Conducting tax audit in respect to legal entity, special attention is paid to compliance with legal requirements for accountancy of provided services. Due to active development of information technology, business entities provide customers with online services which have several advantages with increasing frequency. In this regard, question of the correct accounting of electronic services in order to avoid violations of tax legislation becomes very important.
Electronic services are considered as support that is provided through information and telecommunication network, including via the Internet. It is worth noting that costs of online support which are subject of accountancy, should be economically viable. It means that it is necessary to justify relationship between support received and production activities aimed at making a profit. In addition, they must be confirmed by relevant documents.
So, if main activity of the company is production of cars, then subscribing to an electronic magazine devoted to culinary recipes will not be considered as a production necessity, and therefore, costs will not be economically feasible. This will entail a number of unpleasant consequences: for example, the inability to reflect such expenses to reduce taxable profits.
Accounting of electronic services requires that they should be confirmed by appropriate documents. Confirming document may be an act presented by supplier to the consumer. Form of the act is free, legislation does not provide a special form, but documents should contain information about the service provided and its cost. It is important that act contains relevant signatures of the parties indicating names and initials, as well as the date.
Company’s expenses for payment of online services related to daily activities are recognized as expenses for ordinary types of work. Such costs are considered as managerial and are recorded in the account “General expenses”. If the company is engaged in trade, and the costs are associated with the sale of products, goods, works, they are recognized as selling expenses, and they should be considered as “Sales expenses”.
For purposes of profits taxation, payment for electronic services is included into other expenses associated with production and sales. Moreover, these costs are accepted within the tariffs approved by the Tax Code.
Big difficulties arise in proving of economic feasibility and justification of the costs for online services. This is because not every service can be associated with its necessity for a legal entity. It should also be taken into account, that online service should be provided specifically to the legal entity, and not personally to one of the company’s employees. In order to avoid disputes about who the service was provided to, employee is obliged to act on behalf of the company based on the issued power of attorney issued.
Foreign companies’ activity
Foreign legal entities can also provide services in electronic form in the Russian Federation. According to the law, a foreign organization must be registered by tax authorities. In this case, the tax return shall be submitted by foreign companies to the tax authority in electronic form through the personal account of the taxpayer.
Foreign companies pay value added taxes only if the duty to pay the tax is not assigned to the agent. Tax agents may be Russian organizations, individual entrepreneurs or units of foreign organizations located in the Russian Federation. This is a common way to resolve the issue of making taxes by foreign enterprises, since the agents themselves are taxpayers, which greatly simplifies the documentation.
Thus, accounting of electronic services is an integral obligation of legal entity. Its observance will allow to avoid violation of the of Russian tax law. However, from enterprises and their representatives it is necessary to comply with several requirements, the most significant of them are validity and documentary evidence.
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