For various reasons, incl. lack of own funds, companies resort to borrowing. These borrowings can be in various forms, for example, in the form of loans and loans, commodity and commercial loans. Under certain conditions, when foreign companies participate in the borrowings of a Russian organization, controlled debt arises, the accounting of expenses for which for income tax purposes is carried out according to special rules.
What is controlled foreign debt?
Controlled debt is the outstanding debt of a Russian organization under its debt obligation (clause 2, article 269 of the Tax Code of the Russian Federation):
1) to a foreign person interdependent with it in accordance with paragraphs. 1, 2, 9 p. 2 art. 105.1 of the Tax Code of the Russian Federation;
2) in front of a person who, in accordance with paragraphs. 1 - 3, 9 p. 2 art. 105.1 of the Tax Code of the Russian Federation is interdependent in relation to the foreigner specified in clause 1 (an exception is provided for in clause 8 of article 269 of the Tax Code of the Russian Federation, subject to the requirements of clause 10 of article 269 of the Tax Code of the Russian Federation);
3) before other persons, but according to this obligation, any of the persons specified in paragraph 1 and (or) paragraph 2 acts as a surety, guarantor or otherwise ensures its fulfillment (an exception is provided for by paragraph 9 of article 269 of the Tax Code of the Russian Federation, subject to the requirements clause 10, article 269 of the Tax Code of the Russian Federation).
How is interest on controlled debt accounted for?
In order to answer this question, it is necessary to compare the equity of the borrowing organization (ie, the difference between assets and liabilities according to accounting data) and the amount of controlled debt on the last number. It must be borne in mind that when calculating equity, liabilities do not take into account the amount of debt on taxes and fees, incl. current debt for the payment of taxes and fees, the amount of deferrals, installments and investment tax credit (Letter of the Ministry of Finance dated December 27, 2017 No. 03-03-06/1/87340 (clause 1)).
If the amount of equity turns out to be negative or equal to zero, then the interest on the loan is not taken into account at all as part of “profitable” expenses, but is equated to dividends (Letters of the Ministry of Finance dated 06.26. -03-06/1/46720). When paying them, it is necessary to withhold income tax and transfer it to the budget as a tax agent (clause 3, article 284, clause 2, article 310 of the Tax Code of the Russian Federation).
If the controlled debt does not exceed equity or exceeds it, but no more than 3 times (for banks and leasing companies - no more than 12.5 times), then the accountant uses general rules to account for interest (paragraph 1 of article 269 Tax Code of the Russian Federation) - actually accrued interest can be taken into account in expenses. Otherwise, a special procedure applies.
Special procedure: 3 steps to accounting for interest
On the last day of each reporting (tax) period for controlled debt, which exceeds more than 3 times the equity of the organization, the accountant needs to perform the following steps.
Step 1: Find the amount of equity that corresponds to the share of direct or indirect participation of a foreign organization in the authorized capital of the borrower (SC e).
Interdependence
According to paragraphs. 1 p. 2 art. 269 of the Tax Code of the Russian Federation, controlled debt will be recognized as a debt of a Russian organization under a debt obligation to a foreign entity that is a related person of a Russian organization in accordance with paragraphs. 1, 2 or 9 paragraph 2 of Art. 105.1 of the Tax Code of the Russian Federation, if such a foreign person directly or indirectly participates in a Russian organization that has a debt obligation to this foreign person.According to the said provisions of Art. 105.1 of the Tax Code of the Russian Federation, the following are recognized as interdependent persons:
- organizations in the event that one organization directly and (or) indirectly participates in another organization and the share of such participation is more than 25% (clause 1 clause 2 article 105.1 of the Tax Code of the Russian Federation);
- an individual and an organization if such an individual directly and (or) indirectly participates in such an organization and the share of such participation is more than 25% (clause 2, clause 2, article 105.1 of the Tax Code of the Russian Federation);
- organizations and (or) individuals in the event that the share of direct participation of each previous person in each subsequent organization is more than 50% (clause 9, clause 2, article 105.1 of the Tax Code of the Russian Federation).
A foreign organization has an agreement with Organization A. At the same time, the foreign organization owns:
- 50% of Entity B, which owns 16% of Entity A;
- 60% of Entity B, which owns 20% of Entity A;
- 10% of Entity D, which owns 70% of Entity A.
- through Entity B - 8% (0.5 x 0.16 x 100%);
- through Entity B - 12% (0.6 x 0.2 x 100%);
- through Organization G- 7% (0.1 x 0.7 x 100%).
Thus, the foreign entity indirectly owns 27% of Entity A, which is more than 25%.
Therefore, Foreign Organization and Organization A are considered to be interdependent for the purposes of the Tax Code.
Entity A's debt obligation to the Foreign Entity will be treated as controlled debt for the purposes of art. 269 of the Tax Code of the Russian Federation.
Debt comparability
From the rule provided for in para. 2 p. 2 art. 269 of the Tax Code of the Russian Federation, there is an exception. It is contained in paragraph 8 of Art. 269 of the Tax Code of the Russian Federation. According to this rule, outstanding debt is not recognized as controlled debt if the following conditions are simultaneously met:- a debt obligation has arisen to a Russian organization or individual that is tax residents of the Russian Federation during the entire reporting (tax) period and is recognized as related parties of a foreign entity on the basis of paragraphs. 1, 2, 3 or 9 paragraph 2 of Art. 105.1 of the Tax Code of the Russian Federation;
- the Russian organization or individual to which a debt obligation has arisen, during the reporting (tax) period, does not have outstanding debt on comparable debt obligations to a foreign person specified in paragraphs. 1 and (or) paragraphs. 2 p. 2 art. 269 of the Tax Code of the Russian Federation.
In addition, paragraph 8 of Art. 269 of the Tax Code of the Russian Federation is applied taking into account the features provided for in paragraph 11 of Art. 269 of the Tax Code of the Russian Federation.
This provision of the Code sets out the rules for determining the comparability of debt obligations. The rules are as follows:
- To determine the comparability of debt obligations, the total amount of these obligations and the period for which they are granted are taken into account.
- If there are several debt obligations under transactions concluded with a foreign person, the amounts of such obligations are summed up to determine the total amount of debt obligations.
- If the currency of a debt obligation to a foreign entity differs from the currency of the debt obligation with which the comparison is made, the debt obligations are converted to a single currency at the exchange rate of the Bank of Russia on the date the debt obligation to the creditor arises.
- If the period for which the debt obligation of the Russian organization was granted does not exceed the period for which the outstanding debt under the debt obligation to a foreign person arose, such periods are considered comparable.
Guarantee
In accordance with paragraphs. 3 p. 2 art. 269 of the Tax Code of the Russian Federation, the debt will be recognized as controlled under a debt obligation, according to which the above-mentioned foreign person and (or) its related person act as a surety, guarantor or otherwise undertake to ensure the fulfillment of this debt obligation of the taxpayer - a Russian organization. This rule will not work if the following conditions are simultaneously met (clause 9 of article 269 of the Tax Code of the Russian Federation):- a debt obligation arose to an organization that is a bank (including organizations recognized as banks in accordance with the laws of foreign states), not recognized as an interdependent person both with a Russian organization and with persons acting as a guarantor, guarantor or otherwise undertaking to fulfill a debt obligation of a taxpayer;
- from the moment the debt obligation of the taxpayer arose, there was no termination (fulfillment) of the specified debt obligation, both in terms of the amount of the principal debt and in terms of payment of interest by a foreign person and (or) its related person acting as a guarantor, guarantor or otherwise obligated to ensure the fulfillment of the specified debt obligations.
