Situations when the founders decide to stop the activities of the company are quite common. It is clear that an organization that has become unnecessary can be liquidated. Often, such firms are simply “abandoned”. But you can try to sell the company and at the same time make a profit. We will talk about what tax consequences may arise in this connection.
It is possible to sell an organization through which, for one reason or another, it is no longer planned to conduct business, not only as a set of property - computers, tables, chairs, rooms, etc., but also as a legal entity. When selling property, problems with taxes, as a rule, do not arise. But when selling a company as a subject of economic activity, many questions arise. Therefore, today we will focus on this particular option of parting with the organization.
But before moving on to taxes, let's say that legally such a sale of a company is formalized by transferring authority to control a legal entity. And for this it is necessary to transfer (sell) to the new owner either a participatory interest (if it is an LLC) or shares (if it is a joint-stock company - it does not matter whether it is open or closed). Therefore, when we talk about taxes, we will consider the sale of interests or shares.
If the owner is a citizen
So, let's begin. What taxes will you have to pay when selling shares or shares in a company? It is clear that the answer to this question depends on who is the legal owner of the shares or shares. Very often, such an owner is an individual founder.
In this case, when selling shares or stocks, an individual may have obligations with regard to personal income tax. True, the tax rules for this situation are very liberal. So, if the shares or shares have been owned by the taxpayer for more than five years, then the entire amount received from the sale is exempt from personal income tax. The reason is paragraph 17.2 of Article 217 of the Tax Code of the Russian Federation. If this condition is not met, then the taxation procedure depends on the legal form of the organization being sold.
So, if an LLC is sold and the taxpayer has owned shares for more than three years (but less than five), then he is entitled to apply a tax deduction in the amount of 250 thousand rubles (subparagraph 1, paragraph 1, article 220 of the Tax Code of the Russian Federation). When selling shares in LLC, another approach is also possible - reducing the amount received from the sale of shares by the actually incurred and documented expenses associated with the acquisition of these shares (paragraph 2, subparagraph 1, paragraph 1, article 220 of the Tax Code of the Russian Federation). This option can be chosen by both those who owned shares for less than three years, and those who owned them for more than a specified period. That is, a decrease in income from expenses can be an alternative to deduction.
In the case of sales of AO shares, the taxation procedure is different. Deductions are not provided in this situation (Article 214.1, paragraph 2, subparagraph 1, paragraph 1, paragraph 2 of paragraph 2 of article 220 of the Tax Code of the Russian Federation, letter of the Ministry of Finance of Russia dated 06.08.10 No. 03-04-05 / 2-431 , dated 09.03.10 No. 03-04-06 / 2-27). And the tax base is defined as the difference between income and expenses. Moreover, an approximate list of such expenses is given in paragraph 10 of Article 214.1 of the Tax Code.
Expenses, of course, must be documented (this, incidentally, applies to the case of a decrease in expenses on income from the sale of shares in LLC). Therefore, in order to be able to reduce the amount of tax, you need to have documents on the payment of shares or shares when creating a legal entity, or when they are purchased. If during the activities of the company the participants (shareholders) incurred additional costs in the form of contributions, then these documents also need to be prepared in advance. After all, after the transfer of control over the organization, the seller will no longer have access to its accounting documents.
The income received is taxed at a general personal income tax rate of 13%.
If the owner is a legal entity
If the owners of shares (stocks) are legal entities, then a transaction for the sale of shares (stocks) may entail consequences for income tax and VAT. Let's start with the last one.
The legal form of the sold legal entity does not affect the tax consequences in terms of VAT. So, when selling a joint-stock company, there will be no VAT, since the sale of securities (in this case - shares) is not subject to VAT. There is no need to pay VAT and the sale of shares in the authorized capital (subparagraph 12 paragraph 2 of article 149 of the Tax Code).
It would seem that everything is simple. But in the case of the sale of the organization, the tax authorities interpret this norm in a peculiar way. In their opinion, in this case, it is not so much the sale of shares or shares as the sale of property belonging to a legal entity. The tax authorities see this as a scheme for avoiding taxation (see, for example, the resolution of the Federal Antimonopoly Service of the Ural District dated 05.06.2010 No. F09-3163 / 10-C2). Therefore, if the shares or shares are sold to a friendly company and there are signs of interdependence that inspectors can identify and prove, the risks of such a transaction are significantly increased (this was exactly the case in the court decision mentioned above, where the inspectors were able to prove the interdependence and re-qualify the transaction by accruing taxes).
Let's move on to income tax. According to subparagraph 2 of paragraph 1 of Article 268 of the Tax Code of the Russian Federation, when selling shares in a legal entity, income tax must be paid on the difference between the income received from such a sale and the costs of the acquisition and sale of these shares. If the difference is negative, then such a loss can also be taken into account in taxation.
