VAT refund process for legal entities in Russia (refund) in 2021

Legal VAT refund to a person is the difference between the organization’s lost profit and the value added tax actually paid.

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To return legal to a person who has overpaid value added tax there is an established procedure approved by legislation.

As part of this procedure, the necessary documents are prepared, collected and submitted to the tax service.

In what cases can VAT be refunded from the budget?

VAT payable is the difference between input and output tax. That is, between the VAT that you charged on your goods and services, and the VAT that you yourself paid to your suppliers. You can read more about the VAT mechanism here.

In most cases, the accrued tax will be greater than the input tax. But in some cases the opposite may be true.

1. You bought an expensive fixed asset or a large batch of goods. In this case, you can immediately deduct VAT from the entire purchase amount. And if there were few sales this quarter, then the accrued VAT will be less than the deductions.
2. You work at preferential rates of 0% or 10%. However, if suppliers charge you input VAT at the usual rate of 20%, the deductions may be higher.

In such situations, you will pay more VAT to suppliers than you receive from customers. This means that you can return from the budget the difference between incoming and accrued VAT.

Can they refuse?

You can be denied a refund in several cases:

1. Presence of errors in reporting papers and other documents.
2. Absence of one or more basic documents for the goods, absence of a declaration.
3. Errors made during registration.
4. Responsibility of the counterparty who has not paid taxes.

In addition, there are additional reasons for refusing a tax refund:

1. The goods were purchased not with proceeds from a legal entity, but with money transferred under preferential programs from the federal or state budget. In this case, VAT must be restored, after which it will be sent to the source of financing, regardless of whether the purchased goods are used in activities that are subject to VAT.
2. The goods were not sold in a specific reporting period.
3. The work that was carried out to improve the characteristics of the leased property was capitalized.

Most often, those organizations that keep separate records for transactions that may not be subject to VAT in full are faced with refusal.

The law protects the rights of legal entities and provides VAT refunds subject to certain conditions.

In this case, the company must pass all checks, and the manager is obliged to provide reporting documentation, submit a timely declaration and correctly indicate the total amount of VAT based on the results of activities.

What to do to return VAT

First of all, fill out the declaration and submit it to the Federal Tax Service.

If the deductions are greater than the accruals, then submit an application for VAT refund along with the declaration. You can send the application later, but then you will receive the money later. The return application form can be downloaded from the Federal Tax Service portal.

Before tax authorities make a decision on a refund, they will conduct a desk audit of the declaration. And be prepared for the fact that your tax return will be checked especially carefully.

A desk audit of a VAT return generally lasts up to 2 months, but inspectors have the right to extend the period up to 3 months (Clause 2 of Article 88 of the Tax Code of the Russian Federation).

If at this time you submit an updated declaration, the deadline will begin again. It is necessary to submit an amendment only if it does not contain the necessary information, or errors have led to an underestimation of the tax amount. Therefore, for minor violations, for example, a typo in the invoice number, it is better to simply provide an explanation.

Typically, desk inspections are carried out at the inspection premises, but if the report states the amount to be reimbursed, or inconsistencies are identified during the inspection, the inspectors have the right to inspect your premises (Clause 1 of Article 92 of the Tax Code of the Russian Federation).

Most likely, during the inspection, inspectors will have questions and will ask you for clarification and additional documents. All exchange of information when checking a VAT return must be carried out electronically. If you send a response to the tax authorities on paper, it will be considered unsubmitted.

Upon receipt of a request from the Federal Tax Service, send a receipt confirming the receipt of documents within 6 days, and respond to the request itself within 5 days.

If you violate the deadlines, there will be fines:

• if you miss the deadline for sending the receipt by more than 10 days, tax authorities may block your accounts (clause 1.1, clause 3, article 76 of the Tax Code of the Russian Federation);
• If you violate the deadline for responding to a request, you will be fined 5,000 rubles (Clause 1 of Article 129.1 of the Tax Code of the Russian Federation).

And most importantly: if the tax authorities do not receive explanations that suit them, they will refuse a VAT refund.

During a desk audit, you may be called to the so-called “tax base legalization commission.” The general goal of such events is to convince the taxpayer to increase payments to the budget, and in our case, to refuse VAT refunds.

Remember that if the declaration is completed without errors and all supporting documents are in order, the tax authorities have no legal grounds for refusing a VAT refund. But the manager or employee of the company who goes to the commission must have psychological stability to withstand the pressure.

If you do not want unnecessary attention from tax authorities, you can change the declaration so that the amount to be reimbursed is not included. To do this, transfer a large deduction to the following periods or break it into parts. You have the right to use the deduction within three years after the registration of material assets or services (clause 1.1 of Article 172 of the Tax Code of the Russian Federation).

But it is not always possible to transfer or split deductions. If you bought a fixed asset or an intangible asset, then the deduction must be declared in full in the period when you registered the object. You also cannot carry forward deductions for advances issued or for amounts paid as a withholding agent. The Ministry of Finance of the Russian Federation points to this in its letters dated 04/09/2015 No. 03-07-11/20290 and 03-07-11/20293.

When will VAT be refunded?

If tax officials find no violations, the desk audit will last no more than 2 months. Then, within 7 days, the head of the Federal Tax Service must make a decision on tax refund. The law gives the Treasury another 5 days to transfer funds.