Rules for determining interest limits
From 2017, the procedure for determining the maximum amount of interest on controlled debt, taken into account for income tax purposes, will be established in paragraphs 3-6 of Art. 269 of the Tax Code of the Russian Federation.Special treatment for interest
A special procedure for accounting for interest will be applied if the amount of controlled debt of a taxpayer is more than three times (for banks and organizations engaged in leasing activities - more than 12.5 times) the difference between the amount of assets and the amount of liabilities of this taxpayer by the last day of the reporting (tax) period.According to paragraph 3 of Art. 269 of the Tax Code of the Russian Federation states that an organization engaged in leasing activities is recognized as an organization in which, in the reporting (tax) period, on the last day of which the maximum amount of interest to be included in expenses is calculated, income from leasing activities taken into account when determining the tax base, account for at least 90% of all taxable income for the specified reporting (tax) period.
In addition, when determining the amount of controlled debt of a taxpayer, the amounts of controlled debt arising from all obligations of this taxpayer specified in paragraph 2 of Art. 269 of the Tax Code of the Russian Federation, in the aggregate.
Calculation of marginal interest
The rules for calculating marginal interest will be established in paragraph 4 of Art. 269 of the Tax Code of the Russian Federation, but the calculation formula itself remained the same:The maximum amount of interest is determined on the last day of each reporting (tax) period by dividing the amount of interest accrued by the taxpayer in each reporting (tax) period on controlled debt by the capitalization coefficient calculated as of the last reporting date of the corresponding reporting (tax) period.
Starting from the next year, the capitalization ratio is calculated by dividing the amount of the relevant outstanding controlled debt by the amount of equity corresponding to the interest of the related foreign entity specified in paragraphs. 1 p. 2 art. 269 of the Tax Code of the Russian Federation, in a Russian organization, and dividing the result by three (for banks and organizations engaged in leasing activities - by 12.5).
At the same time, equity is understood as the difference between the amount of assets and the amount of liabilities of the taxpayer.
When calculating the amount of equity capital, the amounts of debt obligations in the form of debts on taxes and fees, including the current debt on payment of taxes and fees, the amounts of deferrals, installments and investment tax credit are not taken into account.
In addition, since 2017, in the event of a change in the capitalization ratio in the subsequent reporting period or at the end of the tax period compared to previous reporting periods, the maximum amount of interest to be included in expenses on controlled debt for the previous reporting period is not subject to change.
Dividends
Starting next year, the positive difference between accrued interest and marginal interest, as now, is equated to dividends, but taxed either under paragraph 3 of Art. 224 of the Tax Code of the Russian Federation, or according to paragraph 3 of Art. 284 of the Tax Code of the Russian Federation (currently the difference is taxed under paragraph 3 of Article 284 of the Tax Code of the Russian Federation).So, according to par. 3, paragraph 3, article 284 of the Tax Code of the Russian Federation for taxation of income received by a foreign organization in the form of dividends, a rate of 15% is provided.
According to the new rules, Art. 269 of the Tax Code of the Russian Federation, the said foreign person will also be understood as a foreign individual.
When paid to a foreigner who is not a tax resident who received dividends from equity participation in the activities of Russian organizations, taxation will be carried out in accordance with paragraph 3 of Art. 224 of the Tax Code of the Russian Federation at a rate of 15%.
However, legislators that a foreigner, like a citizen of the Russian Federation, for the purpose of calculating personal income tax, may turn out to be a resident of the Russian Federation.
And in paragraph 3 of Art. 224 only indicates what rate to apply to a foreigner, non-tax resident, which received dividends from equity participation in the activities of Russian organizations (15%).
Therefore, it remains unclear what rate should be applied in this case to interest-dividends paid to a foreigner - a tax resident of the Russian Federation.
Transition period
From January 1 to December 31, 2016, the outstanding debt specified in paragraph 2 of Art. 269 of the Tax Code of the Russian Federation, is not recognized as a controlled debt if two conditions are met simultaneously.- a debt obligation has arisen to a bank (including a foreign bank) that is not recognized as an interdependent person both with a Russian organization and with persons acting as a guarantor, guarantor or otherwise obligated to fulfill a taxpayer's debt obligation.
- from the moment the debt obligation of the taxpayer arose, there was no termination (fulfillment) of the specified debt obligation, both in terms of the amount of the principal debt and in terms of payment of interest by the foreign organization specified in paragraph 2 of Art. 269 of the Tax Code of the Russian Federation, and (or) an affiliate of this foreign organization, acting as a surety, guarantor or otherwise obligated to ensure the fulfillment of this debt obligation.
As of September 30, 2017, the organization did not repay two loans from a foreign company that has a 50% stake in its authorized capital, in the amount of 500,000 and 700,000 rubles.
For the third quarter of 2017, these loans accrued interest in the amount of RUB 20,000.
The indicator of line 1300 of the balance sheet as of September 30, 2017 is 50,000 rubles, and the credit balance on account 68 "Calculations for taxes and fees" is 100,000 rubles.
The amount of controlled debt will be 1,200,000 rubles. (500,000 rubles + 700,000 rubles).
The equity capital of the organization is 150,000 rubles. (50,000 rubles + 100,000 rubles).
The ratio of controlled debt to equity is 8 (1,200,000 rubles / 150,000 rubles).
Accordingly, interest on controlled debt is included in tax expenses according to the standard.
The capitalization ratio is 5.33 (1,200,000 rubles / (150,000 rubles x 0.5) / 3).
The maximum amount of interest is 3752.35 rubles. (20,000 rubles / 5.33), which is less than the amount actually accrued (3,752.35 rubles.< 20 000 руб.).
Consequently, only 3,752.35 rubles can be taken into account in tax expenses in the third quarter of 2017.
The remaining 16,247.65 (20,000 rubles - 3,752.35 rubles) are not included in expenses and are recognized as dividends.
Controlled debt to a foreign entity— outstanding debt of a Russian organization to an interdependent foreign organization or a person related to this organization.
The term "Controlled debt" in English is Controlled debt.
Controlled debt to a foreign organization is regulated by paragraphs 2-13 of Article 269 of the Tax Code of Russia.
The main consequence of the emergence of controlled debt is that if its size is more than 3 times (for banks, as well as for organizations engaged exclusively in leasing activities - more than 12.5 times) exceeds the difference between the amount of assets and the amount of liabilities of the taxpayer - Russian organization (own capital) as of the last day of the reporting (tax) period, the taxpayer is obliged to calculate the maximum amount of interest recognized as an expense on controlled debt. This maximum interest rate is determined by dividing the amount of interest accrued by the taxpayer in each reporting (tax) period on controlled debt by the capitalization ratio calculated as of the last reporting date of the corresponding reporting (tax) period.
At the same time, the capitalization ratio is determined by dividing the amount of the relevant outstanding controlled debt by the amount of equity corresponding to the share of direct or indirect participation of this foreign organization in the authorized (share) capital (fund) of the Russian organization, and dividing the result by three (for banks and organizations, engaged in leasing activities - by twelve and a half).
Income tax expenses include the amount of marginal interest on controlled debt, but not more than the interest actually accrued. The positive difference between the accrued interest and the marginal interest is equated for tax purposes with dividends paid to a foreign organization (that is, taxed as dividends).
