How to draw up and register an invoice when receiving an advance payment

In what cases is it necessary to draw up

The seller or contractor, having received an advance (partial payment) from the buyer, must draw up an invoice and register it in the sales book. This rule applies when receiving any advances - for the supply of goods, performance of work, provision of services, transfer of property rights. In addition, an invoice must be drawn up even if the advance was received in kind. Such rules are established by paragraph 17 of Section II of Appendix 5 to the Decree of the Government of the Russian Federation of December 26, 2011 No. 1137.

Attention: for the lack of invoices for advance payments (partial payment), the organization may be fined.

The absence of invoices is a gross violation of the rules for accounting for income, expenses and the object of taxation. If the organization did not draw up invoices for only one quarter, the inspectorate has the right to fine the organization in the amount of 10,000 rubles. If a violation is discovered over several tax periods, the fine will increase to RUB 30,000.

If the lack of invoices led to an underestimation of the tax base, the fine will be 20 percent of the amount of unpaid tax, but not less than 40,000 rubles.

This procedure is provided for in Article 120 of the Tax Code of the Russian Federation.

When you don't need to issue an invoice

Do not draw up an invoice if you have received an advance payment for the supply of the following goods (work, services, property rights):

• the manufacturing period of which exceeds six months (clause 13 of article 167 of the Tax Code of the Russian Federation). The list of such goods (works, services) was approved by Decree of the Government of the Russian Federation of July 28, 2006 No. 468;

• which are not subject to VAT or are taxed at a rate of 0 percent (Articles 146, 149, 164 of the Tax Code of the Russian Federation).

In addition, if you are exempt from paying VAT under Article 145 of the Tax Code of the Russian Federation, do not draw up invoices when receiving advances for the supply of any goods (work, services, property rights).

This procedure is provided for in paragraph 17 of Section II of Appendix 5 to the Decree of the Government of the Russian Federation of December 26, 2011 No. 1137.

Situation: is it necessary to issue advance invoices if shipment against the received amount occurs in the same tax period within five calendar days from the date of receipt of money?

An invoice may not be drawn up in this case, but this may lead to disputes with the tax office.

As a general rule, an invoice must be drawn up no later than five calendar days from the date of receipt of the advance (clauses 1 and 3 of Article 168 of the Tax Code of the Russian Federation). In practice, the seller can ship goods (work, services, property rights) against the received advance payment after a short period of time. If this period does not exceed five calendar days from the date of receipt of the advance payment and if the receipt of the advance payment and shipment occur in the same quarter, then the seller (executor) may not issue an invoice for the received advance amount. The validity of this conclusion is confirmed by letters of the Ministry of Finance of Russia dated October 12, 2011 No. 03-07-14/99 and dated March 6, 2009 No. 03-07-15/39, and Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated March 10, 2009 No. 10022/ 08. At the same time, the Presidium of the Supreme Arbitration Court of the Russian Federation explained that if payment and sale occurred in the same tax period, then such payment is not recognized as an advance. The judges justified their position with the provisions of paragraph 1 of Article 54 of the Tax Code of the Russian Federation. According to this norm, the tax base for VAT is determined based on the results of the tax period. In this regard, the seller (performer), who received an advance payment in the same quarter and shipped goods (work, services) against the received amount, does not have the obligation to issue an invoice for the advance payment.

However, representatives of the tax service have a different point of view on this matter. Letter No. KE-3-3/354 of the Federal Tax Service of Russia dated February 15, 2011 states that the seller (executor) who has received an advance payment must issue an invoice in any case - regardless of when the shipment occurs against the received advance payment. This position is based on a literal interpretation of the provisions of paragraph 3 of Article 168 of the Tax Code of the Russian Federation, which does not contain any exceptions in relation to advances, the obligations for which are repaid by the seller (executor) within five calendar days.

Since a unified approach to resolving this issue has not been developed, it is possible that refusal to issue invoices for advances will lead to disputes with inspectors. But taking into account the position of the Presidium of the Supreme Arbitration Court of the Russian Federation, the organization has a high chance of defending its position in court.

If the receipt of the advance and the shipment occur in the same quarter, then in the VAT return for this quarter indicate:

• tax base - twice (in the amount of the advance payment received and the cost of shipped goods (work, services));

• tax deduction – once (in the amount of VAT accrued on the prepayment).

