• Certificate of completed work.
• Payment papers.

The documents must indicate a list of services provided and their cost. It is necessary to record services in such a way that their connection with the proceedings can be traced. It is also recommended to prepare documents for confirmation:

• Power of attorney for a representative.
• Claim.
• Protocol of the proceedings.
• Judgment.

IMPORTANT! The enforcement fee is not taken into account when determining income tax.

Legal services included in expenses

The services of a lawyer must be economically justified, documented and used for the activities carried out by the enterprise. If the services comply with the accounting requirements, the amount is included in the justified costs. Costs in accounting are taken into account in accordance with PBU 10/99. Legal services are not directly related to the main activities of the enterprise; therefore, they are included in other expenses of the enterprise.

The main conditions for cost accounting include the following requirements:

• Amounts should be recorded at the cost reflected in the service agreement.
• The cost of services is accepted as expenses after they are received, as evidenced by the act signed by the parties.
• The cost of services will be reflected as part of other expenses in the period of their actual implementation.
• To account for amounts as expenses, it is important to have evidence that legal services were provided directly to the company. The costs of a lawyer in relation to officials are not included in the costs. The costs of considering administrative claims against managers and responsible employees are borne by the individuals themselves.

For tax purposes, expenses for a lawyer's services are included in non-operating expenses. Costs are taken into account when determining the tax base for income tax and the single tax paid in connection with the application of the simplified tax system.

Service concept

There are different options for describing what a service is:

1. This is an activity that does not create an independent product, materialized object or material assets.
2. A series of actions that are tools for the production of value, they can create value, but they themselves are not independent value.

We will use the concept given in the Tax Code of the Russian Federation: activities, the results of which do not have material expression, are sold and consumed in the process of carrying out this activity (Part 1, Chapter 7, Article 38, paragraph 5).

Accounting entries when receiving legal services

The cost of services provided by a lawyer is recorded in account 76, to which subaccount 5 “Settlements with other suppliers” is opened, or in account 60. Accounting transactions are accompanied by standard postings.

To include in expenses the cost of services under the contract, it is necessary to have detailed confirmation that allows you to determine which services are provided. In this case, the cost specified in the agreement of the parties is accepted in the amount of the contract. In contrast to the situation where the principal accepts the costs at full cost, if the costs are compensated by the defendant in a court hearing, the amount must meet the requirement of reasonableness and comparability with similar services.

Features of accounting

As part of accounting, the state duty must be taken into account in the structure of other expenses on the basis of paragraph 12 of PBU 10/99 “Company Expenses”. Expenses must be recognized in the period in which they are incurred. This does not take into account the actual date of transfer of funds.

Fines and penalties are included in the structure of other expenses based on paragraph 8 of PBU 9/99 “Company Income”. Acceptance for registration is carried out in the amount awarded by the court. Analytical accounting of vessels with different counterparties and for different claims is carried out in separate sub-accounts.

The entries for accounting for legal expenses will be as follows:

• DT91 subaccount “Other expenses” KT68. Calculation of fees when filing a claim.
• DT68 KT51. Transfer of duties to the budget.
• DT51 KT76 subaccount “Calculations for claims”. Receipt of funds based on a writ of execution.
• DT76 subaccount “Settlements on claims” KT91 subaccount “Other income”. Reimbursement of duties and losses incurred.

All transactions are confirmed by primary documentation: writs of execution, receipts, and so on.

Resolution of controversial issues through litigation is accompanied by costs associated with the consideration of the claim. Legal costs include state fees and costs incurred in considering the claim. The amount of payment and the order of acceptance of costs depend on the characteristics of the claim. Before entering amounts into accounting and accepting them as expenses, you must have an idea of ​​the procedure for their formation. In this article we will talk about accounting for legal expenses and give examples of accounting entries.

Reimbursement of attorney's fees by the losing party

Costs of litigation, including attorney's fees, may be awarded to the losing party. The court sets a deadline for repaying the debt. The amount repaid by the defendant may be repaid in full or in proportion to the amount of satisfied claims.

The peculiarity of reimbursement of expenses is the possibility of presenting them only if their value is proven. For this lawsuit, the costs of a lawyer’s services for a specific court are allocated. Services must be paid for, and a corresponding document is presented to the court. You can demand compensation for services only during a court hearing on this issue or in a separate claim (Read also the article ⇒ Provision of services - accounting entries 2021).

Example of accounting for attorney's fees

The organization Remontnik LLC filed a lawsuit with claims for violation of the contractual terms of Locksmith LLC. A lawyer was invited to accompany the trial, whose expenses amounted to 22,800 rubles. As a result of the claim, the court satisfied the claim in the amount of 50%, which was equally attributed to compensation for legal costs, including the costs of a lawyer.

The following entries were made in the accounting of Remontnik LLC: (click to expand)

1. The expenses for lawyer's services are reflected: Dt 91/2 Kt 60 in the amount of 22,800 rubles;
2. The lawyer's fees are taken into account: Dt 60 Kt 51 in the amount of 22,800 rubles;
3. The defendant's debt to compensate for the costs of a lawyer was taken into account: Dt 76/2 Kt 91/1 in the amount of 11,400 rubles;
4. The amount received from the defendant is reflected: Dt 51 Kt 76/2 in the amount of 11,400 rubles.

The debt of the defendant to pay part of the plaintiff’s expenses is reflected in accounting after the court decision enters into force.

How can you organize your accounting?

To avoid negative consequences for business, each newly created (registered) business entity needs to solve the primary task - organize accounting.

How can you solve the issue of accounting? There are several options here, and they will depend on a number of factors:

• The activity of your business. In the terminology of accounting services, this is called the “number of transactions”, it means any business actions (income/expenses) that changed the ratio of your income and expenses even by a ruble;
• Diversity of areas of your business. What we mean here is how similar business transactions will be when doing accounting;
• Seasonality or cyclicality of business activity;
• The taxation system, because, for example, accounting on OSNO is much more complicated than on the simplified tax system 2016;
• Number and categories of your employees. The more there are, the greater the volume of accounting services will be required for reporting, payroll and other mandatory payments;
• Availability of export-import activities (or foreign economic activity);
• And finally, the amount you are willing to spend on quality accounting services. However, it’s not even worth spending money on low-quality ones, because... they are guaranteed to result, in the end, in financial losses.

The types of accounting services include: services of an accountant (full-time or even an entire department); incoming or remote accountant; online services, as well as accounting outsourcing, that is, specialized companies or firms providing accounting services. We invite you to consider these options in more detail.

Determination of legal costs by the judicial authority

Recognition of costs incurred is carried out by the court in each specific case. Costs cannot be allocated to the losing party without filing a claim. The need to cover expenses must be addressed to the court and a request must be included in the statement of claim or in the form of additional demands stated during the hearing. When covering expenses, several repayment options arise.

Expenses incurred by the plaintiff in the course of pre-trial consideration of claims are not covered. Expenses often include costs for the services of lawyers. The courts do not recognize such expenses and do not attribute them to the losing party.

In some cases, the losing party may be able to avoid paying the winning party's costs. In order for the court to make a decision, it is necessary to apply to the court to provide documentary evidence of the difficult financial situation, the unintentionality of the motives for causing the damage, and to pay off the claims during the proceedings or upon receipt of a deferment.