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Relations between the parties when leasing property are regulated by Chapter 34 of the Civil Code. Under a lease (property lease) agreement, the lessor (lessor) undertakes to provide the lessee (tenant) with property for a fee for temporary possession and use or for temporary use. This definition is given in Article 606 of the Civil Code. At the same time, the tenant is obliged to maintain the property in good condition, as well as bear the costs of maintaining this property, unless otherwise established by law or the lease agreement (clause 2 of Article 616 of the Civil Code of the Russian Federation). Such expenses, in particular, include utility costs, the amount of which varies from month to month.
At the same time, the amount of rent may be changed by agreement of the parties within the time limits specified in the contract, but, in accordance with paragraph 3 of Article 614 of the Civil Code, no more than once a year. For this reason, in practice, most often, under a lease agreement, the tenant compensates the landlord for a share of the cost of the utilities consumed by him separately from the rent. The landlord directly enters into contracts with organizations that provide utility services. They, in turn, provide the lessor with primary documents for their services on a monthly basis, and also issue invoices. The total cost of utilities is determined by their actual consumption based on bills issued by utility services.
The share of the tenant's expenses compensated by him under the lease agreement can be determined in different ways:
the calculation of the amount of actually consumed utilities is made as a share of the occupied rental space of the premises;
the amount of electricity consumed is determined by the readings of individual meters;
energy consumption is determined based on the power of the partners’ equipment and its operating time.
In any case, the calculation method must be fixed in the lease agreement.
Tax accounting
Electricity costs
The question arises about the procedure for carrying out these services for both the landlord and the tenant in tax and accounting.
In this regard, the opinion of the Ministry of Finance of Russia, published in the recently published letter of the Federal Tax Service of Russia dated April 23, 2007 No. ШТ-6-03/340@, on the procedure for applying value added tax in relation to funds transferred by the tenant to the landlord in order to compensate for the landlord’s expenses is interesting. for payment of utilities, communication services, as well as security and cleaning services for rented premises under agreements according to which these expenses are not included in the cost of rental services.
Thus, the letter of the Ministry of Finance of Russia dated 03.03.2006 No. 03-04-15/52 sets out the position on the application of VAT in relation to the amounts transferred by the tenant to the landlord in order to compensate the landlord’s expenses for paying for electricity. It specifically states that the lessor has no reason to classify operations for the supply (supply) of electricity under these contracts as operations for the sale of goods for VAT tax purposes. That's why these transactions are not subject to VAT taxation, invoices for electricity consumed by the tenant are not issued by the landlord.
The Ministry of Finance of Russia bases this statement on subparagraph 1 of paragraph 1 of Article 146 of the Tax Code, from which it follows that the object of taxation with value added tax is transactions involving the sale of goods (work, services), as well as the transfer of property rights on the territory of the Russian Federation.
In addition, it is noted that according to paragraph 1 of Article 539 of the Civil Code, under an energy supply agreement, the energy supplying organization undertakes to supply energy to the subscriber (consumer) through the connected network, and the subscriber undertakes to pay for the received energy, as well as to comply with the regime of its consumption stipulated by the agreement, to ensure the safe operation of those in its management of energy networks and the serviceability of the devices and equipment used by it related to energy consumption. The subscriber in this case is the person on whose balance sheet the object consuming energy is listed.
The lessor is not an energy supplying organization for the tenant, since he himself receives electricity as a subscriber (Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated April 6, 2000 No. 7349/99).
Based on the foregoing, it is noted that the tenant compensates the landlord’s expenses for paying for electricity and does not receive an invoice for the electricity he consumes, therefore he does not have the right to deduct the VAT amounts transferred by him to the landlord as part of the compensation amounts.
But the landlord also faces difficulties in accounting for VAT on utilities. The Ministry of Finance, referring to the provisions of Article 170 of the Tax Code, notes that VAT amounts charged to the buyer when purchasing goods (work, services) in the case of their use for transactions not subject to VAT are not deductible. Consequently, the lessor is not subject to deduction of VAT on electricity charged to him by the energy supply organization in relation to the electricity consumed by the tenant.
...and all other utility bills
In letter dated March 24, 2007 No. 03-07-15/39, the Ministry of Finance of Russia went even further in its reasoning, extending the above point of view on the application of VAT in relation to funds transferred by the tenant to the landlord in order to compensate the landlord’s expenses for payment not only for electricity, but also for all utilities, communication services, as well as security and cleaning services for leased premises under contracts , according to which these expenses are not included in the cost of rental services.