To receive money within these deadlines, you must submit a VAT refund application in advance, preferably along with your declaration. If on the day the decision on reimbursement is made, the tax authorities do not have such an application, then you will receive the money a month after you submit the application (clause 11.1 of Article 176 of the Tax Code of the Russian Federation).

If you have arrears on VAT or other federal taxes, the inspectors will first pay off this debt. You will receive the amount remaining after closing the debt to your current account (clause 4 of Article 176 of the Tax Code of the Russian Federation).

If inspectors find violations when filling out the declaration, the VAT refund period will be more than doubled. The table below shows the maximum periods provided for by the Tax Code of the Russian Federation. Theoretically, each stage can go faster. But usually, when returning funds from the budget, tax authorities fully use all the time limits established by law.

When will VAT be refunded?

If you find violations and the amount to be reimbursed changes, do not forget to write a new application for a refund. It is convenient to submit it along with objections to the act.

List of required documents

To receive a deduction, you need to prepare all documents and bring them to the tax office. A certain package of documents:

1. Application according to the established form.
2. Tax return.
3. Letter requesting VAT refund.
4. Invoices.
5. Payment certificates.
6. Extracts from books of purchases and sales.

After receiving the necessary documents, tax officers will send desk audits to the company, after which there should be no discrepancies.

In another situation, the process of returning the due VAT may continue for a long period of time.

If the company is confident in the legality of its work and the actions of its suppliers and it has all the payment and other necessary documents, you can apply for compensation without any problems.

Documents for reimbursement for export and domestic market are almost identical. But for export you also need to provide customs marks and declarations.

Features of VAT refund for exporters

For many exporters, the VAT refund procedure will be even more complicated. We are talking about those who sell raw materials abroad, the list of which was approved by Government Decree No. 466 dated April 18, 2018. These are oil and oil products, metals, wood, etc.

Exporters of primary goods cannot declare input tax based on invoices alone, like all other VAT payers. They must attach to the VAT return documents confirming exports: contracts, customs declarations, invoices, etc. (Article 165 of the Tax Code of the Russian Federation). Therefore, for them, the VAT refund period will increase by the time required to collect all the documents.

Who and how can return VAT in an accelerated manner?

Some businessmen can return VAT from the budget much faster than described above (Article 176.1 of the Tax Code of the Russian Federation). The following taxpayers are eligible for an accelerated refund.

1. Large taxpayer organizations. We are talking about legal entities that over the previous three years have paid income tax, excise taxes, VAT and mineral extraction tax for a total amount of at least 2 billion rubles.
2. Residents of the territory of rapid socio-economic development or the free port of Vladivostok. The management company of the territory or port must vouch for the businessman.
3. Any taxpayers who have provided a surety or bank guarantee, if the legal requirements for a surety or guarantor are met. The guarantor, in particular, must transfer to the budget at least 2 billion in taxes over the last three years, and the guarantor bank must have an authorized capital of at least 1 billion rubles.

You can return VAT from the budget in an accelerated manner within 15 days, that is, you do not need to wait for the results of a desk audit. The process looks like this.

1. Within five days after filing the return, the taxpayer submits an application for an accelerated refund.
2. Tax officials make a decision within five days.
3. Within five days, the treasury transfers the money.

But the declaration will still be checked. If it turns out that the tax was reimbursed unreasonably, it will have to be returned to the budget. During the use of budget funds, you will need to pay penalties at double the refinancing rate of the Central Bank of the Russian Federation (clause 17 of Article 176.1 of the Tax Code of the Russian Federation).

Results

The question of refunding VAT from the budget for a tax period arises when the amount of deductions exceeds the amount of tax accrued for payment, and arises only for VAT payers, since non-payers do not have the opportunity to apply deductions. The reimbursement procedure consists of several stages - from filing a declaration to receiving tax from the budget.

Sources:

• Tax Code of the Russian Federation
• Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation dated July 30, 2013 N 57

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What to do if tax authorities violate refund deadlines

If you did everything as it should, but still don’t have the money, contact the inspector who conducted the inspection. It is possible that there was a technical error and the money will arrive soon.

If you were unable to resolve the issue with the inspector, send a letter to the head of the Federal Tax Service. Well, if this doesn’t help, write to a higher tax authority. If you are unable to reach an agreement with the tax authorities at all levels, your only option is to go to court.

If the VAT refund deadline was violated unreasonably, you have the right to receive not only the principal amount, but also interest during the delay, based on the Central Bank refinancing rate (clause 10 of Article 176 of the Tax Code of the Russian Federation).

Essence of the question

Almost any citizen, entrepreneur or organization, purchasing goods, work or services, becomes a payer of a special type of fiscal burden - value added tax.
This tax fee is a kind of markup on the actual cost of the purchased product or service. Of course, a number of goods are exempt from taxation, but their number is insignificant. Despite the fact that the value added tax burden falls on everyone, only legal entities and individual entrepreneurs using the general taxation system (OSNO) are recognized as taxpayers of this fee. Also, organizations and individual entrepreneurs under special regimes (STS, UTII, Unified Agricultural Tax, PNS) can be recognized as a taxpayer of value added tax when performing a certain type of transaction.

What does taxpayer status give? This condition gives the economic entity not only the obligations to calculate and pay money to the budget, but also gives the right to a VAT refund upon purchase.