Incomes from the sale of securities are taxed in a similar way - the tax is charged on the difference between income and expenses from the operation (unless, of course, in the tax period there were other operations with securities that are not traded in the organized market). In this case, unlike the sale of shares, in case of loss from the sale of shares, it is not accounted for in the general base, but separately - only the tax base calculated on operations with securities can be reduced by the amount of loss (paragraph 10 of article 280 of the Tax Code of the Russian Federation )
Note that from 2011 a norm has been in force that de facto exempts from income tax the income received from the sale of shares in the authorized capital or shares if they belonged to the seller organization for five years or more (Article 284.2 of the Tax Code of the Russian Federation). In this case, a zero rate applies. That is, legislators have used the same mechanism for organizations as for individuals. But hurry with the application of this norm is not worth it. The fact is that, in accordance with paragraph 7 of Article 5 of Federal Law dated 28.12.10 No. 395-ФЗ, the provisions of Article 284.2 of the Tax Code of the Russian Federation apply to securities (shares in the authorized capital) acquired by taxpayers after January 1, 2011. In other words, it will be possible to use the zero rate no earlier than January 1, 2016, and then only for those shares and shares that were acquired in 2011.
What was before
Sales tax is an indirect tax paid by sellers of goods and services. The term "indirect" means that the tax is included in the sale price, so in the end the burden falls on the shoulders of buyers. However, some types of goods or services may be exempted from taxation by law.
In modern Russian history, such a tax was introduced twice. The first time back in the USSR in 1991. The rate then was 5%. But with the collapse of the USSR and the introduction of new regulations, this tax has sunk into oblivion since January 1992.
However, he was again remembered in 1998. It was introduced as a regional tax, the rate was the same 5%, but the regions were allowed to set it lower. However, almost all subjects of the Russian Federation applied the maximum rate. Moreover, sales tax existed simultaneously with value added tax (VAT).
The sales tax was abolished from January 1, 2004, and for 14 years there has been no such tax in the Russian Federation.
Sales tax in different countries
At the moment, sales tax is valid only in Japan and the United States. At the same time, sales tax in these countries replaces VAT. In Japan, the tax rate is at 8%. The previous 5% stayed in the country for 17 years.
In the United States, sales tax varies from state to state, with a rate of 2-15%. It may include taxes that the city and state establish. For example, in the state of New York, the rate is 4%, but taking into account the city rate, the tax amount will increase to 9-11%.
Sales tax is inconvenient because the buyer does not see the final cost of the product or service that he buys. Only the price is indicated on the price tag, from which the tax will be calculated directly at the checkout.
What is offered in Russia
In Russia, currently 18% VAT is applicable. But, as stated by Prime Minister Dmitry Medvedev, the VAT rate will be raised to 20% from January 1, 2019. This is the average value of VAT in the "euro zone", our closest neighbors Belarus and Ukraine also pay 20%.
However, along with this news, there are rumors about the introduction of a sales tax. The proposed rate is at 4%. Total indirect taxes in the amount of up to 24%. A progressive scale was also proposed, since if a fixed rate was introduced, the main tax burden would fall on the shoulders of the poorest segments of the population.
When a sales tax is introduced, all deductions will remain at the regional level, and not be paid to the federal budget. Therefore, its introduction will help, first of all, to solve the problems of the regions.
“There will be no sales tax in Russia”
That is exactly what the First Deputy Prime Minister and Minister of Finance of the Russian Federation, Anton Siluanov, stated. The government will not introduce sales tax in 2018 and does not plan to do so in the future.
At the moment, substantial work is underway on the tax system of the Russian Federation, it is expected to reduce some direct taxes and adjust rates for others. But there is no question of introducing additional taxes.
The same was confirmed by Russian President Vladimir Putin. He explained that he considered maintaining a sales tax impractical, since this, first of all, would lead to an increase in inflation in the country, because it would “hit” retail prices.
In 2018, Russians will not have to pay sales tax. The Government does not plan to return to the discussion of this tax in the near future.
Sales tax in Russia
The amount of tax varies greatly from state to state, often several sales taxes are set at different levels. For example, one of the highest sales tax rates was valid until the summer of 2010 in Chicago (Illinois), it amounted to 10.25%, which was obtained by summing the tax rates of the state (6.25%), city (1.25%), and the county (1.75%, later was reduced) and transport management (1%). Additional rates in the city apply to food and alcohol.
Sales tax in Russia
Sales tax was introduced in Russia twice. This happened for the first time in 1991, when this tax was introduced by the legislation of the USSR. The tax rate was set at 5 percent. However, at the end of that year, simultaneously with the collapse of the Soviet Union, fundamental changes took place in Russian tax legislation. In the new system of taxes and fees, introduced by the law "On the Basics of the Tax System in the Russian Federation" from January 1, 1992, there was no sales tax.
