Unilateral settlement is permitted by Art. 410 of the Civil Code of the Russian Federation. For this purpose, the legislator has provided for the procedure for implementing the procedure through a written statement from one of the interested parties. To initiate such actions, it is necessary to ensure that the amounts of debts comply with several criteria established by civil law:
- business entities interested in the transaction have contractual relations, they can document them;
- according to accounting data, both participants, under different agreements, act in relation to each other simultaneously as a creditor and a debtor;
- obligations have a single measure (can be considered homogeneous);
- for counter debts the payment deadline has arrived or it was not fixed in the contracts.
Unilateral offset is impossible if the debt was caused by the collection of alimony or compensatory amounts for compensation of damage caused to the health of an individual. Procedures cannot be initiated in situations where the statute of limitations has passed and one of the parties to the transaction is in the process of bankruptcy. The prohibition is also established for cases where the obligations of only one of the parties to the agreement have come due.
Settlement of mutual claims: when and how to carry out
1. Under what conditions can the debt of counterparties be repaid by offset?
2. How to correctly arrange the offset of mutual claims.
3. How to reflect the offset in accounting and tax accounting.
In practice, situations often arise when the same counterparty acts as a debtor and as a creditor at the same time. For example, organization “A” supplies organization “B” with drinking water for the office, and at the same time purchases advertising services from organization “B”.
There can be a lot of similar examples, the main thing that unites them is the presence of mutual debt, which the parties have the right to pay off by offsetting mutual claims. This “non-monetary” method of debt repayment has a number of advantages, the main one of which, perhaps, is the possibility of settlements even in the absence of available funds.
To better understand the intricacies of design, implementation and reflection in accounting for offsets, I suggest you read this article.
When is it possible and when not to offset
The ability to pay off obligations by offsetting mutual claims is provided for in Art. 410 of the Civil Code of the Russian Federation. The same rule of law establishes the conditions necessary for mutual settlement between counterparties:
- Presence of counter debt. That is, each party acts as both a debtor and a creditor in relation to the other party.
- Uniformity of requirements. For example, a monetary claim can only be offset by a counter monetary claim. If a monetary claim is offset by the delivery of goods, then we are talking more about a barter transaction, but not about offset.
- The deadline for fulfilling the requirements has arrived (either not specified or determined by the moment of demand). If the deadline for fulfilling the obligation is not specified, it must be fulfilled within a reasonable time after its occurrence. If the deadline for fulfilling the obligation is determined by the moment of demand, it must be fulfilled within seven days from the date of presentation of the demand.
In some cases, the law prohibits the offset of mutual claims. Thus, offset of claims is not allowed (Article 411 of the Civil Code of the Russian Federation):
- if one of the claims has expired, and the counterparty has declared this;
- for compensation for harm caused to life or health;
- on the collection of alimony;
- about lifelong maintenance;
- in other cases provided for by law or agreement.
The amount of debt does not play a role when offsetting mutual claims: the parties can have either equal or different debt. If the amounts of obligations do not match, then the offset is carried out for a smaller amount. In this case, the debt of one participant in the mutual offset is terminated completely, and the other only partially.
The procedure for conducting and registering mutual offsets
If all of the above conditions are met, then the organization (IP) has the right to offset mutual claims with its counterparty. There are two options for documenting offsets:
- unilaterally at the request of one of the parties;
- by drawing up a bilateral agreement on netting.
Let's take a closer look at each of the options.
1. Carrying out mutual settlement at the request of one of the parties.
The possibility of offsetting mutual claims unilaterally is provided for by law (Article 410 of the Civil Code of the Russian Federation). To do this, the party initiating the offset must draw up an application for offset and send it to its counterparty.
The form of such an application is not regulated, so it can be drawn up in any form. In this case, the application must contain the mandatory details required for primary accounting documents (Clause 2, Article 9 of the Federal Law of 06.12.
2011 No. 402-FZ “On Accounting”):
- Title of the document;
- Date of preparation;
- name of the economic entity that compiled the document;
- content of the fact of economic life;
- the value of the natural and (or) monetary measurement of a fact of economic life, indicating the units of measurement;
- positions, surnames and initials, signatures of persons responsible for conducting and processing mutual offsets.
Download a sample application for offset of mutual claims
Regardless of the form in which the statement of offset is drawn up, its content must unambiguously reflect: what obligations of the parties are subject to termination as a result of offset (under what agreement, act, invoice, etc.), for what amount the offset is made, the date of test.
! Please note: To perform a unilateral set-off, confirmation is required that the counterparty has received a statement of set-off.
Source: https://buh-aktiv.ru/zachet-vzaimnyh-trebovanij-kogda-i-kak-provodit/
Offsetting a counter-obligation: possible restrictions
The presence of counter homogeneous obligations allows one of the parties to the contractual relationship to make a unilateral offset, which deprives the creditor of the right to claim against the debtor. If necessary, the possibility of offset is limited in the contract.
Prohibition of offsetting similar claims
The law prohibits offsetting claims for damages, as well as claims for which the statute of limitations has expired (Article 411 of the Civil Code of the Russian Federation). The Civil Code also indicates that the above list is not exhaustive. The disposition of the article refers to other regulations.
For example, offset is not made if the court has introduced a monitoring procedure against the debtor (paragraph 7, clause 1, article 63 of the Federal Law of October 26, 2002 No. 127-FZ “On Insolvency (Bankruptcy)”).
The court has the right to recognize the offset as a void transaction (resolution of the Federal Antimonopoly Service of the Volga-Vyatka District dated 02/08/13 in case No. A11-13730/2011). It also prohibits the set-off of similar claims when this would prejudice the interests of other creditors.
For example, the court concluded that a party had unlawfully set off. On the date when she sent an application for it to the second party, she had a debt to other creditors whose interests were violated by such an offset (resolution of the Volga-Vyatka District Court dated 16.10.
15 No. F01-4099/2015 in case No. A28-15133/2014).
The ban on unilateral offset is sometimes used by persons in respect of whom bankruptcy proceedings have been introduced.
The law does not allow, from the date of introduction of supervision, the termination of the debtor’s monetary obligations by offsetting a counter-similar claim if this violates the order of satisfaction of creditors’ claims (paragraph 6, paragraph 1, article 63 of the Federal Law of October 26, 2002 No. 127-FZ “On Insolvency (Bankruptcy) ").
At the same time, the debtor has the right to demand payment from persons who have unfulfilled monetary obligations to him. For example, the court satisfied the tenant’s claim and recovered the advance amount under the contract.
The court rejected the defendant's arguments about the debt on the part of the plaintiff, since bankruptcy proceedings were introduced against the latter and offset of claims is not allowed (resolution of the North-Western District Court of 09.12.
15 in case No. A56-66230/2014).
There are situations when a company abuses its rights, for example, it wants to set off and collect the same amount. Courts rightfully reject such claims if the amount for offset appears in other obligations between the parties.
It is impossible to set off a counterclaim if the deadline for it has come after the counterparty was sued. In this case, the defendant has the right to file a counterclaim (resolution of the Volga District Arbitration Court dated February 17, 2016 No. F06-4383/2015 in case No. A12-123/2015).
Limitation of offset in the agreement
To limit unilateral offset, agree on this condition in the contract using a clause in its text. In this case, the prohibition applies only to obligations from this agreement.
You can draw up a separate document prohibiting offset. This method is suitable if there are several agreements between the parties, according to which the parties act as creditors and debtors of each other. In one agreement, it is possible to agree to prohibit set-off for all obligations.
If the parties prohibited unilateral set-off, but one of them violated this obligation, the court will declare the set-off illegal. He will indicate that offset is not allowed, even if the creditor confirms the amount of debt (resolution of the Moscow District Court of December 16, 2015 No. F05-17647/2015 in case No. A40-16741/2015).
