REVALUATIONS. LIFE HACKS
When performing a number of operations, the VAT tax base is calculated not from the contract price, but from its special bar. If we talk about operations with fixed assets (OS), then, as a rule, we are talking about the carrying (residual) value of the object. It can be used either as a minimum or as the main tax base.
Apparently, many have already guessed that we are talking about such operations with the objects of the OS, such as: sales using the minbaz (para. 188.1 of the TCU); the accrual of compensating tax liabilities (BUT) when using the object in a non-taxable / non-economic activity (para. 189.1 of the TCU); the elimination of the object with the accrual BUT (paragraph 189.9 GCC).
It is not difficult to guess: the greater the book value, the greater the amount of accrued BUT. And what can help reduce the book value? Of course, the devaluation of the object!
In these cases, the book value is determined at the beginning of the period during which such operations are carried out. Therefore, it is necessary to discount the object in the previous period. Of course, the devaluation of fixed assets – although it is voluntary, but still troublesome. But if the amount of BUT is too large, then all this fuss will pay off with interest.
Similarly, you can try to use the utility reduction procedure. Even simpler – no need to involve a professional appraiser.
But with the stale goods, this maneuver will not work. Both the minbase and the base, if used in non-taxable / non-economic transactions, are calculated on the purchase price and do not depend on a decrease in their value.
For those who do not consider the difference, in its own way both markdowns and additional estimates of fixed assets are beneficial. For example, if the taxpayer urgently needs to reduce the financial result of the current period, then a devaluation (as well as a decrease in utility) already in the holding period leads to an increase in expenses, which means to a reduction in the taxable item of this period. By the way, this option goes with the goods.
Revaluation of the asset, on the contrary, works for the future, allowing you to stretch the depreciation of the increased cost for a long period. And this will eventually lead to a reduction in the taxable item.
Again, the maneuver is suitable only for those who do not consider the difference. If you decide to sell the object of the OS, then it is logical to carry out an additional appraisal before transferring it to the assets held for sale. When selling financial result is calculated as the difference between the sale and book value. The latter will be just increased by the amount of the revaluation surplus, therefore, the difference will be minimal.
Do not forget that the excess of the amounts of previous additional estimates over the amounts of previous markdowns are included in the retained earnings with a simultaneous decrease in capital in the additional estimates (Dt 411 – Ct 441). That is, this posting will not affect the financial result.
For highly profitable this option will not work. Indeed, by definition, the residual value is the initial value less tax depreciation. Therefore, the reducing sales difference from clause 138.2 of the GCC will eat the full effect of the revaluation surplus (the financial result will increase the residual book value, and decrease – only the residual tax value). You can try to play except on the technique of an additional evaluation. According to clause 17 P (C) BU 7, the initial cost and depreciation increase according to the revaluation index. That is, the initial cost is formally increased, but not the residual one. But immediately warned – this is a weak argument.
For highly profitable people, there is also an option to optimize the tax on profits when selling an OS object. Immediately warned – this path is very thorny, suitable only for expensive objects. A supplementary assessment can help along with the procedure for selecting a legal entity. We describe briefly the essence. Before selling an object, we revaluate it so that the book value is close to the market and sales value. The reassessment itself does not affect tax accounting, and therefore it is painless.
As you can see, markdowns and additional estimates are a very useful tool not only in respect of tax payment, but also in the daily activities of the economic community. The main thing is to skillfully use it and not go too far, turning these procedures into fiction.
Author: Kristina Vorozhbitova