Example
A foreign organization issued a loan to a Russian organization in the amount of 1 million euros. A foreign organization owns 30% of the shares of a Russian organization. Equity capital at the end of the reporting period of the Russian organization - 400 thousand rubles (10 thousand euros). The amount of accrued interest is 100 thousand rubles.
Since the foreign organization directly owns more than 25% of the authorized capital, the loan debt is controlled.
The amount of the loan is more than 3 times the amount of equity, and accordingly there is an obligation to calculate marginal interest.
If the amount of marginal interest, for example, is 30 thousand rubles, this means that only 30 thousand rubles can be recognized for income tax expenses, and the remaining 70 thousand rubles of interest should be taxed as dividends.
A comment
Dzhaarbekov Stanislav, tax consultant, lawyer. Website: Taxd.ruThe rules under consideration for calculating marginal interest are aimed at preventing foreign companies from using financing using thin capitalization - by replacing dividend payments with interest payments on loans. The fact is that the payment of dividends brings more income to the Russian treasury than the payment of loans. So, if a Russian company pays dividends in favor of a foreign company, then first it pays income tax on the amount of profit, and then pays tax on dividends (the tax rate depends on agreements between Russia and a foreign state). If a Russian organization pays interest on a loan to a foreign organization, then this interest is recognized as an expense, reducing taxable profit. The interest itself, under most double tax treaties, is taxed in a foreign country.
That is why the tax code has a rule that if the debt significantly exceeds the amount of equity capital, then part of the interest on the loan can be reclassified into dividends. Many countries have similar rules.
Example
A foreign company plans to invest 100 million rubles in a Russian company.
Option 1
A foreign company can invest 100 million rubles in the authorized capital of a Russian company. In this case, the Russian company will pay income tax (generally 20%) from the profit received in Russia and pay dividends to the foreign company from the net profit. When paying dividends to a foreign company, a tax of 15% is withheld, but it can be reduced if Russia has a valid one with a foreign state.
Option 2
A foreign company can issue a loan in the amount of 100 million rubles to a Russian company (creating a company with an authorized capital of 10 thousand rubles). In this case, the amount of interest paid to a foreign organization will reduce the tax base for income tax. If a foreign state with Russia does not withhold tax when paying interest (as provided for by many agreements), then the Russian budget will receive almost nothing from foreign investment.
Application of thin (thin) capitalization rules
From 01/01/2017, the outstanding debt of a taxpayer - a Russian organization for the following debt obligations of this taxpayer (FEDERAL LAW dated February 15, 2016 No. 25-FZ) is recognized as controlled debt:
1) for a debt obligation to a foreign person that is a related person of a taxpayer - a Russian organization in accordance with subparagraph 1, 2 or 9 of paragraph 2 of Article 105.1 of the Tax Code of the Russian Federation *, if such a foreign person directly or indirectly participates in the taxpayer - a Russian organization (paragraph 1 paragraph 2 of article 269 of the Tax Code of the Russian Federation).
* pp. 1 p. 2 art. 105.1 of the Tax Code of the Russian Federation of an organization if one organization directly and (or) indirectly participates in another organization and the share of such participation is more than 25 percent;
pp. 2 p. 2 art. 105.1 of the Tax Code of the Russian Federation an individual and an organization if such an individual directly and (or) indirectly participates in such an organization and the share of such participation is more than 25 percent;
pp. 9 p. 2 art. 105.1 of the Tax Code of the Russian Federation organizations and (or) individuals in the event that the share of direct participation of each previous person in each subsequent organization is more than 50 percent;
2) for a debt obligation to a person recognized in accordance with subparagraph 1, 2, 3 or 9 of paragraph 2 of article 105.1 of the Tax Code of the Russian Federation as an interdependent person of a foreign person specified in paragraph 1 (subparagraph 2 of paragraph 2 of article 269 of the Tax Code of the Russian Federation);
3) for a debt obligation under which the foreign entity specified in clause 1 and (or) its related entity specified in clause 2 act as a guarantor, guarantor or otherwise undertake to ensure the fulfillment of this debt obligation of a taxpayer - a Russian organization (clause 3 paragraph 2 of article 269 of the Tax Code of the Russian Federation).
Paragraphs 7 - 12 of Article 269 of the Tax Code of the Russian Federation define special cases when the debt is not recognized as controlled.
At the same time, the rule is stated that the court may recognize as controlled debt the outstanding debt of a taxpayer - a Russian organization on debt obligations that are not formally recognized as controlled (signs are specified in paragraph 2 of Article 269 of the Tax Code of the Russian Federation), if it is established that the ultimate goal of payments on such debt obligations are payments to organizations specified in subparagraphs 1 and 2 of paragraph 2 of Article 269 of the Tax Code of the Russian Federation. (clause 13, article 269 of the Tax Code of the Russian Federation).
Until 01/01/2017 - The requirement to calculate the maximum interest arises if the following conditions are met:
First condition
If the debt satisfies any of the following conditions, then it is called controlled debt to a foreign organization:
The Russian organization has an outstanding debt on a debt obligation:
1) To a foreign organization that directly or indirectly owns more than 20 percent of the authorized (share) capital (fund) of this Russian organization;
Example
The foreign Company owns 30% of the share capital of the Russian organization.
Debt under a debt obligation of a Russian organization to a foreign company will be recognized as controlled.
Example
The foreign Company owns 70% of the share capital of the Russian organization Alfa. The Russian organization Alpha owns 60% of the share capital of the Russian organization Beta. The debt on the debt obligation of the Russian organization Beta to a foreign company will be recognized as controlled, since the share of the foreign organization's indirect participation in the Russian organization Beta is 42% (70% * 60%).
Front Russian organization recognized in accordance with the legislation of the Russian Federation specified foreign organization;
Example
The foreign Company owns 90% of the authorized capital of the Russian organization Alpha and 40% of the authorized capital of the Russian organization Beta. If the Russian company Alfa issues a loan to the Russian organization Beta, then the debt will be recognized as controlled.
For a debt obligation in respect of which such an affiliate and (or) directly this foreign organization acts as a surety, guarantor or otherwise undertakes to ensure the fulfillment of the debt obligation of a Russian organization.
Example
The Russian company Alfa, 30% owned by a foreign company, received a loan from a bank. The Russian organization Beta, affiliated with a foreign organization, acted as a guarantor for the loan.
Loan debt is recognized as controlled.
Second condition
If the amount of controlled debt to a foreign organization is more than 3 times (for banks, as well as for organizations engaged exclusively in leasing activities - more than 12.5 times) exceeds the difference between the amount of assets and the amount of liabilities of a taxpayer - a Russian organization (own capital ) on the last day of the reporting (tax) period.
When determining the amount of equity capital, the amounts of debt obligations in the form of debts on taxes and fees, including the current debt on the payment of taxes and fees, the amounts of deferrals, installments and investment tax credit (clause 2 of article 269 of the Tax Code of the Russian Federation) are not taken into account.
Equity capital, for the purposes of applying the thin capitalization rules, is determined by the formula:
SC \u003d A - O + H
SC - equity capital last date of the reporting (tax) period
A - the organization's assets as of the last day of the reporting (tax) period (can be determined according to the balance sheet data - the line "Balance");
O - the organization's obligations for the last day of the reporting (tax) period (can be determined according to the balance sheet data - the amount of short-term and long-term obligations);
H - tax liabilities of the organization on the last day of the reporting (tax) period.
