Payment of housing to employees in 2021: tax accounting

Payment of housing to an employee

When employer companies invite specialists from other cities and regions to work for them, employees face the problem of renting housing not only for themselves, but also for their families. Companies often offer to pay rent for such specialists, which can influence the decision to move. Such expenses are economically justified, but they often raise many questions among inspection authorities.

Important! A big advantage for employers is that regulatory authorities do not prohibit recognizing such expenses as tax expenses.

But it is possible to recognize the costs of paying for an employee’s housing as tax expenses only under the following condition: they must be formalized as one of the parts of remuneration, which must be stipulated either in the employment or collective agreement (letter of the Federal Tax Service of Russia No. VE-22-3 / [email protected] ).

Documents for registration of services

The basis for the provision of the service is an agreement concluded between the hotel business enterprise and the recipient - a person or organization. In the payment documents, the act, a reference is made to the contract. The document must contain the required details of both parties.

The main mandatory provisions of the contract are supplemented by clauses at the discretion of the hotel company. The document reflects the rights and obligations of the parties, the procedure for covering material damage, consideration of controversial issues and other points. The agreement must be signed by the parties. If the representative of the legal entity does not have a seal, a power of attorney is attached to the agreement.

An enterprise may issue another document to a retail consumer confirming the conclusion of an agreement for the provision of services. The document must contain mandatory details similar to the content of the clauses of the contract.

The procedure for reflection in tax accounting

As expenses for profit tax purposes, a company recognizes the company's costs incurred as part of production activities aimed at generating income, provided that they are economically justified and documented. Those expenses that are associated with treatment, rest, organization of income or payment for personal goods of the employee, as well as other similar expenses are not subject to accounting. Payment for housing cannot be attributed to similar expenses, since it is directly related to the employee’s performance of his job duties. This can be justified by the fact that payment for housing to an employee is made not for his personal purposes, but for him to fulfill his duties within the framework of labor relations. Accordingly, such expenses can be taken into account for tax purposes.

Types of services in the hotel business

Enterprises offer hotel-type services to organizations or the public, presented in the form of:

• Hotels are places of temporary accommodation provided for a fee. Enterprises provide additional services according to the list established by the company. Hotels are temporary accommodation establishments with at least 10 rooms;
• Hotels are places of temporary residence similar to hotel services. The difference from hotels is a higher level of comfort. In the Russian hotel classification there is no concept of a hotel;
• Hostels are budget forms with the absence of separate rooms and a fee charged per bed. Everyday amenities are included in the price and are available in common areas.

The main evaluation criterion is classification according to world standards, which evaluates the level of services depending on the degree of comfort. In addition to world standards, a number of countries use their own classification system for hotel business enterprises. In the Russian Federation, the classification system is regulated by Order No. 35 of the Ministry of Sports and Tourism of the Russian Federation dated January 25, 2011. Regardless of the star rating, hotel business enterprises carry out accounting and document flow according to standard rules.

Payment for housing as part of salary

All company expenses can be divided into two main groups: those related to production or sales, as well as non-operating expenses. Payments such as renting property for tax purposes are included in the first group of expenses. At the same time, the question arises whether the rental of residential property can be classified as expenses associated with production and sales. If the involvement of a highly effective specialist is carried out for the interests of the company, then they can be recognized as part of such a group. A specialist living in another city would not independently change his place of residence. The procedure for reimbursement of housing costs is prescribed, as well as the amount of compensation in a collective agreement, labor agreement, or other regulatory act of the company.

Thus, if in one of the listed documents the company provides for the procedure for reimbursement of rental housing expenses, then they can be recognized as expenses related to wages. This can be justified as follows: wage costs recognize any accruals, both in cash and in kind, made in favor of employees, if they are provided for in an employment contract or other contract. Labor costs are recognized as expenses associated with production and qualifications. Such expenses can be taken into account if they are recognized as remuneration and are also specified in the terms of the employment contract. Otherwise, such costs are only of a social nature and cannot be taken into account when calculating income tax.

Features of doing business

The hotel business has features of accounting and sales of services. Providing hotel services:

• Carried out on the premises of the service provider. An inseparable part of the provision of services are the material resources and staff of the hotel;
• Has a limited time frame. The service cannot be accumulated over a certain period. There is no work in progress in hotel accounting. Income received and expenses incurred are determined based on the results of the month;
• Depends on the influence of socio-economic factors;
• Demand is seasonal.

Hotel business offers may additionally include medical, transportation, and personal services. Additional types of activities are subject to inclusion in the OKVED list of constituent documents of the enterprise . If necessary, licensing is required. Services are provided on the basis of real estate owned by an organization or individual entrepreneur on the basis of ownership or lease.

Restriction on paying for housing to an employee

When paying for housing, you should also take into account the conditions of the twenty percent limit for wages in kind. Only no more than 20% of the monthly salary can be taken into account for labor costs incurred not in cash.

Important! If an employee rents housing for himself, and the employer only compensates for housing costs and does not transfer anything for rent himself, then it turns out that the employee receives this payment in cash. And in this case there is no share of wages in kind.

However, exceeding this 20% limit is also risky, otherwise it may lead to disputes with tax inspectors.

Solving common problems

A police officer may have some difficulties in providing monetary compensation for renting and subletting residential premises. For example, he has permanent registration in the apartment of his relatives, but in fact lives in rented housing. In this situation, it is not registration that plays a role, but the right to property, so if a citizen is only registered, but is not a co-owner, then he can demand compensation.