This is stated in letters of the Ministry of Finance of Russia dated October 12, 2011 No. 03-07-14/99 and the Federal Tax Service of Russia dated March 10, 2011 No. KE-4-3/3790.

Situation: Should the seller issue invoices for the difference between the payment he received for the entire month and the cost of all products shipped that month to the buyer? The agreement provides for continuous long-term supplies.

Yes, I should.

The difference between the cost of the shipped products (services, works) and the payment received in this case is considered an advance against future deliveries. And the supplier (contractor) must issue an invoice to the buyer for the amount of the advance (clauses 1 and 3 of Article 168 of the Tax Code of the Russian Federation). This must be done no later than the 5th day of the next month, but always in the same quarter when the funds were received. Register the invoice in the sales ledger.

Such clarifications are contained in the letter of the Ministry of Finance of Russia dated March 6, 2009 No. 03-07-15/39.

An example of how to draw up invoices when advances are received under an agreement for the long-term provision of communication services

The organization entered into an agreement in January for the continuous long-term provision of communication services. Under the contract, the organization provides communication services upon receipt of an advance payment from the buyer. In this case, the difference between the payment received during the month and the cost of services provided in the same month is counted towards payment for services provided by the organization in the next month. As services are provided, VAT accrued on the amount of advances is deductible.

The amounts of advance payments received from the buyer, the cost of communication services provided, as well as the procedure for issuing and registering invoices issued by the organization during the first quarter are presented in the table:

When keeping records

If the buyer carries out transactions both taxable and not subject to VAT, he is obliged to keep separate records of tax amounts for purchased goods (works, services). In this case, we are talking only about the amounts of tax on purchased goods (work, services), which are used to carry out both VAT-taxable and non-taxable transactions (clause 4 of Article 170 of the Tax Code of the Russian Federation).

On the need to keep separate records for VAT amounts that relate to prepayment, see clause 4 of Art. 170 of the Tax Code of the Russian Federation does not say. Therefore, invoices for the transferred amount of prepayment against future deliveries of goods that are purchased for use simultaneously in taxable and non-VAT transactions (see paragraph 2 of Article 170 of the Tax Code of the Russian Federation) are registered in the purchase book for the amount indicated in this invoice - invoice. This gives the buyer the opportunity to deduct tax on the entire prepayment amount. When registering an advance invoice for goods (work, services) that are purchased for transactions both taxable and not subject to VAT, column 16 of the purchase book indicates the entire amount of VAT indicated in this invoice (paragraph “y” p 6 Rules for maintaining a purchase book).

After shipment of goods (works, services), transfer of property rights and receipt of an invoice, the tax on prepayment, previously accepted for deduction, will have to be restored. When maintaining separate accounting for transactions subject to VAT and not subject to VAT, part of the input VAT is taken as a deduction, and the remaining amount is applied to the increase in the cost of purchased goods (work, services, property rights).

In what order to display

The invoice must be drawn up in two copies no later than five calendar days from the date of receipt of the advance payment (partial payment) (clauses 1 and 3 of Article 168 of the Tax Code of the Russian Federation).

Situation: will the seller be able to deduct VAT upon shipment of goods if he issued an invoice for the advance payment as part of this transaction later than five days later?

Yes, he can.

For invoices that are drawn up and issued in violation of the procedure, the inspectorate may refuse to deduct input VAT (Clause 2 of Article 169 of the Tax Code of the Russian Federation). However, this paragraph refers to buyers and input VAT; these provisions do not apply to the supplier (contractor). This is due to the fact that he accepts for deduction not the amount of tax presented to him, but the independently calculated amount of tax.

In addition, the seller charges VAT twice - upon receipt of an advance payment and at the time of sale (Clause 14, Article 167 of the Tax Code of the Russian Federation). In such conditions, refusal to deduct VAT accrued for payment to the budget upon receipt of an advance (partial payment) would mean double taxation of the same object. Thus, after shipment of goods (works, services, property rights), the supplier has the right to deduct the amount of VAT from the prepayment received. Even if the invoice was issued with violations. In this case, the buyer does not have the right to deduction under such an invoice.

Similar explanations are contained in the letter of the Ministry of Finance of Russia dated April 9, 2009 No. 03-07-11/103.

Invoices can be issued on paper and/or electronically.