It should be noted that the debt on mandatory pension insurance contributions does not apply to debt on taxes and fees (clause 2 of the Letter of the Ministry of Finance of Russia of 01.23.2007 N 03-03-06 / 1/23, Letter of the Ministry of Finance of Russia of 07.03.2013 N 03 -03-06/1/6908). Accordingly, the debt on insurance premiums for mandatory pension insurance should be taken into account by the organization when determining the amount of equity.
The essence of thin capitalization rules:
The result of applying the thin capitalization rules is as follows:
1) Expenses include the marginal interest on controlled debt, calculated by calculation, according to the rules below, but not more than the interest actually accrued (clause 3, article 269 of the Tax Code of the Russian Federation).
2) A positive difference between accrued interest and marginal interest is equated for tax purposes to dividends paid to a foreign organization in respect of which there is a controlled debt (clause 4 of article 269 of the Tax Code of the Russian Federation).
Limit interest is calculated by the formula:
PP - marginal interest for the reporting (tax) period
P - the amount of interest accrued by the taxpayer in the reporting (tax) period.
The capitalization ratio is calculated by the formula:
KK \u003d (NKZ: SK * DU): K
CC - capitalization ratio calculated as of the last reporting date of the corresponding reporting (tax) period.
NKZ - outstanding controlled debt as of the last reporting date of the corresponding reporting (tax) period.
SC - equity as of the last reporting date of the relevant reporting (tax) period;
DU - the share of direct or indirect participation of a foreign organization in the authorized (share) capital (fund) of a Russian organization
K - 3, and for banks and organizations engaged in leasing activities - 12.5.
Example
The foreign Company owns 100% of the share capital of the Russian organization Alfa. On January 1, a Russian organization received a loan from a foreign organization in the amount of 100 million rubles at 6% per annum.
As of March 31, the reporting date, the debt on the loan is 100 million rubles, excluding interest. The equity capital of the Russian organization on this date is 1 million rubles.
The amount of accrued interest on the loan for the period from January 1 to March 31 amounted to 1.5 million rubles.
1) We determine the presence of conditions for the application of thin capitalization rules:
Condition 1 – fulfilled:
The Russian organization has an outstanding debt under a debt obligation to interdependent foreign organization.
Condition 2 - fulfilled:
The amount of controlled debt (100 million rubles) is more than 3 times the equity capital (1 million rubles) of Alpha Organization as of the last day of the reporting (tax) period.
2) Calculate the marginal interest
Marginal interest for the 1st quarter \u003d 1.5 million: 33.33 \u003d 45 thousand rubles.
Accordingly, the amount of interest in the amount of 45 thousand rubles is included in income tax expense. The amount exceeding this limit is not recognized as an expense and is taxed as dividends.
Organization engaged in leasing activities
Thin capitalization rules (Article 269 of the Tax Code of the Russian Federation - Tax Code of the Russian Federation) determine that taxation rules that are unfavorable for taxpayers are applied if the amount of taxpayer's controlled debt is more than 3 times (for banks and organizations engaged in leasing activities - more than 12, 5 times) exceeds the difference between the amount of assets and the amount of liabilities of this taxpayer (clause 3 of article 269 of the Tax Code of the Russian Federation).
The term "Organization engaged in leasing activities" was introduced from January 1, 2017 by the FEDERAL LAW dated February 15, 2016 No. 25-FZ "On Amendments to Article 269 of Part Two of the Tax Code of the Russian Federation with regard to the definition of the concept of controlled debt" and is included in the text paragraph 3 of Art. 269 of the Tax Code of the Russian Federation:
"leasing company, an organization is recognized in which, in the reporting (tax) period, on the last day of which the maximum amount of interest to be included in expenses is determined, the income from the implementation of leasing activities, taken into account when determining the tax base in accordance with this chapter, is at least 90 percent all income taken into account when determining the tax base in accordance with this chapter for the specified reporting (tax) period.
Application of international agreements
It should be noted that until the end of 2011, the limitation on the amount of interest on controlled debt practically did not work if a double taxation avoidance agreement was concluded with a foreign partner country in the transaction, Russia. Taxpayers have challenged this limitation in court, as such agreements usually establish a rule on non-discrimination of foreign companies, and the courts recognized the rules on controlled debt (recognition of only part of the interest as expenses) more burdensome for foreign capital than the interest tax regime for Russian organizations.
For example, judgments in favor of taxpayers have been issued:
Switzerland - Decree of the FAS ZSO dated 11.03.2011 in case No. А27-7455/2010
The Netherlands - REGULATION OF THE FAS OF THE NORTH-WESTERN DISTRICT dated 04/09/2007 in case N A56-19578 / 2006
Germany - RESOLUTION OF THE FAS OF THE MOSCOW DISTRICT dated 07.25.2005, 07.20.2005 N KA-A40 / 6616-05
Cyprus - Decree of the Federal Antimonopoly Service of the Moscow District dated July 28, 2010 N KA-A40 / 7751-10 in case N A40-99240 / 09-142-705
But at the end of 2011, the Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation of November 15, 2011 N 8654/11 was issued in case N A27-7455/2010, which changed the judicial practice on this issue. According to the Supreme Arbitration Court of the Russian Federation, limiting the amount of interest on controlled debt does not contradict the norms of international agreements, which provide for a special profit adjustment regime for associated enterprises. Accordingly, the rules of paragraph 2 of Art. 269 of the Tax Code of the Russian Federation apply even if Russia has an agreement on the avoidance of double taxation with a foreign state, with organizations of which a transaction of a Russian taxpayer has been concluded.
Payment of interest on controlled debt of a Russian organization
A situation is possible when a Russian organization pays interest on a debt obligation not to a foreign, but to a Russian organization (for example, a subsidiary of a foreign one). In this case, the amount of interest exceeding the marginal amount is not included in the costs. Is it necessary to withhold tax from these marginal interest when paying income?
The Ministry of Finance of the Russian Federation in its letters dated December 23, 2013 No. 03-08-05 / 56706, dated December 11, 2013 No. 03-03-06 / 1 / 54311, dated November 27, 2013 No. 03-08-05 / 51219, dated June 21, 2013 No. 03-08-05/23521, No. 03-08-05 dated 10.11.2010, No. 03-08-05 dated 24.12.2009 clarifies that taxation at the source of income in this case is not provided for by the Code.
An example from arbitration practice
Receipt of a loan from a sister foreign organization may lead to the application of thin capitalization rules (clause 2 of article 269 of the Tax Code of the Russian Federation).
A Russian organization received a loan from a foreign organization that did not own more than 20% of the authorized capital of this Russian organization, but was a sister company to it (the same foreign company owned significant shares of the authorized capital of both the Russian organization of the borrower and the foreign organization of the lender ).
Formally, this situation does not fall under the rules of thin capitalization. But the judiciary considered that the application of paragraph 2 of Art. 269 of the Tax Code of the Russian Federation in terms of limiting the amount of interest by maximum interest is correct.
The arguments in favor of the tax authority were based on the fact that the loan was issued under an Enterprise Co-financing Group Agreement. After examining the submitted documents, the courts came to the conclusion that the parent foreign organization in the said agreement undertook to finance the activities of the Russian company through its subsidiary foreign organization.
Decree of the Federal Antimonopoly Service of the Moscow District dated February 27, 2012 in case N A40-1164 / 11-99-7 (Determination of the Supreme Arbitration Court of the Russian Federation of June 21, 2012 N VAC-7104/12 refused to transfer the case to the Presidium of the Supreme Arbitration Court of the Russian Federation for review by way of supervision).
