VAT when providing services to foreign organizations in electronic form. What accountants need to know

Currently, when working with foreign freelancers, it is possible to use services that provide electronic services. This eliminates many organizational issues related to the interaction between the freelancer and the customer. But if the contract is concluded with a foreign service, the Russian customer has a question: is it necessary to pay VAT when paying remuneration in this case? Let's talk about this in our article.

Value added tax is paid to the Russian budget not only by domestic taxpayers, but also by foreign organizations. They have such an obligation if they provide services electronically.

Regulatory documents governing the determination of the place of sale of services

To determine the place of sale of services (works) purchased from foreign organizations, you should use different regulatory documents. Therefore, first of all, it is necessary to establish where the foreign seller is from.

When working with counterparties from non-CIS countries, taxpayers work according to the norms of the Tax Code of the Russian Federation.

The Tax Code of the Russian Federation does not apply to partners from the EAEU and has no legal force, therefore the requirements of the Treaty on the EAEU dated May 29, 2014 should be taken into account. At the same time, if the Treaty on the EAEU makes a reference to the local legislation of the EAEU member country, then we use it, incl. Tax Code of the Russian Federation.

The wording of Art. 148 of the Tax Code of the Russian Federation and the Treaty on the EAEU dated May 29, 2014 are almost identical, but there are still differences. Therefore, our article provides a comparative analysis of all main types of services and work under the Tax Code of the Russian Federation and the Treaty on the EAEU.

The organization entered into a contract with the Spanish company Transporten for the provision of transportation, transportation and related services in the Russian Federation.

The place of sale of services is the Russian Federation.

Since the supplier is a foreign organization that is not registered with the tax authorities, the point of departure and destination are located on the territory of the Russian Federation (clause 4.1, clause 1, article 148 of the Tax Code of the Russian Federation).

The organization entered into a contract with the Kazakh company Tasymal for the provision of transportation, transportation and related services in the Russian Federation.

The place of sale of services is not the Russian Federation (clause 5, clause 29 of the EAEU Protocol).

Because there is no norm similar to the Tax Code of the Russian Federation (clause 4.1, clause 1, Article 148 of the Tax Code of the Russian Federation) .

VAT and import of services

When determining whether a particular action is considered an import, you need to ensure that:

• the place where the purchased service is provided is the territory of the Russian Federation;
• the service is supplied by a foreign enterprise that is not registered with the tax service of the Russian Federation;
• the work carried out by this foreign organization is not included in the list of services, the place of sale of which is not recognized as Russia (clause 1.1, Article 148 of the Tax Code of the Russian Federation).

The service is subject to VAT only if the place of its provision is located within the Russian Federation.

At the same time, according to subparagraph 4, paragraph 1 of Article 148 of the Tax Code, if the person purchasing the service is engaged in various economic transactions in Russia, then the place of provision of services is considered to be the Russian Federation.

In cases where the service is provided by a foreign enterprise that is not officially registered with the Federal Tax Service, the person from Russia purchasing the service acquires the status of a tax agent.

This happens in accordance with paragraph 2 of Article 161 of the Tax Code of the Russian Federation.

In addition, the Ministry of Finance notes that the status of a foreign service provider applies not only to business entities, but also to individual entrepreneurs who are not residents of the Russian Federation. It should also be taken into account that the import of services is carried out without customs clearance.

How to determine the place of sale of services?

General rule for determining the place of sale of services (works)

The general rule for determining the place of sale is at the place of activity of the performer, i.e. the seller of services (works).

The place of activity in the Russian Federation or not in the Russian Federation is determined by the place of registration of the organization (entrepreneur):

If there is no state registration, then the place of activity is determined:

• based on the place specified in the constituent documents;
• places of management of the organization;
• location of the permanent executive body of the organization;
• place of residence of an individual entrepreneur.

For branches and representative offices of an organization, the place of activity is determined:

• location of the permanent representative office in the Russian Federation.

When purchasing services (works) from a foreign partner who has a permanent establishment in the Russian Federation, the Russian buyer no longer acts as a tax agent for VAT. The foreigner bears the tax burden himself (Article 306 of the Tax Code of the Russian Federation).

The above norms are established in paragraph 2 of Art. 148 Tax Code of the Russian Federation.

What is meant by registration in the Russian Federation?

Registration in the Russian Federation is the state registration of an organization (entrepreneur) with the Federal Tax Service of the Russian Federation with an entry in the Unified State Register of Legal Entities (USRLE) and the Unified State Register of Individual Entrepreneurs (USRIP).

At the same time, tax registration is carried out and an entry is made in the Unified State Register of Taxpayers (USRN), and a Taxpayer Identification Number (TIN) and Registration Code (KPP) are assigned.

You can check information about state registration on the portal of the Federal Tax Service of the Russian Federation

When does the general rule not apply - the place of sale of services is determined by the place of activity of the contractor?

There are a number of exceptions to the general rule “the place of sale is determined by the seller’s place of business.”

To correctly determine the place of sale, you need to check whether the purchased or provided services (work) are named in the list of exceptions. If services and works are not listed in any of the blocks with exceptions, then the general rule applies - the place of sale is determined by the seller’s place of business .

Determining the place of sale of services and work should always begin with exceptions and then move on to the general rule.

To determine the place of implementation of services, work, you need to go through each block presented below and find your subject of the agreement (contract).

Blocks begin with exceptions and end with a general rule.

The table also provides information for cases of purchasing services (work) from partners from non-CIS countries and from the EAEU.

This scheme is universal and can be used mirrored to determine:

• are we a tax agent for VAT when purchasing services (work) from a foreign seller;
• Should our organization calculate VAT when it itself provides services (work) for a foreign buyer?

The logic for working with the circuit is simple - you should define:

• your status under the contract – buyer / seller;
• place of sale of services (works) - Russian Federation / not Russian Federation;
• procedure for calculating VAT - VAT is calculated / VAT is not calculated.

These tables present a general scheme for calculating VAT for the “import” and “export” of services and work from a foreigner.

Using the flowchart given below, let’s move on to specifics and determine the place of sale of the purchased (sold) services and works from a foreigner.

How foreign organizations calculate and pay VAT to the budget when providing electronic services

If a foreign organization provides electronic services to customers located on the territory of the Russian Federation, then the Tax Code of the Russian Federation obliges them to register for tax purposes in the Russian Federation (clause 4.6 of Article 83 of the Tax Code of the Russian Federation). Based on the results of the tax period (quarter), foreign organizations calculate VAT and pay it to the budget by the 25th day of the month following the reporting quarter. The amount of tax by such foreign organizations is determined at a rate of 16.67% of the total cost of the service provided (clause 5 of Article 174.2 of the Tax Code of the Russian Federation). Those. The formula for calculation looks like this:

Service cost / 120 * 20

Foreigners who provide electronic services are required to report VAT amounts to the inspectorate by submitting an electronic declaration.

Flowchart Determining the place of sale of services

Works, services related to real estate (exception No. 1)

Works, services related to movable property (exception No. 2)

Services in the field of culture, art, education, physical culture, tourism, recreation and sports (exception No. 3)

Place of business of the buyer of services (exception No. 4)

Location of departure and destination (exception No. 5)

Place of business of the Service Provider (general rule)

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