Illegality of offsetting similar claims
There are two ways to challenge a credit and eliminate its consequences:
- ignore the legal consequences of set-off (demand payment of the debt);
- challenge the offset in court.
In the first case, the company that received the offset statement may not attach importance to it. You can demand that the counterparty fulfill the obligation. This method is suitable if the counterparty made the offset illegally.
If a party intends to challenge a unilateral set-off, it may demand that the court invalidate the set-off as a unilateral transaction (clause 13 of the information letter of the Presidium of the Supreme Arbitration Court of the Russian Federation dated December 29, 2001 No. 65).
If the claim for which the counterparty made an offset is valid and the parties have not limited the possibility of offset, it will not be possible to challenge it (resolution of the Federal Antimonopoly Service of the Moscow District dated May 24, 2013 in case No. A40-16725/10-41-134). The defendant can also file a counterclaim aimed at offsetting the original claim (Clause 1, Part 3, Article 132 of the Arbitration Procedure Code of the Russian Federation).
The court can determine the amount of the parties' obligations and recover the difference remaining after offset (resolution of the Volga District Court of January 27, 2015 No. F06-19556/2013 in case No. A65-5260/2014).
Source: https://www.law.ru/article/20998-qqe-16-m9-08-09-2021-zachet-vstrechnogo-obyazatelstva-vozmojnye-ogranicheniya
How to set off counterclaims based on unilateral notice
To carry out a set-off based on a unilateral notification (application):
- make sure that in your situation it is possible to set off unilaterally;
- arrange offset by drawing up a notice or statement about it;
- send a notice (application) to the counterparty. If the contract specifies an address and/or method for sending legally binding communications, be sure to use them. The exception is if you know or should know that this address and/or method is not reliable.
If the address is not specified in the contract, send a notification to the address specified in the Unified State Register of Legal Entities or Unified State Register of Individual Entrepreneurs (clauses 63, 64 of the Resolution of the Plenum of the Armed Forces of the Russian Federation dated June 23, 2015 N 25). If the contract does not specify the method of delivery, we recommend sending the notification by courier or by mail with a declared value and a description of the attachment.
If enforcement proceedings are being carried out based on your requirements with the counterparty, send a notice of offset to the bailiff so that he stops it;
- make sure that the counterparty has received the notification (statement) . This is important since the obligation ends when the party receives an application for offset (clause 4 of the Information Letter of the Presidium of the Supreme Arbitration Court of the Russian Federation dated December 29, 2001 N 65).
As a general rule, a notification (application) can be considered delivered and the obligation terminated even in the case where it was received by the counterparty, but due to circumstances depending on him, was not delivered to him or the counterparty did not familiarize himself with it (clause 1 of Article 165.1 of the Civil Code RF).
However, it is in your best interest to verify that the counterparty actually received the notice. Otherwise, he will continue to have the debt that you stated was repaid. This means that he can assess penalties against her and recover them through the court.
Settlement of mutual claims between organizations of the Russian Federation
How to arrange mutual settlement between organizations? What are the requirements for mutual settlement? In what cases is mutual offset unacceptable? With the help of what document is the offset made? How are offset transactions reflected in accounting? – answers to all the questions listed in the Firmmaker article.
In the 90s, more than half of all payments in Russia were carried out in non-monetary form. At that time, due to a lack of working capital, bills of exchange and barter were actively used in mutual settlements between enterprises.
On the one hand, the use of bills and barter led to a decrease in the need for credit resources and other funds, but on the other hand, this only aggravated the problem of non-payments. The contradictions that arose led to the fact that organizations gradually abandoned the use of bills and barter in mutual settlements.
Today, if an enterprise does not have sufficient available funds to settle payments with counterparties, the operation of offsetting mutual claims is used.
What is offset
The Civil Code of the Russian Federation provides for various methods of repaying debts to creditors. The obligations of the parties are terminated on the grounds provided for by law, regulations or agreement (Article 407 of the Civil Code of the Russian Federation). The obligations of the parties may be terminated by proper execution of the contract (Art.