Organizations have the right to issue invoices electronically by mutual agreement of the parties to the transaction. The buyer and seller must have compatible technical means to receive and process invoices. This is stated in paragraph 2 of paragraph 1 of Article 169 of the Tax Code of the Russian Federation.

The procedure for issuing and receiving invoices in electronic form was approved by Order of the Ministry of Finance of Russia dated November 10, 2015 No. 174n.

Creating invoices

An invoice can be created either manually based on the documents we created earlier, or automatically. The second method is convenient when there are a large number of these documents.

From DS receipt documents

Go to any of the above documents upon receipt of the DS, and click on the “Create based on” button and select the “Invoice issued” menu item.

The created invoice will be filled in automatically. Check that the details are filled out correctly and click on the “Submit” button.

The document will create a VAT movement to account 76.AB (“VAT on advances and prepayments”).

How to apply

Draw up an invoice for the advance received (partial payment) according to the standard form approved by Decree of the Government of the Russian Federation of December 26, 2011 No. 1137.

Please enter the following information on the invoice:

• serial number and date of invoice (line 1);

• name, address, tax identification number and checkpoint of the seller and buyer (lines 2–2b, 6–6b);

• details of the payment document for which the advance payment was received (line 5). If during the day the buyer made an advance payment using several payment documents, indicate the details of each of them on line 5 (letter of the Ministry of Finance of Russia dated March 28, 2007 No. 03-02-07/1-140). If you received an advance in non-cash form (for example, through barter or offset), put a dash in line 5;

• currency name (line 7);

• name of the goods supplied (description of work, services), property rights (column 1);

• prepayment amount (column 9);

• estimated tax rate – 18/118 or 10/110 (column 7);

• the amount of VAT based on the calculated rate (column 8).

In the lines “Consignor and his address” (line 3) and “Consignee and his address” (line 4), columns 2–6, 10 and 11, put dashes (clause 5.1 of Article 169 of the Tax Code of the Russian Federation).

Such rules are established by the Procedure approved by Decree of the Government of the Russian Federation of December 26, 2011 No. 1137, paragraph 5.1 of Article 169 of the Tax Code of the Russian Federation.

Box 1

In column 1, reflect the name of the goods (work, services, property rights), as well as details of the contract for the execution of which the advance was received.

In the column, enter the name of the goods (description of work performed, services provided, property rights) that is specified in the contract with the buyer. Even if such a name is general (for example, petroleum products, confectionery, stationery, etc.). The general name in the invoice may also be indicated in cases where the application (specification) is issued after payment.

If the contract provides for both the supply of goods and the performance of any work (provision of services), in column 1 indicate both the name of the goods supplied and a description of the work or services.

The buyer can make an advance payment for the shipment of goods (work, services, property rights), which are subject to VAT at different rates - 10 or 18 percent. Then the procedure for filling out column 1 of the invoice will depend on the terms of the agreement with the buyer. If the information contained in the contract allows you to separate the volumes and costs of goods (work, services, property rights) subject to VAT at different tax rates, separate them out in separate positions in the invoice. Otherwise, indicate the general name of the goods (works, services, property rights) and the VAT rate – 18/118.

The contract may provide for different terms for the delivery of goods (works, services, property rights), for example, the supply of goods in batches over several months. When issuing an invoice under such an agreement, the advance amount (partial payment) does not need to be divided into several items.

This procedure for filling out column 1 of invoices upon receipt of advances (partial payment) is recommended in letters of the Ministry of Finance of Russia dated July 26, 2011 No. 03-07-09/22, dated March 6, 2009 No. 03-07-15/39.

An example of execution and registration of invoices upon receipt of an advance payment and upon shipment against the received advance payment

On March 2, Alfa Joint Stock Company received an advance in the amount of 12,900 rubles from the buyer Torgovaya LLC. (payment order dated March 2, 2021 No. 127).

On March 4, the Alpha accountant drew up invoice No. 133 in two copies for the amount of the advance received. He gave one copy to the buyer, and registered the second in the sales book for the first quarter.

On April 23, Alpha shipped a batch of pencils worth 12,900 rubles to the buyer. (cost – 10,932.20 rubles plus VAT – 1967.80 rubles). On the day of shipment, the accountant issued invoice No. 145 and recorded it in the sales book for the second quarter. On the same day, the accountant registered the previously issued invoice for advance payment No. 133 in the purchase book for the second quarter.