However, the Federal Tax Service of Russia for the Moscow Region expresses a completely different point of view on this issue in its letter dated 02/03/2005 No. 21-27/28632 (hereinafter referred to as the letter of the Federal Tax Service for the Moscow Region). It is based on the fact that when determining the tax base for VAT, revenue from the sale of goods (work, services) is determined based on all income of the taxpayer associated with payments for the specified goods (work, services)(clause 2 of article 153 of the Tax Code of the Russian Federation). According to subparagraph 2 of paragraph 1 of Article 162 of the Tax Code, the tax base is increased by amounts received for goods (work, services) sold in the form of financial assistance, to replenish special-purpose funds, to increase income, or otherwise related to payment for goods (work, services) sold ).
From this it is concluded that funds received by the landlord from the tenant in the form of compensation for the cost of utility bills (energy supply, heat supply, water supply, etc.), in the part consumed by tenants, are subject to VAT. Consequently, VAT amounts paid by landlords to utility service providers, including the part consumed by tenants, are deductible from the landlord on the basis of Articles 169, 171, 172 of the Tax Code. The tenant can also deduct VAT on specified expenses (compensated to the landlord) only on the basis of invoices.
However, a later letter from the Federal Tax Service of Russia dated December 29, 2005 No. 03-4-03/2299/28@ “On the procedure for applying the 0 percent rate on VAT” states that In this situation, the landlord has no grounds for issuing appropriate invoices, and the tenant has the right to a refund of VAT amounts.
To date, tax authorities refuse to express and comment on their point of view on this issue.
What about expenses?
Also very interesting is the question of including in the expenses taken into account for the purpose of calculating profits the costs of paying the above expenses.
The Ministry of Finance of Russia, in letter dated August 4, 2005 No. 03-03-04/2/41 “On accounting for utility bills when subleasing property,” expressed the following point of view. Referring to subparagraph 10 of paragraph 1 of Article 254 of the Tax Code, he confirmed the tenant’s right to take into account as other expenses expenses associated with the payment of utility bills and (or) communication services related to premises leased. The sublessee may also take into account, as part of other expenses associated with production and sales, the costs of payment of utility and operating expenses incurred by him under the sublease agreement. In this case, the tenant, when receiving rental and utility payments from the subtenant, takes these amounts into account as part of other expenses (clause 4 of Article 250 of the Tax Code of the Russian Federation). Despite the fact that the letter speaks of sublease relations, the opinion reflected in it is also valid for relations arising between the tenant and the landlord.
The opinion of the tax authorities on the issue of calculating profit is set out in the above-mentioned letter from the Federal Tax Service for Moscow Region. It states that if the tenant reimburses the landlord for the costs of maintaining and operating the leased property (utility expenses) provided for in the lease agreement, then these payments are reflected by the lessor as part of non-operating income or income from sales, while for the tenant - as part of non-operating expenses.
If a separate agreement is concluded between the parties for reimbursement of the above expenses, these payments are taken into account by the lessor as part of sales income on the basis of paragraph 2 of Article 249 of the Tax Code. For the lessee, these payments are not recognized as expenses for profit tax purposes.
As for utility bills, these expenses, in accordance with subparagraph 5 of paragraph 1 of Article 254 of the Tax Code, are taken into account as part of the material expenses of the party that has entered into direct contracts with organizations that provide utility services. This is very important, since in this situation the tenant does not have direct contracts with utility services and will not be able to include in expenses the amount of utility bills reimbursed to the landlord.
But in later letters from the Federal Tax Service in Moscow dated July 6, 2005 No. 20-12/47837, as well as dated June 26, 2006 No. 20-12/56637 and dated June 28, 2006 No. 19-11/ 58877 expresses a point of view similar to that of the Ministry of Finance.
These letters indicate that if the lease agreement provides for obligations to pay actually consumed utility costs and expenses for communication services for the tenant, he includes these expenses as part of material and other expenses associated with production and (or) sales. In this case, the condition of validity and documentary confirmation of these expenses with primary documents must be met in accordance with paragraph 1 of Article 252 of the Tax Code. It also provides a list of these documents: the landlord's invoices, compiled on the basis of similar documents issued to the landlord by public utilities, in relation to the actual use of these services by the tenant.
The lessor, in turn, has the right to include as expenses amounts transferred to organizations providing utilities and communication services.
Accounting
All of the above concerns tax accounting. Now let's look at this situation within the framework of accounting using the following example.