What to do:

1. Submit a compensation report with a list of required documents in the prescribed manner.
2. In case of refusal, require it in writing.
3. The refusal is attached to the corresponding claim in court. This can be done within 3 months.
4. In case of refusal, appeal the verdict, based on the fact that Resolution No. 1228, paragraph 2, refers to an employee who does not have housing. There is no question of registration.
5. As statistics suggest, it is better to deregister during the consideration period or before filing a claim. Since the defendant can justify the refusal by the fact that registration gives the right to live in the apartment.
6. The best option would be to refuse registration before submitting the report and register at the place of stay (analogous to temporary registration) in rented housing.

It often happens that an orphan is denied compensation . If it turns out that an older child remains registered in the parents’ apartment, and on this basis cannot receive compensation, he should know that this is unlawful. When a child is removed from the family, he is registered with the government agency in which he lives.

And upon release from an orphanage, an adult citizen has the right to be provided with free housing. As long as he is on the waiting list, a citizen has the right to receive compensation for hiring (renting) premises.

In any case, if a refusal is received, it must be in writing, indicating the reason. The basis can only be the provision of a Federal or regional law, which the head of the institution must refer to.

Advice! If the reason is not justified or not specified at all, the employee has the right to file a claim in court and attach the received refusal to it.

Other ways to reflect housing costs

Labor costs for tax purposes also include the cost of utilities, as well as free housing provided. But according to the tax authorities, such expenses should not be attributed to non-resident employees.

Important! Based on the Labor Code (168 Labor Code of the Russian Federation), companies must bear the costs associated with renting housing only if the employee is sent on a business trip or his work is of a traveling nature.

Based on this, payment for housing for a nonresident employee at the location of the employer’s company should not be included in the payments provided for by the Labor Code of the Russian Federation.

VAT accrual for the provision of hotel services

Hotel enterprises are VAT payers when using the general regime. Services provided to legal entities are drawn up with a full package of documents, including an agreement, a certificate of services performed, and an invoice. The recipient of the service has the opportunity to deduct VAT.

Businesses with VAT liability must present the tax to retail consumers. The VAT amount is included in the price of the service. The tax is not allocated as a separate amount in the tariffs. VAT paid to the budget is determined by calculation. Enterprises exempt from paying tax or applying special regimes do not have obligations to charge and pay VAT.

Withholding personal income tax and paying contributions from daily allowances

According to paragraph 4 of Art. 226 of the Tax Code of the Russian Federation, personal income tax must be calculated and withheld on the nearest date of payment of cash income to the employee. Before this, management must approve the advance report (according to the letter of the Ministry of Finance of Russia dated January 14, 2013 No. 03-04-06/4-5). This is due to the fact that the employee, even before the advance report, may underuse the funds allocated to him on a business trip: the employee is obliged to return the excess. The opposite situation: the employee exceeded the allocated amount (for example, due to delays in work matters or simply overspent).

Money that is allocated to a posted employee for reporting purposes is not considered an economic benefit until the employee returns from a business trip and the subsequent approval of the expense report. Before payment, the employee must provide documents about the time of the business trip and attach receipts explaining the expenses.

Contributions from excess amounts must be paid before the 15th day of the next month (Federal Law of July 3, 2021 No. 243-FZ).

Subhire

In practice, it is also possible to provide housing to an employee under a sublease agreement for residential premises. This type of contract is provided for in Article 685 of the Civil Code of the Russian Federation. In this case, the company first enters into a rental agreement directly with the owner of the apartment, but with the conditions for the possibility of subletting. At the same time, a sublease contract for residential premises is concluded with its employees. The employer will be the employer, and the employee of the organization will be the sub-employer. In this case, the subtenant does not acquire independent rights to use the residential premises. The term of the sublease agreement must coincide with the term of the lease agreement.

Refund of compensation in case of trip cancellation and force majeure

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If a planned business trip is cancelled, the employee can receive money for unused tickets. You can also get a refund of the amount spent on obtaining a visa except for the fee paid.

It is worth considering that when returning tickets, the airline in most cases returns only part of their cost (especially on cheap fares). In this case, the difference in the amount paid and the amount returned is usually justified as a fine for violation of transportation rights.

If force majeure occurs during the business trip itself (bad weather, flood, plane breakdown, etc.) and the employee cannot return home on time, then the company must provide him with daily allowance and pay for the necessary accommodation. In this case, the employee must put a stamp/mark on the travel document (certificate) with the actual date of departure. If a travel document is not provided for by the organization’s accounting policy, then a document confirming the fact that the employee was delayed through no fault of his own can be a certificate from the airport about the cancellation or delay of the flight.

Who is entitled to compensation payments?

Housing legislation establishes categories of persons entitled to state support, which consists of providing compensation (or subsidies). These include:

• owners of residential apartments;
• persons temporarily using residential apartments of the relevant housing stock;
• tenants who have entered into a rental agreement for a private residential property;
• members of housing cooperatives.

In addition, a person applying for compensation for payment of living space and housing and communal services must meet the following requirements:

• such a person’s expenses for utility bills must be more than 22% of the total income of the entire family;
• be a citizen of the Russian Federation;
• be registered in the living space, the expenses for which are subject to compensation;
• have no debts to pay for the apartment and for housing and communal services.

Cash compensation payments are also established by local authorities. For example, according to the decision of the governor of the Khabarovsk Territory, in November 2015, the threshold index for increasing payments for housing and communal services was determined at the level of 7%. Residents of the region whose monthly payment exceeded this indexation level will be provided with compensation for utility bills starting in January 2021. It is credited automatically. The amount of compensation is indicated in the subscriber's receipt; an application from the homeowners is not required.