Situation: how to prepare an invoice, sales book and purchase book when returning an unpaid advance (partial payment)?

Register the original invoice for the advance payment in the purchase ledger. When returning an unpaid advance, do not fill out a new invoice.

Having received an advance from the buyer, the seller must issue an invoice for the amount received. If the contract is terminated or its terms are changed, the advance payment (partial payment) may be returned to the buyer. In this case, the seller has the right to deduct the amount of VAT that he accrued from the advance payment (partial payment) and transferred to the budget (paragraph 2, clause 5, article 171 of the Tax Code of the Russian Federation). To do this, the selling organization must record all adjustments associated with the return.

Do not issue a new invoice for the amount of the returned advance (letter of the Ministry of Finance of Russia dated July 30, 2010 No. 03-07-11/327). To justify the deduction, the invoice previously issued for the advance received (partial payment) must be recorded in the purchase ledger with the note “Return of advance payment.” In this case, in column 7 of the purchase book, indicate the details of the document confirming the return of the advance payment to the buyer (letter of the Ministry of Finance of Russia dated March 24, 2015 No. 03-07-11/16044). The registration period for such an invoice in the purchase book is also limited to one year (from the date of return of the advance (partial payment)). This follows from the provisions of paragraph 21 of Section II of Appendix 4 to the Decree of the Government of the Russian Federation of December 26, 2011 No. 1137. You can confirm the right to a deduction using documents indicating the termination (change of conditions) of the contract and the return of funds to the buyer (customer).

Sometimes, when the terms of the contract are changed, the amount of the advance payment exceeds the new cost of goods (work, services, property rights). For example, if the buyer refuses part of the goods or purchases goods that are subject to VAT at a lower rate than was provided for in the original agreement. If the supplier does not count the unspent part of the advance payment (partial payment) towards payment for future deliveries, he must return it to the buyer (Article 487 of the Civil Code of the Russian Federation). In this case, you can deduct the amount of VAT determined from the difference between the amount of the advance payment and the contract price of the goods. This conclusion follows from the provisions of paragraph 2 of paragraph 5 of Article 171 of the Tax Code of the Russian Federation.

An example of preparing an invoice and a purchase book when receiving an advance payment for upcoming deliveries. The seller returned part of the advance payment to the buyer after changing the terms of the contract

In the first quarter, Alfa JSC received a 100% prepayment from the buyer under agreement dated February 9, 2021 No. 342 (payment order dated February 9, 2021 No. 1230). Prepayment amount – 35,400 rubles. According to the contract, the seller must supply goods that are subject to VAT at a rate of 18 percent.

In the same tax period, Alpha’s accountant issued an invoice for the amount of the advance, registered it in the sales book and charged VAT payable to the budget in the amount of 5,400 rubles. (RUB 35,400 × 18/118). In April, this amount was transferred to the budget as part of total VAT payments for the first quarter.

In the second quarter, the organizations signed an additional agreement to the original agreement. The document stipulates that the buyer refuses the initial order and purchases goods that are subject to VAT at a rate of 10 percent. The contractual cost of goods that the organization must supply taking into account the additional agreement is 29,700 rubles. (including VAT (10%) - 2700 rubles). In this case, the advance received is partially counted towards payment for goods, and partially returned to the buyer.

The excess of the prepayment over the new contract price of the goods is 5,700 rubles. (RUB 35,400 – RUB 29,700). In April, Alpha transferred this amount to the buyer’s bank account. The amount of VAT paid to the budget on part of the returned advance is 869 rubles. (5700 RUR × 18/118). The seller has the right to present this amount for deduction in the second quarter. To take advantage of the deduction, the accountant registered an invoice for the advance payment in the purchase book in the amount of 5,700 rubles. (including VAT - 869 rubles) with the note “Partial refund of advance payment under agreement dated February 9, 2021 No. 342.”

In the second quarter, Alpha shipped the entire batch of goods provided for in the additional agreement to the buyer. The accountant issued an invoice to the buyer in the amount of RUB 29,700. (including VAT - 2700 rubles) and registered it in the sales book. At the same time, he registered an invoice for the balance of the advance payment in the purchase book in the amount of 29,700 rubles. (RUB 35,400 – RUB 5,700), including VAT – RUB 4,531. (RUB 29,700 × 18/118). “Alpha” has the right to accept this amount for deduction in the second quarter.