The second time a sales tax was introduced in Russia in 1998 as a regional tax. At the same time, it was legally established that each subject of the federation independently makes a decision on the introduction of a tax on its territory, and also sets its tax rate to the maximum. The maximum rate was again set at 5 percent. In addition, tax legislation established that with the introduction of a sales tax on the territory of a subject of the federation, the collection of the bulk of local taxes ceases. An extensive list of goods and services was also provided, the sale of which is not subject to sales tax.
In 1998 and 1999, sales tax was introduced in most constituent entities of the Russian Federation. Most of the entities in which the tax was introduced, set a rate of 5 percent (the maximum possible).
Starting January 1, 2002, sales tax collection was regulated by Chapter 27 of the Tax Code. At the same time, the basic conditions of taxation remained the same. Even at the time of the introduction of this chapter into the code, it was stipulated that it would last only two years.
Starting January 1, 2004, no sales tax will be levied in Russia.
In July 2014, Russian President Vladimir Putin, according to Reuters, supported a possible sales tax refund since 2015. However, as of September, the corresponding bill had not been submitted to the Duma.
This tax is levied on income earned by citizens or companies in the sale of their property. Since the seller transfers tax amounts from his own funds, without transferring them to the final consumer of the sold property, this tax can be classified as direct.
This video will tell you about a separate sales tax:
The rights and obligations of all participants in this process are enshrined in the tax and civil laws of the Russian Federation. These are the following acts:
- 23rd chapter of the Tax Code on personal income tax.
- 25th, in which information about income tax.
- 21st - about VAT.
- Article 207 of the Tax Code on the application of income tax.
- 220th - about the possibility of deductions.
- 217th indicating the possibility of not paying this tax.
- 1114th and 1152th articles of the Civil Code of the Russian Federation telling about the inheritance of property.
Since taxes on the sale of their property are required to pay all:
That and the types of taxes are also different. It:
- PIT for citizens and other individuals.
- Income tax if the company is operating on an OSS.
- Taxation in accordance with simplified special regimes, if the company operates on one of them (Unified State Tax Administration, UTII, USN, PSN).
In addition, in some cases, VAT is also paid. This happens if the company is on the basis. VAT is charged on the sale of:
- Non-residential property.
- Movable property (e.g. car).
- Ordinary citizens living in the country and official payers of personal income tax at their work.
- Foreigners who sold property in the Russian Federation, both residents and not.
- Pensioners do not have individual benefits and pay personal income tax on general terms.
- Companies operating on OSNO.
- Firms in special modes.
- Individual entrepreneurs who have a choice: pay personal income tax if they sell property on their own, or tax in accordance with the operating regime of their enterprise, if the property is "involved" in economic activity.
Property, the sale of which requires payment of taxes, may be of two types:
Moreover, the difference is not only in the name, but also in the approach to taxation. Real estate refers to physical objects that cannot be moved without causing damage to them, and this:
The rest of the property is considered movable and among it:
When determining the amount of tax, the taxable amount is important. It could be:
- The amount that was paid for the property upon its sale.
- Property value minus tax deductions. This applies to immovable and partly movable (e.g. auto) property.
- Property value reduced by the confirmed costs of its purchase or repair.
Additionally, the sales tax is affected by the tenure. If the owner sells the property, having owned it for more than a certain period, then he is completely exempted from taxes. It:
- 5 years for real estate acquired in the year 2016 and later.
- 3 years for the rest of the property, including donated and hereditary, as well as for movable property (cars).
Why the sales tax is unconstitutional, the expert will tell in this video:
Rates, depending on the legal and tax status of the seller of the property, are as follows:
- 13% are required to pay citizens and foreigners permanently (more than six months) living in the country, they are residents.
- 30% rate for those who do not live here permanently (non-residents).
- 20% for companies based on OSNO (for profit).
- 18% - VAT (to whom it is supposed).
- With the simplified tax system “Revenues” - 6%, and “Revenues minus expenses” - 15% of the difference.
The formula for calculating tax depends on the specific circumstances of the transaction. This can be seen in the example of car sales:
- For non-resident alienIf you sell a car for 815,000 rubles, the tax is calculated as follows: Amount of sale × 30%, i.e. 815000 × 0.3 = 224000 rubles.
- For a citizen of the Russian FederationWho sold the car for the same amount, but took the deduction, everything looks different: (Sales amount - deduction) × 13%, or (815000 - 250,000) × 0.13 = 73450.
- If the sale amount is equal to the deduction amountor less, that is, cars sold no more than 250,000, then you do not have to pay tax.
How not to pay
To avoid paying sales tax, just use one of the tips below:
- Wait until the deadline after which the tax amnesty begins. This is 5 years or 3 years, depending on the type and method of obtaining property.
- Make a deal without making a profit. That is, to sell an apartment or car for the same money that I bought or cheaper. Documents confirming the purchase expenses are required.
- Make a transaction for the amount of tax deduction: 1,000,000 rubles for real estate, 250,000 - for cars.
For even more sales tax information, see the video below: