Accounting support for agricultural companies and farms

Agricultural companies face challenges regarding proper accounting and taxation. In this case, quality accounting support is always relevant, covering general issues of preparation and submission of reports, as well as other aspects of organizing the activities of agricultural companies or farms. Assistance from a professional accountant is also necessary for strategic decision-making and controlling resource efficiency. More details below.

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Accounting in Agriculture: Main Challenges

Difficulties arise due to the specifics of the agricultural sector and the organizational-legal forms of businesses operating within it. As a result, accounting for such companies is complicated by:

1. Uneven expenses and income (seasonality). Agricultural production reaches its peak during harvest seasons, and most expenses and revenues occur then. This creates uneven financial pressure and requires a special approach to accounting for activity periods;
2. Need to account for government subsidies for agriculture. The state often provides subsidies and grants to support production and development. Accounting for these funds is complex, and proper reporting requires compliance with special rules;
3. Complexity of preparing primary documents for accounting. Agricultural companies and farms often use non-standardized primary documents, complicating accounting automation (e.g., for biological asset movements);
4. Diversity of tax regimes. It is hard to specify a single tax group for such companies, as they often change their tax status during operations. Therefore, an accountant must understand the nuances of interaction with tax regimes such as the 3rd-4th single tax groups, general taxation system, VAT payer, etc.

Accounting Reports and Taxation of Agricultural Companies and Farms: Key Details

This section reviews the most commonly chosen forms by agribusiness, specific taxes they pay, and the reporting they submit. Usually, farms and agricultural companies register under:

• the fourth group of the simplified taxation system (single tax). Here, tax does not depend on income or profit but is calculated as a percentage of the normative monetary land valuation;
• the third group of the simplified taxation system (single tax). Here, the business pays tax from its income, which is 3% (for VAT payers) or 5% (non-VAT payers).

Besides general taxes determined by the chosen tax system, agricultural companies and farms pay land tax (when leasing land), excise tax (if storing fuel for their own agricultural machinery), and environmental tax. Often, companies also pay a quarterly rent fee for special water use if irrigation systems or other water intake facilities are installed on their land. Each tax must be properly calculated and accounted for in reports.

Typical reports for agricultural companies include:

• Form No. 2-farm, annual;
• Form No. 50-agriculture, annual accordingly.

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What services does the accounting department of Prykhodko & Partners law firm provide for agricultural companies and farms?

Full Consulting

Accounting consulting is a set of services primarily including consultations on taxation issues (including optimal group selection), analysis and assistance in developing accounting policies, performing local calculations for accounting. Consulting can be one-time or ongoing but limited in scope. Full support also includes bookkeeping and personnel documentation management.

Accounting and Tax Reporting

This service covers not only document preparation but also submission to tax authorities. Our law firm’s accountant offers preparation of:

• financial statements (Balance sheet, Income statement);
• tax reports (declarations);
• primary documents for accounting;
• internal regulations for proper storage of accounting documents.

Personnel Documentation Management

Additionally, at the client’s request, the accountant can handle:

1. personnel files and employment records;
2. issuance of dismissal orders and compensations;
3. calculation of vacation pay and sick leave;
4. salary calculation and payment, bonuses, and additional payments.

Would you like to get accounting support for agricultural companies and farms from Prykhodko & Partners? Please fill out the form below and schedule an introductory consultation with one of our specialists.