408 of the Civil Code of the Russian Federation), by providing compensation - payment of funds or transfer of property (Article 409 of the Civil Code of the Russian Federation) or as a result of debt forgiveness (Article 415 of the Civil Code of the Russian Federation).
The most common form of non-monetary settlements between organizations that are both creditors and debtors in relation to each other is mutual offset - the set-off of mutual claims (Article 410 of the Civil Code of the Russian Federation).
Settlement of mutual claims is a written agreement between two organizations on the mutual repayment of obligations that are similar in content. These obligations include requirements for payment for various goods, services or work.
Using an example, it might look like this: we provide accounting services, our client develops websites. At some point, we decided to order a website for a separate project and agreed to offset the services; after 2 months we accepted the work for 50 thousand rubles.
according to the act, signed a statement of reconciliation of calculations, issued an act of offset of accounting services for website development services.
Settlement is possible for two or more obligations. Two or more organizations can act as participants in mutual offset transactions, provided that the listed requirements are met. For offset, a statement from one party is sufficient. However, in practice, the decision to set off is made by all parties.
When is offset possible?
In Art. 410 of the Civil Code of the Russian Federation establishes the basic requirements for conducting mutual offsets between organizations:
- homogeneity of counterclaims, i.e. the parties’ requirements for each other must be qualitatively comparable;
- the maturity date of obligations, i.e. a netting transaction is valid if the terms of repayment of obligations – a) have already arrived, b) are either not specified, c) or are determined by the moment of demand;
- in cases provided for by law, it is allowed to set off a counterclaim of the same type that has not come due.
In what cases is offset not possible?
Art. 411. The Civil Code of the Russian Federation contains a list of situations when offset is unacceptable for obligations:
- for compensation for harm caused to life or health;
- about lifelong maintenance;
- on the collection of alimony;
- for which the statute of limitations has expired;
- in other cases provided for by law or agreement.
Other requirements mean special cases, namely:
– if this is specified in the agreement between the parties for the supply of goods, services or works;
– it is not permitted to exempt the notary chamber from the obligation to pay a membership fee to the compensation fund, including by offsetting claims against the Federal Notary Chamber;
– it is not permitted to exempt a member of an association of tour operators in the field of outbound tourism from the obligation to make contributions to the reserve fund, including by offsetting his claims to the association of tour operators in the field of outbound tourism.
The procedure for conducting and registering mutual offsets
Settlement can be done in two ways
- notification of the fact of offset,
- Set-off agreement (document - agreement, agreement or deed) signed by both parties.
Each of these methods has pros and cons.
The first option - Notification of mutual offset - is a simple way to complete it, takes little time, and does not require the consent of the parties. The notice is sent by registered mail with notification and is effective from the moment of receipt by the other party. However, this does not mean the consent of the other party and may serve as a basis for disputes.
The second option – Settlement Agreement – minimizes disputes between counterparties. The agreement both serves as a waiver of the party's right to claim the statute of limitations has expired and acknowledges the existence of a debt.
In addition, such agreements are signed, as a rule, by the executive body of the company, which reduces the likelihood of the counterparty refusing the fact of offset on the grounds that the notice of offset was not received or was received by an unauthorized person.
We recommend using the form of a bilateral document - an Agreement or a Deed, which we will discuss further.
We fix the debt in a document of mutual claims
Before drawing up the act, we recommend that you sign a Reconciliation Report of Mutual Settlements .
This document is optional, but it will help confirm the amount of debt (especially if some of the debt has already been paid) and avoid unnecessary disputes with the counterparty.
The decision on offset is drawn up using the appropriate document (Act or Agreement), drawn up in any form. The document on mutual settlement comes into force from the moment it is signed by the parties.
We recommend that you sign a reconciliation report for mutual settlements with your counterparty. This document is optional, but it will help confirm the amount of debt (especially if some of the debt has already been paid) and avoid unnecessary disputes with the counterparty.