Important judgment
Rules p. 2-4 Art. 269 of the Tax Code of the Russian Federation apply regardless of the circumstances under one or several loan agreements in the reporting (tax) period, these obligations arose.
Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation of April 1, 2008 N 15318/07 in case N A26-8439/2006-217
Important judgment
It is necessary on the last day of each reporting period to determine the amount of debt, assets and liabilities of the organization, equity and share in the authorized capital. The summation of these indicators based on the results of half a year, nine months and a year (on an accrual basis) is not provided.
Article 269
(text of paragraphs 2-13)
2. For the purposes of this article, the outstanding debt of a taxpayer that is a Russian organization for the following debt obligations of this taxpayer is recognized as controlled debt (unless otherwise provided by this article):
1) for a debt obligation to a foreign person that is a related person of a taxpayer - a Russian organization in accordance with subparagraph 1, 2 or 9 of paragraph 2 of Article 105.1 of this Code, if such a foreign person directly or indirectly participates in the taxpayer - a Russian organization specified in paragraph one of this paragraph;
2) for a debt obligation to a person recognized in accordance with subparagraph 1, 2, 3 or 9 of paragraph 2 of Article 105.1 of this Code as an interdependent person of a foreign entity specified in subparagraph 1 of this paragraph, unless otherwise provided by paragraph 8 of this article;
3) under a debt obligation under which the foreign entity specified in subparagraph 1 of this paragraph and (or) its interdependent person specified in subparagraph 2 of this paragraph act as a surety, guarantor or otherwise undertake to ensure the fulfillment of this debt obligation of a taxpayer - a Russian organization , unless otherwise provided by paragraph 9 of this article.
(Clause 2 as amended by Federal Law No. 25-FZ of February 15, 2016)
3. If the amount of controlled debt of the taxpayer is more than 3 times (for banks and organizations engaged in leasing activities - more than 12.5 times) exceeds the difference between the amount of assets and the amount of liabilities of this taxpayer (hereinafter in this article - own capital) as of the last day of the reporting (tax) period, when determining the maximum amount of interest to be included in the expenses of this taxpayer, the rules established by paragraphs 4-6 of this article shall be applied. When determining the amount of controlled debt of a taxpayer for the purposes of this article, the amounts of controlled debt arising from all obligations of this taxpayer specified in paragraph 2 of this article, in aggregate, shall be taken into account.
For the purposes of this article, an organization engaged in leasing activities is recognized as an organization for which, in the reporting (tax) period, on the last day of which the maximum amount of interest to be included in expenses is determined, income from leasing activities taken into account when determining the tax base in accordance with with this chapter, constitute at least 90 percent of all income taken into account when determining the tax base in accordance with this chapter for the specified reporting (tax) period.
(Clause 3 as amended by Federal Law No. 25-FZ of February 15, 2016)
4. The maximum amount of interest to be included in expenses on controlled debt is calculated by the taxpayer on the last day of each reporting (tax) period by dividing the amount of interest accrued by this taxpayer in each reporting (tax) period on controlled debt by the capitalization coefficient calculated as of the last reporting date of the corresponding reporting (tax) period. At the same time, in the event of a change in the capitalization ratio in the next reporting period or following the results of the tax period compared to previous reporting periods, the maximum amount of interest to be included in expenses on controlled debt for the previous reporting period is not subject to change.
For the purposes of this article, the capitalization ratio is determined by dividing the amount of the relevant outstanding controlled debt by the amount of equity corresponding to the share of participation of the related foreign entity specified in subparagraph 1 of paragraph 2 of this article in a Russian organization, and dividing the result by 3 (for banks and organizations engaged in leasing activities - by 12.5).
When determining the amount of equity, the amounts of debt obligations in the form of debts on taxes and fees, including the current debt on payment of taxes and fees, the amounts of deferrals, installments and investment tax credit are not taken into account.
(Clause 4 as amended by Federal Law No. 25-FZ of February 15, 2016)
5. Expenses shall include interest on controlled debt in an amount not exceeding the maximum amount of interest to be included in expenses calculated in accordance with paragraph 4 of this article, but not more than actually accrued interest.
At the same time, the rules established by paragraph 4 of this article shall not apply to interest on borrowed funds if the outstanding debt on the relevant debt obligation is not controlled.
(Clause 5 was introduced by Federal Law No. 25-FZ of February 15, 2016)
6. The positive difference between the accrued interest and the marginal interest calculated in accordance with paragraph 4 of this article shall be equated for tax purposes with dividends paid to a foreign person specified in subparagraph 1 of paragraph 2 of this article and taxed in accordance with paragraph two of paragraph 3 Article 224 or paragraph 3 of Article 284 of this Code.
(Clause 6 was introduced by Federal Law No. 25-FZ of February 15, 2016)
7. An outstanding debt under a debt obligation is not recognized as controlled debt for a taxpayer - a Russian organization, if the calculation and withholding of the amount of tax on interest income of a foreign organization paid on such a debt obligation are not performed by a tax agent in accordance with subparagraph 8 of paragraph 2 of Article 310 of this Code .
(Clause 7 was introduced by Federal Law No. 25-FZ of February 15, 2016)
7.1. An outstanding debt under a debt obligation is not recognized as a controlled debt for a taxpayer - a Russian organization, if the following conditions are simultaneously met:
the funds constituting the specified outstanding debt are used exclusively to finance an investment project implemented by the taxpayer in the territory of the Russian Federation;
the terms of the agreement, in accordance with which the debt obligation specified in this paragraph arose, provide for the beginning of the repayment of the amount of outstanding debt on such a debt obligation not earlier than five years after its occurrence;
the total share of the direct and indirect participation of the related foreign entity specified in subparagraph 1 of paragraph 2 of this article in the Russian organization does not exceed 35 percent;
the place of registration (place of tax residence) of a person to whom a debt obligation has arisen is a foreign state with which an agreement (agreement, convention) on the avoidance of double taxation has been concluded.
For the purposes of this paragraph, an investment project is the creation on the territory of the Russian Federation of a new production complex for the production of goods and (or) the provision of services. The production complex is recognized as new if it was put into operation after January 1, 2019 and was not previously in operation.
In case of non-fulfillment of one of the conditions established by this paragraph, the provisions of this article shall apply to the outstanding debt under the debt obligation specified in this paragraph, without regard to the provisions of this paragraph, from the date of occurrence of the corresponding debt obligation.
(Clause 7.1 was introduced by Federal Law No. 199-FZ of July 19, 2018)
8. The outstanding debt specified in subparagraph 2 of paragraph 2 of this article shall not be recognized as controlled debt for a taxpayer - a Russian organization, if the following conditions are simultaneously met (taking into account the specifics established by paragraph 11 of this article):
1) a debt obligation has arisen to a Russian organization or an individual who, in accordance with this Code, are tax residents of the Russian Federation during the entire reporting (tax) period and are recognized as interdependent persons of a foreign entity specified in subparagraph 1 of paragraph 2 of this article, on the basis of subparagraph 1 , 2, 3 or 9 of paragraph 2 of Article 105.1 of this Code;
2) a Russian organization or an individual to which a debt obligation has arisen, during the reporting (tax) period, does not have an outstanding debt on comparable debt obligations to a foreign person specified in subparagraphs 1 and (or) 2 of paragraph 2 of this article.
(Clause 8 was introduced by Federal Law No. 25-FZ of February 15, 2016)
9. The outstanding debt specified in subparagraph 3 of paragraph 2 of this article shall not be recognized as controlled debt for a taxpayer - a Russian organization, provided that the following conditions are simultaneously met:
1) a debt obligation has arisen to an organization that is a bank (including organizations recognized as banks in accordance with the laws of foreign states) or a development bank - a state corporation that is not recognized as related parties both with a taxpayer - a Russian organization, and with persons acting as a guarantor, guarantor or otherwise obligated to fulfill the debt obligation of the taxpayer;
(as amended by Federal Law No. 466-FZ of December 29, 2017)
2) from the moment the debt obligation of the taxpayer arises, there has been no termination (fulfillment) of the specified debt obligation, both in terms of the amount of the principal debt and in terms of payment of interest by the foreign person specified in subparagraph 1 of paragraph 2 of this article and (or) its related person, specified in subparagraph 2 of paragraph 2 of this article, acting as a guarantor, guarantor or otherwise undertaking to ensure the fulfillment of the said debt obligation.
(Clause 9 was introduced by Federal Law No. 25-FZ of February 15, 2016)
10. An outstanding debt under a debt obligation is not recognized as a controlled debt on the grounds established by paragraphs 8 and 9 of this article, subject to written confirmation of the fulfillment of the conditions established by the indicated paragraphs, provided by the creditor under the debt obligation of the taxpayer - a Russian organization.
(Clause 10 was introduced by Federal Law No. 25-FZ of February 15, 2016)
11. The determination of the comparability of debt obligations for the purposes of subparagraph 2 of paragraph 8 of this article is carried out taking into account the following features:
1) to determine the comparability of debt obligations, the total amount of these obligations and the period for which they were granted are taken into account;
2) if there are several debt obligations under transactions concluded with a foreign person specified in subparagraphs 1 and (or) 2 of paragraph 2 of this article, to determine the total amount of debt obligations for the purposes of subparagraph 1 of this paragraph, the amounts of such obligations are summed up;
3) if the currency of a debt obligation to a foreign person specified in subparagraphs 1 and (or) 2 of paragraph 2 of this article differs from the currency of the debt obligation with which comparison is made, debt obligations are reduced to a single currency at the rate established by the Central Bank of the Russian Federation at date of origin of the debt obligation to the creditor;
4) in the event that the period for which a debt obligation was granted to a taxpayer - a Russian organization does not exceed the period for which an outstanding debt on a debt obligation to a foreign person specified in subparagraphs 1 and (or) 2 of paragraph 2 of this article arose, such periods are considered comparable.
(Clause 11 was introduced by Federal Law No. 25-FZ of February 15, 2016)
12. If the condition established by subparagraph 2 of paragraph 8 of this article is not met, the outstanding debt specified in subparagraph 2 of paragraph 2 of this article shall be recognized for a taxpayer - a Russian organization as controlled debt in an amount not exceeding the amount of outstanding debt on a comparable debt obligation specified in subparagraph 2 of paragraph 8 of this article.
(Clause 12 was introduced by Federal Law No. 25-FZ of February 15, 2016)
13. The court may recognize as controlled debt the outstanding debt of a taxpayer - a Russian organization for debt obligations not specified in paragraph 2 of this article, if it is established that the ultimate purpose of payments on such debt obligations are payments to organizations specified in subparagraphs 1 and 2 of paragraph 2 of this articles.
(Clause 13 was introduced by Federal Law No. 25-FZ of February 15, 2016)
The term was introduced on January 1, 2002 in connection with the entry into force of Chapter 25 "Corporate Income Tax" of the Tax Code of the Russian Federation by Federal Law No. 110-FZ of August 6, 2001 (Article 13).
Commentary on Federal Law No. 25-FZ dated February 15, 2016.
The commented law (hereinafter referred to as Federal Law No. 25-FZ) includes three articles. Article 2 makes small additions to the conditions under which debt is not recognized as controlled in 2016. These changes are small and do not need our comments.
Let's talk about Art. 1 of Federal Law No. 25-FZ, which will be effective from 01/01/2017. It is dedicated to the rules of "thin capitalization". For readers who are new to this term, we will explain its meaning. According to the Modern Dictionary of Economics, this is a form of capitalization of a company in which its capital consists of a small number of shares and, from the point of view of the tax authorities, too many bonds.
In other words, this is a very common way of tax optimization all over the world. How does it work in our country? A foreign company that directly or indirectly owns a significant share in the authorized capital of a Russian organization issues a loan to the latter (usually a very impressive amount compared to the size of the authorized capital). The benefits for both parties are obvious. The borrower records interest on debt as an expense that reduces the income tax base. The lender receives interest during the year, depending on the terms of the agreement (and if he invested in shares, he would have to pay taxes on the dividends received).
All over the world, legislators are trying to keep such optimization within the framework of some measures. The Russian Tax Code also provides for certain restrictions. So, in Art. 269 of the Tax Code of the Russian Federation, which regulates the specifics of classifying interest on debt obligations as expenses, the concept of "controlled debt" is given. Interest on such debts is accounted for according to special rules. In the current version, they are contained in paragraphs 2 - 4, and from 2017 they will be set out in paragraphs 2 - 13 of this article.
Looking ahead, we note that the very procedure for calculating the amount of controlled debt, as well as the maximum amount of interest on it included in expenses, has remained the same. The amendments affected the definition of the concept itself, which has become much broader, which will significantly increase the circle of taxpayers whose debt obligations will take on the character of controlled debt. Prepare for these changes and our commentary will help.
So, from 2017, the debt will be recognized as controlled by a debt obligation:
If the debt arose before IL
According to paragraphs. 1 p. 2 art. 269 of the Tax Code of the Russian Federation, controlled debt of RON will be recognized as an outstanding debt under a debt obligation to an IL, which is an interdependent person in relation to RON in accordance with paragraphs. 1, 2 or 9 paragraph 2 of Art. 105.1 of the Tax Code of the Russian Federation, if such a testing laboratory directly or indirectly participates in the specified RON.
According to paragraph 2 of Art. 105.1 of the Tax Code of the Russian Federation, interdependent persons are recognized, in particular:
- organizations in the event that one organization directly and (or) indirectly participates in another organization and the share of such participation is more than 25% (clause 1);
- and an organization in the event that an individual directly and (or) indirectly participates in the organization and the share of such participation is more than 25% (clause 2).
The procedure for determining the share of participation of one organization in another is set out in Art. 105.2 of the Tax Code of the Russian Federation. As follows from paragraph 2 of this norm, the shares direct involvement of a person in an organization, the share of voting shares (stake in the authorized capital) of this organization directly belonging to such a person is recognized. For example, if organization "A" owns 30% of the authorized capital of organization "B", then "A" directly participates in "B". Due to the fact that the size of the share exceeds 25%, these persons are recognized as interdependent.
The procedure for calculating the share indirect participation persons in the organization is given in paragraph 3 of Art. 105.2 of the Tax Code of the Russian Federation. Let's look at its essence with an example.
Example 1
The foreign organization Grand Ltd entered into a loan agreement with Stroyservis LLC.
At the same time, Grand Ltd owns:
- 60% of the charter capital of Alfa LLC, which owns 25% of the charter capital of Stroyservis LLC;
- 55% of the charter capital of Beta LLC, which owns 20% of the charter capital of Stroyservis LLC.
The share of indirect participation of Grand Ltd in Stroyservice LLC will be:
- through Alpha LLC - 15% (0.6 x 0.25 x 100%);
- through Beta LLC – 11% (0.55 x 0.2 x 100%).
The total product of the shares is 26% (15 + 11).
Thus, Grand Ltd indirectly owns 26% of the authorized capital of Stroyservice LLC, therefore, for the purposes of applying the Tax Code, they are recognized as related parties by virtue of paragraphs. 1 p. 2 art. 105.1 of the Tax Code of the Russian Federation. The outstanding debt under Stroyservis LLC's debt obligation to Grand Ltd will be treated as controlled for the purposes of art. 269 of the Tax Code of the Russian Federation.
In accordance with paragraph 5 of Art. 105.2 of the Tax Code of the Russian Federation, the rules for determining the direct and indirect participation of a company are also applied when calculating the share of participation of an individual in an organization. If Grand Ltd is replaced by a foreign citizen, Mr. Smith, he and Stroyservice LLC will be interdependent by virtue of paragraphs. 2 p. 2 art. 105.1 of the Tax Code of the Russian Federation and if there is a debt obligation of the specified RON to this IL, the outstanding debt will have signs of a controlled one.
In practice, a wide variety of sequences are possible, which must be taken into account when determining interdependence. A description of the various options for direct and indirect participation of an organization in equity is given, for example, in the Letter of the Ministry of Finance of Russia dated 06/21/2013 No. 03-01-18 / 23476. In this document, you can find various examples of capital ownership (“ring”, “cross”) using all kinds of mathematical techniques (geometric progression, matrix). This suggests that, if desired, the tax authorities are able to deal with a variety of ingenious schemes.
Consider another example of interdependence, indicated in paragraphs. 9 p. 2 art. 105.1 of the Tax Code of the Russian Federation. According to this rule, organizations and (or) individuals are recognized as related parties if the share of direct participation of each previous person in each subsequent organization is more than 50%.
Example 2
RNF Ltd owns a 55% stake in Gamma LLC, which owns 60% of the charter capital of Delta LLC. The latter owns 80% of the authorized capital of Omega LLC.
Each person will be interdependent in relation to any other person from the chain on the basis of paragraphs. 9 p. 2 art. 105.1 of the Tax Code of the Russian Federation. If the loan funds are provided by RNF Ltd (or Mr. Smith) to any of the three RONs in the chain (Gamma LLC - Delta LLC - Omega LLC), the outstanding debt of the listed RONs will be considered controlled.
If the debt arose to a person recognized as interdependent in relation to IL
RON can act as a borrower from a person who, at first glance, is an outsider to him, but not at all a stranger to the “foreigner” from the previous section. In other words, as follows from paras. 2 p. 2 art. 269 of the Tax Code of the Russian Federation, if the lender (let's call it "X") is an interdependent person in relation to the IL specified in paragraphs. 1 of this norm, and this interdependence is determined in accordance with paragraphs. 1, 2, 3 or 9 paragraph 2 of Art. 105.1 of the Tax Code of the Russian Federation, the RON debt will be recognized as controlled.
The “X” role can be played by Russian and foreign organizations and individuals (IO, IFL, RO, RFL). At the same time, "X" and RON are not interdependent with each other.
Note that the interdependence between person "X" and IL is determined not only by the rules of paragraphs. 1, 2 or 9 paragraph 2 of Art. 105.1 of the Tax Code of the Russian Federation (as between RON and IL), but also in accordance with paragraphs. 3 of the said norm. It states that organizations are recognized as related parties if the same person directly and (or) indirectly participates in these organizations and the share of such participation in each organization is more than 25%.
Example 3
Let's use the data of example 1. Recall that the company Grand Ltd indirectly owns 26% of the authorized capital of Stroyservice LLC and these persons are interdependent.
30% of the charter capital of Grand Ltd is owned by XYZ, which also owns 40% of the charter capital of WWW.
WWW issued a loan to Stroyservis LLC.
In this case, Grand Ltd and the WWW company will be recognized as interdependent due to the fact that the same person (XYZ company) directly participates in these organizations with a participation share of more than 25%.
Despite the fact that WWW does not participate in the capital of LLC Stroyservis, the latter's outstanding debt under the debt obligation will be considered controlled.
From the rule prescribed in paragraphs. 2 p. 2 art. 269 of the Tax Code of the Russian Federation, there is an exception specified in paragraph 8 of this article. The outstanding debt to person "X" will not qualify for RON as controlled under simultaneous fulfillment of the following two conditions:
If the last of the conditions is not met, by virtue of paragraph 12 of Art. 269 of the Tax Code of the Russian Federation, the outstanding debt to the person "X" will be recognized for the RON as controlled debt in the amount not exceeding the amount of the outstanding debt under comparable debt. At the same time, the determination of the comparability of debt obligations (for the purpose of applying paragraphs 2 of paragraph 8) is made taking into account the features set forth in paragraph 11 of Art. 269 of the Tax Code of the Russian Federation.
If the IP or a person related to it provides security for the performance of an obligation
According to paragraphs. 3 p. 2 art. 269 of the Tax Code of the Russian Federation, controlled debt will be recognized as outstanding debt of RON on a debt obligation, for which the IL specified in paragraphs. 1, and (or) an interdependent person in relation to him, named in paragraphs. 2 of this paragraph, acts as a surety, guarantor or otherwise undertakes to ensure the fulfillment of this debt obligation of RON.
From the above rule there is an exception provided for in paragraph 9 of Art. 269 of the Tax Code of the Russian Federation. It specifies two conditions, under the simultaneous fulfillment of which the debt will not be regarded as controlled by the RON.
By virtue of paragraph 10 of Art. 269 of the Tax Code of the Russian Federation, an outstanding debt is not recognized as controlled if there is a written confirmation of the fulfillment of the conditions established by clauses 8 and 9, provided creditor under the RON debt obligation.
Other innovations
In addition to everything listed from next year in Art. 269 of the Tax Code of the Russian Federation, two norms will appear that are not in the current version. Firstly, this is paragraph 13, according to which the debt can be recognized as controlled by a court decision if it is proved that the ultimate goal of payments on such debt obligations are payments to organizations named in paragraphs. 1 and 2, paragraph 2 of Art. 269 of the Tax Code of the Russian Federation.
Secondly, this is paragraph 7, which states that the RON debt will not be recognized as controlled if the calculation and withholding of the amount of tax on the interest income of the IO paid on such a debt obligation is not performed by the tax agent in accordance with paragraphs. 8 p. 2 art. 310 of the Tax Code of the Russian Federation.
Let's summarize the above.
|
Cases when the outstanding debt of RON is considered to be controlled according to the rules of Art. 269 of the Tax Code of the Russian Federation |
|
|---|---|
|
…valid until 01/01/2017 |
… effective from 01/01/2017 |
|
For debt: – to an IO that directly or indirectly owns more than 20% of the authorized capital of RON |
For debt: - before the IL, which is an interdependent person * RON, if the IL directly or indirectly participates in the RON |
|
– before the RO, recognized as an affiliate of the above-mentioned IO |
- before a person recognized as an interdependent person ** of the above-mentioned IL |
|
- in respect of which the above persons act as a guarantor, guarantor |
|
* In accordance with paragraphs. 1, 2 or 9 paragraph 2 of Art. 105.1 of the Tax Code of the Russian Federation.
** In accordance with paragraphs. 1, 2, 3 or 9 paragraph 2 of Art. 105.1 of the Tax Code of the Russian Federation.
As can be seen from the table, starting from 2017, the circle of persons to whom the debt obligation held by RON will bear signs of controlled debt will expand significantly. Now we can talk about the emergence of controlled debt when debt obligations arise only to a foreign organization, according to the new rules, this will also apply to debt obligations to foreign persons, that is, not only to organizations, but also to individuals, which will significantly expand the scope of clause 2 Art. 269 of the Tax Code of the Russian Federation.