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The Zodiac company provides warehouse space for rent, which is under its right of ownership. According to the lease agreement, Zvezda, as a tenant, compensates it for 10 percent of the cost of utilities separately from the rent. The cost of utilities is calculated based on their actual consumption according to invoices issued to the landlord by the relevant utility services, and amounts to RUB 70,800 for July 2007. (including VAT - 10,800 rubles). The share of the Zvezda company is 7,080 rubles. (including VAT - 1,080 rubles). The rent is 17,700 rubles. (including VAT - 2,700 rubles) A document and an invoice were provided to the tenant. Calculations are made monthly. Rent and compensation for utilities for July were transferred to Zodiac on August 9, 2007. Providing space for rent is the main activity of the Zodiac company. For the purpose of calculating profits, firms operate on the accrual basis. It should be noted that in order to avoid disputes with the tax authorities, the landlord in the invoice issued to the tenant indicates not “Payment of utilities”, but “Expenses reimbursed by the tenant.” The following entries will be made in the accounting records of the Zodiac company, the lessor:
At the same time, in the purchase book, the company does not record all amounts for received invoices for utilities, but only the amounts consumed specifically by it, that is, 9,720 rubles.
In tax accounting, the Zodiac company, as was said, can accept rent as income from the main activity with VAT charged on these amounts to the budget. The amount of utility bills compensated by Zvezda under the lease agreement is not accepted by it as income for the purpose of calculating profit. It is not subject to VAT, as it is not a sale. Let us turn to the accounting of the Zvezda company as a lessee. The company's accounting department will make the following entries:
We remind you that the landlord issues an invoice to the tenant for the amount of compensation for utility bills without allocating the amount of VAT, as well as copies of utility bills. The Zodiac company, the tenant, reflects the entire amount of the utility bill as expenses both in tax and accounting, without independently allocating VAT.
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How to solve the problem?
To avoid controversial issues in accounting with the tax office, some companies simplify contractual relations when leasing premises. The amount of the cost of rental payments under the contract includes the amount of compensation reimbursed to the lessor for utilities, communication services, as well as security and cleaning services. In this case, the specified amounts are reflected by the lessor as part of non-operating income or income from sales, subject to VAT. The tenant has the right to take them into account as non-operating expenses, and also to deduct VAT amounts on them based on the invoice issued by the lessor.
There is another way to solve this issue. It is also associated with the appropriate execution of contractual relations between the parties to the lease agreement. Its essence is as follows. It must be clear from the lease agreement concluded by the parties that the lessor, when paying for services to public utilities, acts on his own behalf, but at the expense of the tenant. The content and form of the agreement must correspond to intermediary agreements. In particular, a commission agreement defined in Chapter 51 of the Civil Code of the Russian Federation, or an agency agreement in accordance with Chapter 52 of the Civil Code of the Russian Federation. In this case, the landlord re-issues invoices from utility organizations to the tenant, highlighting VAT amounts.
In order to accept the amounts of “input” VAT for deduction, the landlord, acting as an intermediary between the tenant and utilities, must issue invoices on his behalf for the amounts of utility payments. This explanation was given in the letter of the Ministry of Finance of Russia dated November 14, 2006 No. 03-04-09/20.
In addition, in accordance with the provisions of the Civil Code, the landlord is entitled to remuneration for intermediary services. To avoid additional costs on the part of the tenant, the parties can agree to reduce the rent by the amount of the remuneration.
Based on the documents received, the tenant has the right to deduct the VAT amounts paid to the landlord and also reflect them in the purchase book.
Let's look at this situation using an example.
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Let's return to the condition of the previous example. With the only change that the Zodiac company, in terms of the tenant’s utility costs, is a commission agent and acts before utility organizations on its own behalf, but on behalf of the Zvezda company; upon receipt of invoices from utility services, reissues them to the tenant with the allocation of VAT amounts, and also issues invoices for the specified amounts on its own behalf. In addition, acting as a commission agent in this transaction, he receives a remuneration of 1,770 rubles. (including VAT - 270 rubles). The parties agreed to reduce the monthly rent by this amount. The Zodiac company submits the commission agent's report, a certificate of completion of work and an invoice for its remuneration. The following entries will be made in the accounting records of the Zvezda company:
The amount of VAT in the amount of RUB 1,080 indicated in the invoices received from the landlord for utility costs, as well as the VAT amount on rent in the amount of RUB 2,430. and the amount of VAT on commission in the amount of 270 rubles are reflected in the purchase book of the Zvezda company.
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Above the rent
Readers should pay attention to the latest letter of the Russian Ministry of Finance dated June 19, 2007 No. 03-11-04/2/166.
It addresses the situation when, in accordance with the terms of the lease agreement, the cost of communication services by the tenant is paid in addition to the rent. The Russian Ministry of Finance explains that the lessor must take into account the amount of compensation as income received when determining the object of taxation. And payment for telephone services is included in expenses.
Despite the fact that the letter was sent to landlords who are on a simplified taxation system, the conclusions of the Russian Ministry of Finance are based on the articles of Chapter 25 of the Tax Code “Organizational Income Tax.” Namely, Article 249, which affects the concept of income, and Article 259, which regulates expenses.
Therefore, a taxpayer under the general taxation regime must take it into account.
Moscow "___" ___________ 201_
Open Joint Stock Company "_______________________________" (short name - OJSC "__________"), hereinafter referred to as the "Executor" represented by the General Director _______________, acting on the basis of the Charter, on the one hand, and the limited liability company "____________________________________" (short name - LLC “___________”), hereinafter referred to as the “Consumer”, represented by the General Director _______________, acting on the basis of the Charter, on the other hand, and together referred to as the Parties, have entered into this indemnity agreement (hereinafter referred to as the “Agreement”) as follows:
1. TERMS AND DEFINITIONS
1.1. Premises -and located at the address: Moscow, st. ________________________, house __, building No. __, total area _______ sq.m., on the right ________________, registration record _________________, certificate of series _______ No. ________________ (copy of the certificate - Appendix No. 1).
1.2. Services - maintaining in proper sanitary condition the internal territory of the courtyard of building No. _ adjacent to the Premises, located at the address: Moscow, st. _______________________, d. __, in accordance with the requirements and standards in force in Moscow, as well as ensuring the provision of public services to the Consumer for the supply of electricity, heat, cold and hot water, removal of solid household waste and provision of ventilation of the Consumer’s premises.
1.3. Engineering networks - engineering communications and equipment intended for the provision of Services and located at the address: Moscow, st. _______________________, house __, building No. _ (hereinafter referred to as the “Building”).
1.4. The boundary of division of responsibility is the boundary in the Engineering Networks of the Building that determines the responsibility of the Parties for their proper maintenance in accordance with the requirements and standards in force in Moscow and approved by the Parties in the Act on the Division of Operational Responsibility (Appendix No. 2).
2. SUBJECT OF THE AGREEMENT
2.1. In accordance with this compensation agreement, the Contractor undertakes to provide the Consumer with Services of the established quality, and the Consumer undertakes to pay for the Services provided.
2.2. The indemnity agreement is considered concluded from the moment it is signed by the Parties and is valid for six months.
3. PAYMENT PROCEDURE
3.1. The Consumer, within the month following the paid month, makes payment for the Services to the Contractor, on the basis of an invoice issued by the Contractor in accordance with the costs and calculations given in the calculation attached to the Agreement (Appendix No. 3).
3.2. Payment for Services is made in cashless form to the Contractor's bank account specified in Section 7 of this Agreement within five business days from the date of receipt of the invoice.
3.3. In the event of a change in the cost of the Services, it is justified by the Contractor, attaching documents from organizations that provide it with utility services related to the operation of the Building, on the basis of which such changes occurred, as well as other supporting documents.
3.4. The Consumer's obligation to pay for the Services provided is considered fulfilled from the moment the funds are transferred to the Contractor's bank account.
3.5. In case of delay by the Consumer in paying for the Services and transferring other payments due in accordance with the agreement for reimbursement to the Contractor, the Consumer shall pay the Contractor a penalty in the amount of 0.1% (one tenth of a percent) of the debt amount for each day of delay.
3.6. Additional Services (not specified in this Agreement) provided by the Contractor to the Consumer are paid in accordance with additional agreements.
4. RIGHTS AND OBLIGATIONS OF THE PARTIES
4.1. The performer is obliged:
4.1.1. Ensure the provision of Services of the established quality.
4.1.2. Promptly inform about the implementation of preventive, repair, emergency and urgent work and work that requires additional financial costs.
4.1.3. In accordance with the Act on the Division of Operational Responsibility (Appendix 2 to the Agreement), maintain its Engineering systems in constant working condition in order to provide compensation for Services of the established quality under this agreement.
4.1.4. Monthly, issue an invoice, with the attachment of a calculation of the amount invoiced and the documents on the basis of which this calculation was made, as well as acts and invoices.
4.1.5. If the cost of the Services changes, notify the Consumer about this, attaching supporting documents.
4.1.6. At the request of the Consumer, reconcile payments made under this reimbursement agreement within ten calendar days from the date of receipt of the request.
4.2. The performer has the right:
4.2.1. Send monthly reports of Services provided under the Agreement to the Consumer for signing.
4.2.2. Demand compensation for losses incurred due to the fault of the Consumer, his business partners and visitors, due to their violation of the rules of operation of the Premises, untimely payment of payments provided for in the Agreement or failure to fulfill other obligations under the Agreement.
4.2.3. Make changes to your engineering systems and equipment of the Building, as well as stop the services provided in relation to them, while these actions of the Contractor should not significantly impair the provision of Services to the Consumer.
etc...
The entire sample contract for reimbursement of utility costs is in the attached file.
Some landlords, in order to avoid paying out of pocket for utilities consumed by the tenant, seek to shift these costs to the latter. In practice, there are several ways for a tenant to pay for utilities. Some people want to minimize paperwork and tax risks. Each method has its pros and cons.
The procedure, conditions and terms for paying rent are determined. At the same time, the Civil Code of the Russian Federation does not establish that it, by default, includes all expenses necessary for the maintenance and use of the leased property. The law does not regulate how to provide a tenant with utilities. Therefore, the parties have the right to independently determine how the tenant will pay for these services.
You can choose one of the following schemes:
- include the amount of utility bills in the fixed rent;
- include the amount of utility costs in the rent as a variable;
- re-bille the tenant to reimburse the amount of utility costs;
- enter into an agency agreement with the tenant, under which the landlord purchases utilities for the tenant;
- the tenant enter into direct agreements with utility service providers.
The procedure for tax accounting for utility costs depends on the specific method of payment established by the parties to the lease relationship.
Fixed payment
Including the cost of utilities as part of the rent is the easiest option for the landlord. All rent is included either in sales income (if leasing is the main activity of the lessor) or in non-operating income (if this activity is not the main activity). The tenant does not need to prepare any documents confirming utility costs incurred by the landlord. That's a plus.
The sale of services for the provision of premises for rent is subject to taxation (). The tax base is the entire amount of rent ().
If the rent is expressed in a fixed amount, there are no problems with deducting VAT from the cost of consumed utilities. The tenant pays only for the rental of the premises, and it is assumed that the landlord has already taken into account his costs for paying for such services (electricity, heat, water, etc.) in the rental price. And the landlord can accept for deduction the amount of tax presented by housing and communal services organizations in full (letter of the Federal Tax Service of Russia dated 02/04/2010 No. ШС-22-3/86@). This is a definite plus.
The disadvantage of the option with a fixed rental payment is the risk in terms of the profitability of the transaction. Firstly, tariffs for housing and communal services are rising. Secondly, by paying a fixed amount, the tenant will not bother himself with saving resources. In addition, it is impossible to know in advance how many will be needed.
The lease agreement states that the tenant pays a monthly rental payment of RUB 500,000. (excluding VAT). This fixed amount includes the cost of utilities consumed by the tenant. According to calculations, it amounts to 190,000 rubles per month. (excluding VAT). The actual cost of utilities consumed by the tenant in September was 200,000 rubles. (excluding VAT).
As a result, this month the landlord will lose 10,000 rubles in income from renting out the property. (200,000 - 190,000).
Variable rent
The parties may provide for the form of rent, which consists of a fixed and variable part. The amount of utilities consumed by the tenant, depending on their price and actual quantity, constitutes the variable part (). This amount is calculated on the basis of documents from utility service providers (invoices, acts) provided to the lessor:
- or in proportion to the space occupied by the tenant;
- or depending on the volume of services consumed by the tenant, confirmed by meter readings, and utility tariffs of suppliers.
To pay, the lessor issues an invoice to the lessee with supporting documents and calculation attached.
With this method of payment, the lessor has the right to take into account and deduct “input” VAT on services provided by public utilities (letter of the Federal Tax Service of Russia dated 02/04/2010 No. ШС-22-3/86@). That's a plus. The main thing is that utilities should be billed directly to the landlord and VAT should be included as a separate line (resolutions of the Federal Antimonopoly Service of the North Caucasus District dated December 21, 2009 No. A63-8994/2004-C4-9, dated June 11, 2009 No. A53-18515/2008 ‑С5‑27).
Now about the cons
Minus the first one. VAT will also need to be charged on the variable part of the rent, since the provision of services for the provision of property for rent is subject to VAT in the general manner (subclause 1, clause 1, article 146 of the Tax Code of the Russian Federation). The lessor issues an invoice for the entire amount of the rent, regardless of division into fixed and variable parts (). The landlord is not obliged to highlight in a separate line the amounts in the invoice that relate to the variable part, that is, utility payments (letter of the Federal Tax Service of Russia dated 04.02.2010 No. ШС-22-3/86@).
Another disadvantage is the overestimation of income amounts for purposes. With regard to income tax, sales revenue is determined based on all receipts associated with payments for services sold. Therefore, the lessor takes into account the amount of rent, including its variable part, in tax income ().
