Acts of work performed or the provision of services from an individual entrepreneur. What do you need to know?
Very often large enterprises need to receive a certain service or perform a certain type of work. Collaboration with another company often requires a lot of time and money. And cooperation with a private entrepreneur will help reduce the cost of certain types of work or services. Thus, the company can optimize costs and get great profits in the end.
The cost of services received from an entrepreneur, according to accounting rules, is taken into account when determining the object of taxation.
The receipt of services or works does not form tax accounting, which may further affect the financial result.
In order that in the future it would not be necessary to report on the receipt of income from cooperation with an entrepreneur, you need to correctly determine the category of work and services.
It is better to cooperate on those works and services, the cost of which can be immediately shown in the reporting documentation, exactly during the period of receipt.
According to Art. 4 of the Law of Ukraine “On Accounting”, the basic principle of calculating income and expenses is in effect.
According to this principle, income and expenses are shown in accounting and financial statements at the time they arise, regardless of the date of receipt or payment of funds.
So, if the performance of certain work or the provision of services is necessary to generate regular income (for example, once a quarter), then the expenses must also be fixed at the same time.
But if expenses cannot be directly related to the income received, then they can be recognized as expenses in this period in which they are incurred.
The entity recognizes expenses in the period to which they relate. Or together with the income received, or during the period of its actual implementation.
An act of work performed or services rendered is an official document that shows the actual performance of work. But it is not always possible to trace the expenses of the enterprise by the act of work performed.
In order for the act to be recognized as a proper document, it is necessary that it has all the necessary details.
If an entrepreneur performs certain work or provides services, and an act has been drawn up between the enterprise and the entrepreneur, then he does not show income in himself. After all, entrepreneurs who are on a simplified or general taxation system show incomes on a cash basis.
For entrepreneurs of the general taxation system, in accordance with clause 177.2 of the Tax Code of Ukraine, the object of taxation is the net, actually received income.
And for entrepreneurs who are payers of the single tax income in accordance with clause 292.1. The Tax Code of Ukraine is income received in the reporting period in cash.
For entrepreneurs of any form of taxation, income arises from the moment the funds are received by the entrepreneur or transferred to the current account.
So, despite the fact that the services are provided and this is confirmed by the act of providing services or performing work, the entrepreneur does not receive income until the funds are credited to the account.
But the inspecting authorities, in particular the tax authorities, indicate that one primary document is not enough for them to report. According to the methodological recommendations that are guided by the tax authorities, they check the authority of persons to sign documents, the movement of funds during the period of economic activity, as well as the availability of opportunities for an entrepreneur to carry out a particular service or perform work. That is, the entrepreneur must have either qualified personnel to perform the work, or certain technical support for the provision of services.
It is better in the case of a relationship between an entrepreneur and an enterprise to draw up a contract in writing. Which will meet the requirements of Art. 208 of the Civil Code of Ukraine.
The contract must clearly state that one of the parties is an individual – an entrepreneur.
It will also not be superfluous, in addition to the act of completed work, to place an order for the performance of work or the provision of a service, and the entrepreneur to have a report on the cost of providing services or performing work with a detailed calculation of their cost.
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