In the current wording, debt is recognized to a Russian organization that is an affiliate, which, as the Ministry of Finance explains (Letter No. 03-03-06/1/480 of 11.07. (or) individuals engaged in entrepreneurial activities. Agree, a rather vague definition.
Starting next year, it will be possible to speak about the emergence of controlled debt in cases where the creditor (both Russian and foreign) is related to a foreign person who directly or indirectly participates in the capital of RON and is related to him, then there is also a case when the creditor himself does not participate in the capital of RON.
Rules for calculating marginal interest on controlled debt
No cardinal changes have taken place here, only some provisions have been clarified, which in practice caused controversy.
The rules for calculating interest in the current edition are enshrined in paragraphs 2 - 4 of Art. 269 of the Tax Code of the Russian Federation, from 01/01/2017 they will be spelled out in paragraphs 3 - 6 of this article. They will still apply if the amount of controlled debt ( KZ) of the taxpayer by more than three times on the last day of the reporting (tax) period will exceed equity capital ( SC):
- if SC > SC x 3, the provisions of paragraphs 3 - 6 of Art. 269 of the Tax Code of the Russian Federation;
- if KZ< СК x 3 , the provisions of paragraph 1 of the designated article apply.
note
According to the new wording, when determining the size of the tax credit, the sum of the tax credit that arose for all the obligations of this taxpayer, named in paragraph 2 of Art. 269 of the Tax Code of the Russian Federation, in the aggregate.
The current version of this rule does not exist. The Ministry of Finance explained that the capitalization ratio is determined separately in relation to the outstanding debt to each legal entity in respect of which there is a controlled debt (letters dated 01/27/2015 No. /1/433).
According to paragraph 4 of Art. 269 of the Tax Code of the Russian Federation, the maximum amount of interest ( PP) for controlled debt to be included in expenses is calculated on the last day of each reporting (tax) period by dividing the amount of interest ( FP) accrued in each reporting (tax) period on controlled debt, by the capitalization ratio ( QC), calculated on the last reporting date of the relevant reporting (tax) period.
Capitalization ratio ( QC) is determined by dividing the amount of the corresponding outstanding controlled debt ( KZ) by the amount of equity capital ( SC), corresponding to the share of participation of an interdependent foreign entity specified in paragraphs. 1 p. 2 art. 269 of the Tax Code of the Russian Federation, in a Russian organization ( D), and dividing the result by 3 .
Let's imagine the formulas for calculating:
In accordance with paragraph 5, 6 of Art. 269 of the Tax Code of the Russian Federation, expenses include interest on KZ in an amount not exceeding the maximum amount of interest to be included in expenses, but not more than the interest actually accrued.
The positive difference between accrued and marginal interest is equated for tax purposes to dividends paid to a foreign person specified in paragraphs. 1 p. 2 art. 269 of the Tax Code of the Russian Federation, and is subject to:
- for an individual - personal income tax in accordance with par. 2 p. 3 art. 224 of the Tax Code of the Russian Federation at a rate of 15%;
- for an organization - income tax in accordance with paragraph 3 of Art. 284 of the Tax Code of the Russian Federation at a rate of 15%.
Example 4
The foreign company Grand Ltd indirectly owns 26% of the charter capital of Stroyservis LLC. Thus, these persons are recognized as interdependent.
On August 31, 2017, Grand Ltd provided Stroyservice LLC with a loan in the amount of RUB 365,000,000. for a period of one year with quarterly payment of interest at a rate of 10% per annum.
Reporting periods for Stroyservice LLC are a quarter, half a year, nine months.
The amount of equity capital of LLC during the year amounted to:
- as of September 30, 2017 - RUB 91,250,000;
- as of December 31, 2017 - 125,862,000 rubles.
The debt under the loan agreement is controlled.
Calculate the amount of actual interest for each quarter of 2017:
- for the III quarter - 3,000,000 rubles. (365,000,000 rubles x 10% / 365 days x 30 days);
- for the IV quarter - 9,200,000 rubles. (365,000,000 rubles x 10% / 365 days x 92 days).
Let us determine the ratio of the value of outstanding controlled debt to the value of the organization's own capital during the year. It will amount to:
- as of September 30, 2017 - 4 (365,000,000 rubles / 91,250,000 rubles);
- as of December 31, 2017 - 2.9 (RUB 365,000,000 / RUB 125,862,000).
As of September 30, 2017, controlled debt is more than three times the amount of equity. Thus, the amount of interest for the purposes of taxation of profits for the III quarter should be determined according to the rules of paragraphs 3 - 6 of Art. 269 of the Tax Code of the Russian Federation.
The capitalization ratio as of September 30, 2017 is 5.128 ((365,000,000 rubles / (91,250,000 rubles x 0.26)) / 3).
The maximum amount of interest taken into account in expenses for the III quarter is 585,023 rubles. (3,000,000 rubles / 5.128).
The difference in the amount of 2,414,977 rubles. (3,000,000 - 585,023) is recognized as dividends of a foreign organization. From this amount, a Russian organization must calculate and pay income tax to the budget at a rate of 15%.
As of December 31, 2017, the amount of controlled debt exceeds equity by less than three times. Thus, the amount of interest taken into account for the purposes of calculating income tax for the fourth quarter is determined according to the rules of paragraph 1 of Art. 269 of the Tax Code of the Russian Federation.
note
Since 2017, in paragraph 4 of Art. 269 of the Tax Code of the Russian Federation, a provision will be introduced according to which, in the event of a change in the CC in the next reporting period or at the end of the tax period compared to previous reporting periods, the PP for controlled debt for the previous reporting period is not subject to change.
There is no such provision in the current version, which at one time served as the reason for debates between tax authorities and taxpayers, until the Presidium of the Supreme Arbitration Court expressed its opinion (similar to the above-mentioned rule) in Resolution No. 3715/13 dated September 17, 2013. Starting next year, this provision will be enshrined in law.
Raizberg, B. A. Modern economic dictionary / B. A. Raizberg, L. Sh. Lozovsky, E. B. Starodubtseva. – M.: INFRA-M, 2006.
There will be some abbreviations in the text: RON - a Russian organization - that receives loans from foreigners or related parties and which must analyze whether these loans fall under the definition of controlled debt, RO - a Russian organization that acts as a lender, IO -, IFL - a foreign individual, RFL - a Russian individual.
From March 15, 2016, this article is valid in a new edition. Changes were made by Federal Law No. 32-FZ dated February 15, 2016.
Sent to lower tax authorities for use in their work by Letter of the Federal Tax Service of Russia dated 02.07.2013 No. ОА-4-13/11912.
A Russian organization is by default a tax resident of the Russian Federation in accordance with paragraphs. 2 p. 1 art. 246.1 of the Tax Code of the Russian Federation. An individual within the meaning of paragraph 2 of Art. 207 of the Tax Code of the Russian Federation is recognized as a tax resident subject to the actual stay in the Russian Federation for at least 183 calendar days during the year.
For banks and organizations engaged in leasing activities - more than 12.5 times. At the same time, it is specified which organization will be considered a leasing organization for the purposes of applying Art. 269 of the Tax Code of the Russian Federation.
For banks and leasing companies - by 12.5.