However, this minus is compensated by the fact that it is allowed to recognize the cost of utilities themselves as expenses (letter of the Federal Tax Service of Russia for Moscow dated June 28, 2006 No. 19-11/58877). Utility payments are taken into account as part of material costs for the party that entered into direct contracts with suppliers ().
The cost of utilities consumed by the tenant in September amounted to 236,000 rubles, including VAT of 36,000 rubles. It is the variable part of the rent.
The amount of VAT that the lessor must pay on this part is RUB 36,000. He will deduct the same amount. RUB 200,000 will be taken into account in income tax income. The same amount is in expenses.
Compensation in excess of rent
The lease agreement sets a fixed rent. Additionally, the tenant reimburses the landlord for utility costs based on his actual costs. Compensation amounts are not included in the rent, but are paid by the tenant to the landlord in excess of it. The basis for reimbursement of expenses by the tenant is the lessor's invoice, to which supporting documents and calculations of the cost of expenses subject to reimbursement are attached.
In fact, the amount of compensation for the cost of utilities by the tenant is a transit payment, which the landlord transfers in full to the utility services as payment for the services they provide. Such payments are received from the tenant to the landlord as compensation for expenses incurred. This means that they do not lead to an increase in the economic benefits of the lessor, and do not participate in profit taxation purposes.
There are also court decisions taken taking into account this position. If the agreement provides for the payment of utility costs in addition to the rent, then the amounts of compensation received from the tenant are not the landlord’s income, since they compensate for the costs of maintaining and using the leased premises (Resolution of the Federal Antimonopoly Service of the North Caucasus District dated February 11, 2008 No. F08‑8206 / 07‑3204A, East Siberian District dated 03/21/2007 No. A74‑3165/ 06‑F02‑1481/07).
Please note
Invoices received by the landlord from utility service providers should be registered in the purchase book without taking into account the amount of tax on utility bills consumed by the tenant (letter of the Ministry of Finance of Russia dated September 6, 2005 No. 07-05-06/234).
The amounts of compensation received are not income of the organization for accounting purposes (approved by order of the Ministry of Finance of Russia dated May 6, 1999 No. 32n).
From a VAT point of view, transactions involving the transfer of electricity, water, and gas from the lessor to the lessee are not considered transactions for the sale of goods. The lessor cannot act as a supplier of these goods for the lessee, since he himself acts as a buyer (subscriber). The lessor does not have an object of VAT taxation (letters of the Ministry of Finance of Russia dated December 31, 2008 No. 03-07-11/392, dated December 26, 2008 No. 03-07-05/51, Federal Tax Service of Russia dated February 4, 2010 No. ShS-22-3/ 86@, Federal Tax Service of Russia for Moscow dated 06/08/2009 No. 16‑15/58069).
This position is also supported by some courts, which believe that in this case there is no implementation (the landlord does not provide utilities). But they draw another conclusion: the landlord should not issue an invoice to the tenant for the amount of utilities consumed by him (Determination of the Supreme Arbitration Court of the Russian Federation dated January 29, 2008 No. 18186/07).
In addition, the landlord does not have the right to re-invoice the tenant, since in this case he is not an intermediary between the tenant and the service provider. Even if he does this and indicates himself as a seller, he still will not have an object of VAT taxation (resolution of the Federal Antimonopoly Service of the North-Western District dated 09/05/2005 No. A56-30790/2004, FAS Volga District dated 04/12/2007 No. A55 -14832/06).
The deduction of “input” VAT charged to the landlord by utility service providers is also a difficult question.
The transfer of electrical and thermal energy, water, and gas by the lessor to the lessee is not subject to VAT. This means that the amount of “input” VAT presented by utilities in relation to services consumed by the tenant is not deductible from the landlord.
The landlord must include this amount of tax in the cost of utilities consumed by the tenant () (letter of the Ministry of Finance of Russia dated 03.03.2006 No. 03-04-15/52, Federal Tax Service of Russia for Moscow dated 21.05.2008 No. 19-11/48675, dated July 16, 2007 No. 19-11/067415; resolution of the Federal Antimonopoly Service of the North-Western District dated September 12, 2006 No. A52-353/2006/2).
And one more conclusion. Invoices received by the landlord from utility service providers should be registered in the purchase book without taking into account the amount of tax on utility bills consumed by the tenant (letter of the Ministry of Finance of Russia dated September 6, 2005 No. 07-05-06/234).
The cost of utilities according to utility bills in September amounted to 460,200 rubles, including VAT of 70,200 rubles. The lessor transferred this amount to suppliers. Of this amount, 224,200 rubles. (including VAT RUB 34,200) falls on the share of the tenant. The landlord issued an invoice to him for reimbursement of utility costs in the amount of 224,200 rubles. (excluding VAT). The tenant transferred this amount to the landlord's bank account.
The following entries have been made in the lessor's accounting:
DEBIT 60 CREDIT 51
- 460,200 rub. - utilities paid for September;
DEBIT 20 CREDIT 60
- 200,000 rub. - own expenses for utilities in September are taken into account;
DEBIT 19 CREDIT 60
- 36,000 rub. - partially accepted for VAT offset on own utility costs;
DEBIT 76 CREDIT 60
- 224,200 rub. - utilities were rebilled to the tenant (including VAT);
DEBIT 51 CREDIT 76
- 224,200 rub. - payment received from the tenant.
Mediation agreement
The parties may include in the lease agreement a provision for the provision of intermediary services (). In this case, the landlord will act as an intermediary, that is, purchase utilities for the tenant, and the latter will be obliged to compensate the former for the cost of such services.
Mediation agreements are paid, therefore the parties to the agreement must agree on the cost of remuneration (Articles 991, 1006 of the Civil Code of the Russian Federation).
When concluding an intermediary agreement, the lessor's income will be only the amount of this remuneration, and not the entire cost of utilities paid by the lessor as an intermediary to the utility service provider.
With this option there are more pros than cons.
First, the landlord takes into account income only in the amount of the agent's fee for the services provided, and not the entire cost of utilities paid by the landlord as an intermediary to the utility provider.
This is confirmed by the Russian Ministry of Finance. If the activities of the management organization, based on contractual obligations, are intermediary activities for the purchase of utilities, then the income of this organization will be commission, agency or other similar remuneration (letter of the Ministry of Finance of Russia dated January 27, 2012 No. 03-11-06/2/9) .
The second advantage for the landlord is that there is no need to charge VAT when transferring utilities. The transfer of electricity, water, and gas to the lessee is not recognized by the lessor as a sale subject to VAT. In this case, he himself does not implement anything, but acts as an agent. Consequently, the lessor is not obliged to calculate and pay VAT, since goods purchased by the agent for the principal are the property of the principal (Clause 1 of Article 996, Article 1011 of the Civil Code of the Russian Federation).
There is also a small minus. It is necessary to charge VAT on agency fees. Taxpayers, when carrying out business activities in the interests of another person on the basis of intermediary agreements, determine the tax base as the amount of income they received in the form of remuneration in the performance of any of these agreements (). Therefore, the tenant needs to charge VAT on the cost of remuneration (letter of the Federal Tax Service of Russia dated 02/04/2010 No. ШС-22-3/86@).
The cost of utilities in September amounted to 236,000 rubles, including VAT of 36,000 rubles. The amount of remuneration under the intermediary agreement is 1% of the cost of consumed utilities, i.e. 2360 rubles, including VAT 360 rubles.
The amount of VAT that the landlord must pay to the budget is 360 rubles.
Income tax income will include the amount of 2000 rubles.
In practice, the tenant’s independent conclusion of contracts with utility services is extremely rare. Although this option is convenient for the landlord, it is not beneficial for utility companies, since it involves a huge amount of paperwork. One office center can have hundreds of tenants, and it turns out that contracts, invoices, acts, etc. need to be drawn up with everyone.
Boris Swain, for the magazine "Practical Accounting"
Practical accounting
Utilities become more expensive every year. For families with average income, these are minor changes in the budget. Low-income citizens, in turn, find it difficult to cope with payments. However, the state provides subsidies for housing and communal services.
What is it?
According to the legislation of the Russian Federation, the maximum payment for housing and communal services should not exceed 22 percent of the family income. Tariffs increase annually, in accordance with the region's cost of living. If the family is low-income, the rent amount should be reduced in accordance with Government Decree No. 541.
A certain category of citizens whose income is equal to or below the established annual subsistence level has the right to receive subsidies. In 2017, this figure is 9,776 rubles per person.
Compensation is social financial support for low-income citizens. Involves the payment of funds to pay for the apartment and utilities. Compensation for expenses is provided in full and in part to those who do not have debts for housing and communal services. In order to receive monthly benefits, you must pay utility bills no later than the 25th of each month, and also submit meter readings to service providers. It is especially important to provide this information to disabled veterans, for whom compensation is paid in accordance with the consumption rate.
Subsidies involve a commensurate reduction in rent in accordance with the cost of living of the region. In order to receive benefits, you must provide a certificate of income to the Housing Office. You are also required to report any changes, such as:
- moving to a new place of residence;
- basis for receiving another type of benefit;
- appointment of a new house manager;
- change of utility service provider.
Heroes of the USSR are exempt from paying utility bills.
Who is eligible to receive?
The legislation of the Russian Federation provides subsidies for utility bills to the following categories of citizens:
- large families (with 3 or more minor children);
- participants of the Second World War;
- veterans, military and government employees;
- honorary donors;
- participants in the elimination of the Chernobyl accident;
- single mothers;
- children - orphans;
- disabled people - pensioners.
In addition, regardless of place of residence, benefits are provided to owners, tenants and users of public housing. However, the law prohibits the provision of subsidies to utility debtors, as well as to foreigners.
The main purpose of the benefit is to help low-income and socially vulnerable families. Citizens have the right to receive subsidies from the state if they do not work and are the owners of only one residential property. Basically, discounts are provided for gas supply. Support is provided by regional self-government bodies, and the amount of the benefit is assigned individually for each case. For pensioners, discounts are provided for the following housing and communal services:
- water supply, drainage, electricity;
- maintenance and repair of the apartment;
- rental of premises.
Disabled people of groups I and II A 50% discount is provided on electricity and telephone bills. Pensioners over 80 years of age, as well as families of disabled children, are exempt from paying for major repairs of an apartment building.
Compensation for housing and communal services is provided:
- large families whose income is below the subsistence level;
- families of fallen conscripts;
- single pensioners;
- disabled from birth;
- workers of medical institutions and teachers (in villages and villages).
Amount of compensation
State support for low-income families and socially vulnerable citizens of the Russian Federation is provided on the basis of confirmed status. This could be a certificate or a certificate, a military ID. Compensation rates are established by law and may vary depending on the individual case. The standard provides the following dimensions:
- 30 percent refund;
- compensation of half of the settlement amount;
- full coverage of utility costs.
Low-income large families receive a refund of 30 percent of the paid rent if there is no debt. The list of services includes water supply, gas, electricity and heating. 50 percent of the calculation is reimbursed to disabled pensioners or other vulnerable categories of citizens to pay for all utilities. Heroes of the Second World War, the USSR, as well as honorary donors of the Moscow Region can count on full compensation.
Benefits from the state are provided to veterans and disabled pensioners, taking into account the area of the apartment, the number of registered residents, as well as the average monthly family income. 50 percent of subsidies are provided for heating, electricity, drainage and waste removal. In addition, the following is taken into account:
- renovation of living space and maintenance of the apartment;
- ownership or rental.
If living conditions are unsatisfactory, a 50 percent discount on all types of utilities is provided.
How to get it?
In order to receive compensation for housing and communal services, you must pay all debts and then provide a package of documents with an application for government financial support. Cash refunds are provided to citizens at their place of residence and registration. The settlement amounts on the receipt must not exceed the consumption standard.
Compensation for utilities is provided on the basis of an income certificate. You need to contact local authorities or the territorial MFC. The decision to assign or refuse compensation is approved by government agencies within 10 days. If the request is granted, the citizen receives a monthly written notification with the following information:
- amount of compensation;
- list of utilities for which subsidies are provided;
- recalculation;
- receipts for payment of housing and communal services.
The grounds for refusal may be an incomplete list of required documents, as well as:
- loss of the right to compensation;
- the amount of compensation exceeds the actual payment for consumed housing and communal services;
- lack of registration at the citizen’s place of residence.
Receiving benefits and subsidies provided to citizens on the basis statements on the same principle.
Required documents
To receive compensation for utility costs, you must provide the following documents:
- written statement;
- passport of a citizen of the Russian Federation;
- registration certificate;
- House Book;
- certificate of ownership of the apartment;
- receipts for payment of housing and communal services.
In addition, depending on the case, a certificate of income, a military ID, a medical commission’s conclusion on assignment of a disability group, a pension certificate, an extract from the registry office on the number of children, and more are provided. The list of additional documents for receiving compensation also includes:
- a certificate from the Housing Office about the number of registered residents, the size of the apartment, as well as the state of repairs;
- certificate of temporary right to receive compensation.
Statement
Submission procedure
Monthly cash compensation for utility bills credited until the 10th. The citizen receives a written notification. Subsidies are valid for 6 months from the date of application. In the future, if necessary, the procedure should be repeated.
Funds are credited to the personal account of the apartment owner. Compensation is not taxed and can be spent on paying for any type of utility service.
When does the provision of compensation for utility services stop?
Subsidy payments are terminated on the following grounds:
- loss of the right to compensation for utility bills;
- death of a citizen;
- moving to another area.
In addition, some subsidies are issued for six months, for example, compensation for heating. The transfer of money stops from the moment of the last payment of the receipt.