The document for offsetting mutual claims of legal entities (sample Act, sample Agreement) must contain the following necessary information:
- details of the documents on the basis of which the debt was formed (number, name, date);
- the amount of total debt of the parties, including VAT;
- the amount of debt to be repaid through a netting operation, indicating VAT.
If there are more than two organizations, the document additionally indicates: a list of participants in the netting, the amounts of receivables and payables of each participant before the netting, acts of reconciliation of the participants in the netting, the amounts of receivables and payables of each participant after the netting.
The document must be signed by authorized representatives of the parties (manager, chief accountant).
Sample Settlement Agreement
A netting agreement can be concluded if the parties want to terminate mutual obligations in whole or in part.
Be sure to indicate which requirements are being terminated and to what extent. Since offset occurs by agreement, the requirements do not necessarily have to be homogeneous or with an established deadline (clause 4 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated March 14, 2014 N 16).
The sample is based on the example of offsetting part of the insurance premium under an insurance contract and rent for future rental periods.
Settlement agreement
| Moscow | January 21, 2021 |
Limited Liability Company “Sigma”, hereinafter referred to as “Party 1”, represented by General Director Ivan Ivanovich Petrov, acting on the basis of the decision of the general meeting of the company’s participants (Minutes dated 02.02.2015 N 1) and in accordance with the Charter, on the one hand and
Public Joint Stock Company “Insurance Company “Colossus”, hereinafter referred to as “Party 2”, represented by General Director Ashikhmin Sergei Ivanovich, acting on the basis of a decision of the board of directors (Minutes dated 09/04/2015 N 52) and in accordance with the Charter, on the other hand, hereinafter collectively referred to as the “Parties”, have drawn up this agreement (hereinafter referred to as the Agreement) as follows.
- The parties terminate mutual obligations by offsetting similar counterclaims.
- Reasons for the requirements:
- in accordance with the lease agreement dated December 3, 2018 N 7-060/Izh-18 (hereinafter referred to as the lease agreement), Party 2 is obliged to pay rent to Party 1 within the following terms:
– 30,000 rub. – 02/05/2019 (for January 2021),
– 30,000 rub. – 03/05/2019 (for February 2021),
– 30,000 rub. – 04/05/2019 (for March 2021).
As of the date of signing the Agreement, there is no debt under the lease agreement;
- in accordance with the insurance contract dated 01/09/2019 N DST 1801-11111/555 (hereinafter referred to as the insurance contract), Party 1 is obliged to pay Party 2 an insurance premium in the amount of 140,000 rubles. no later than 01/30/2019.
- The offset was made in the amount of 90,000 (ninety thousand) rubles. regarding the following requirements:
- requirement of Party 1 to Party 2 under the lease agreement to pay rent:
– for January 2021 in the amount of 30,000 (thirty thousand) rubles, VAT exempt, payment deadline – 02/05/2019,
– for February 2021 in the amount of 30,000 (thirty thousand) rubles, VAT exempt, payment deadline – 03/05/2019,
– for March 2021 in the amount of 30,000 (thirty thousand) rubles, VAT exempt, payment deadline – 04/05/2019;
- the requirement of Party 2 to Party 1 under the insurance contract to pay part of the insurance premium in the amount of 90,000 (ninety thousand) rubles, not subject to VAT.
- After the offset of mutual claims, Party 1 is obliged to pay Party 2 an insurance premium in the amount of 50,000 (fifty thousand) rubles. Obligations of Party 2 to pay rent for January, February, March 2021 in the amount of 90,000 (ninety thousand) rubles. discontinued.
- This Agreement comes into force from the moment it is signed by both Parties.
6. This Agreement is drawn up in two copies having equal legal force, one for each of the Parties.
It is important to know! Article 406.1 of the Civil Code of the Russian Federation. Compensation for losses arising in the event of the occurrence of circumstances specified in the contract
